Forecasting Cost at Completion

Three useful views

• Statistical forecast: projects current performance using a formula.
• Bottom-up estimate to complete: re-estimates remaining work package by work package.
• Risk-adjusted forecast: includes remaining uncertainty and discrete threats or opportunities.

Common formulas

No formula is universally correct. If past overruns were caused by a one-time event, simply extending the historical CPI may be pessimistic. If unresolved productivity or design problems remain, a management forecast based on the original plan may be optimistic.

Reconcile the forecast

Explain movement from the prior forecast: actual variance, approved scope, rate changes, schedule changes, new risks, retired risks and estimate refinements. This makes the forecast auditable and useful.