After a risk review meeting, three key risks are identified as likely to be realized. The project manager requests a risk scenario be calculated to establish the impact on the budget. What is the…

The correct answer is A. Estimate to complete (ETC). When risks are identified as likely to be realized, the project team needs to forecast how much it will cost to complete the remaining work given the new risk realization. Estimate to Complete (ETC) is the expected cost to finish all remaining project work from the current…

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Question

After a risk review meeting, three key risks are identified as likely to be realized. The project manager requests a risk scenario be calculated to establish the impact on the budget. What is the forecasting methodology that should be utilized to calculate the impact?

Options

AEstimate to complete (ETC)
BBudget at completion (BAC)
CEstimate risk completion (ERC)
DEstimate at completion (EAC)

How the community answered

(18 responses)

A
78% (14)
B
6% (1)
C
6% (1)
D
11% (2)

Explanation

When risks are identified as likely to be realized, the project team needs to forecast how much it will cost to complete the remaining work given the new risk realization. Estimate to Complete (ETC) is the expected cost to finish all remaining project work from the current point forward, and it is the appropriate tool for this forward-looking budget impact calculation. It answers: 'Given what we know now (including these risks), how much more will this project cost?' Estimate at Completion (EAC, choice D) includes actuals already spent plus ETC - it gives total project cost, not just remaining impact. BAC (B) is the original approved budget baseline. ERC (C) is not a standard PMI methodology.

Topics

#Risk cost impact#Cost forecasting#Estimate to complete (ETC)#Quantitative risk analysis

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