What is meant by Estimate at Completion (EAC)?

Estimate at Completion (EAC) refers to the forecasted total cost that is expected to be incurred to complete a project. It is a crucial metric in project management, particularly in the field of engineering and construction, as it helps project managers assess the overall financial health and performance of a project as it progresses.

EAC takes into account the actual costs incurred to date and the remaining work that needs to be completed, providing a comprehensive estimate of the total expenditure required to finish the project. This estimation is essential for keeping the project on budget and for making informed decisions about resource allocation, risk management, and potential changes in project scope.

Understanding EAC allows project managers to identify variances between actual performance and planned performance, which can prompt necessary adjustments to project plans and budgets. By focusing on effectively estimating the total cost to complete a project, EAC plays a vital role in enhancing transparency and accountability throughout the project lifecycle.