The projected total cost of a project upon its completion is a critical metric in project management. This figure, often derived through Earned Value Management techniques, provides a benchmark against which actual expenditures can be compared. A common calculation involves dividing the Budgeted Cost of Work Scheduled (BCWS) by the Cost Performance Index (CPI). For example, if the originally planned cost for a project was $100,000, and the CPI is 0.8, the projected total cost would be $125,000, indicating a potential overrun.
Understanding the anticipated final cost enables stakeholders to proactively manage resources, mitigate risks, and make informed decisions regarding project continuation or modification. This foresight prevents unexpected financial burdens and contributes to more accurate financial forecasting. Its significance stems from providing early warnings about potential cost overruns, enabling timely corrective actions. While sophisticated project management software aids in its calculation, the underlying concept has been employed in various forms throughout modern business and engineering projects.