Project Performance Evaluation by Earned Value Analysis

figure Performance Evaluation by get nurse analytic thinkingProject Performance Evaluation by realize apprize Analysis A Case StudyAbstract- pull in honour instruction (EVM) is a well- spangn pop the question wariness cats-paw that uses learning on speak to, inscription and choke execution to track the current cons reliableation of the regurgitate. It uses information on greet, agenda and work movement to establish the current status of the visualize. The calculation of take in comfort is a very effective tool in measuring the progress of contractors in external labor movements. Computation of realise treasure freighterful be part of an audit activity, or it can be integrated into the progress supervise system. The judgment of earned value is generally employ in the context of fixed price contracts where the documental is to calculate the amount of payment that is due to the contractor.Keywords- Project Performance Evaluation, Earned Value, apostro phize Control, forebodeINTRODUCTIONEarned value summary is a contrive crack technique which provides constitute and schedule surgical procedure measurements of the realize. It is a frequently utilize method of execution of instrument measurement for visualizes. It integrates the chore grasp baseline and the court baseline, along with the schedule baseline, to form the death penalty baseline, which helps the project management team assess and measure project exertion and progress. EVM provides project managers and the organization with triggers or early warning signals that allow them to take by the bye actions in response to indicators of poor performance and enhance the opportunities for project mastery. emend planning and resource allocation associated with the early periods of a project qualification be the cause of this reliability.EVM IN CONSTRUCTION PROJECTSEVM can be used for progress payments to contractors based on the earned value (EV) of undertake or o utsourced work. Since such contr real arrangements create legal and financial obligations, it is important to consider the method specified for evaluating progress. These methods and tools for the determination of progress should be carefully considered and negotiated to touch a fair and equitable environment that encourages successful accomplishment of contracted or outsourced project items.Once a project has advanced to a stage of performance, the consistent and constant flow of information on the true status of the project is essential. EVM is a methodology that associates project scope, schedule, and resource measurements to read project performance and progress. The fundamental principle of EVM is that the patterns and trends of performance, when compared against a soundly demonstrable baseline, can be excellent predictors of the future project performance. Feedback is censorious to the success of any project. Getting the relevant feedback in cartridge clip enables project managers to recognize problems early and make adjustments that keeps a project on prison term and on budget. EVM is considered by many to be one of the most effective performance measurement and feedback tools for managing construction projects.In EVM system, the three parameters that influence the project performance control arePlanned Value (PV)Planned value (PV) is the authorise budget assigned to a scheduled work. It may also be known as the Budgeted Cost for Work Scheduled (BCWS). This budget is allocated by phases everyplace the life of the project, but at a cut inton moment, be after value outlines the physical work that should slang been accomplished. The overall PV is sometimes referred to as the performance measurement baseline (PMB). The innate intend value for the project is also known as budget at accomplishment (BAC) 1.Earned Value (EV)Earned value (EV) is the measure of work performed at a specific point in time, expressed in terms of the legitimate budget for that work. The EV being measured needs to be link to the PMB, and it cannot be great than the authorized PV budget for a broker. The EV is oft used to calculate the region completion of a project. Progress rating criteria should be established for each work breakdown structure (WBS) component to measure work in progress. The earned value methodology used to plan the baseline should be used consistently to determine the earned value. Project managers oversee EV, both incrementally to determine current status and cumulatively to determine the long-term performance trends 2, 1.Actual Cost (AC)Actual exist (AC) is the realized cost incurred for the work performed during a specific time period. It is the join cost incurred in achieving the work that the EV measured. In order for EVM analysis to be reliable, AC must be recorded in the alike(p) time period as EV and for the same activity or work breakdown structure component as EV. Fig. 1 shows the actual cost at time now, an d expresss that the organization has spent more than than it plotted to spend in order to achieve the work performed to date.Fig. 1 Earned Value curve for a project over budget and stub scheduleLITERATURE REVIEWPrevious researches done on the EVM indicate that it is definitely one of the better practice to monitor a project. thus in this project we forget be considering Earned Value Analysis for research purpose.Pramod M et al. (2014), recognise that the absence of an effective system for supervise and controlling project cost is the main reason for cost escalation and delays in the project. Their study considers Earned Value analysis and Earned Schedule concept as the two monitoring systems which can be used to monitor a construction project. The study was done on a residential apartment in Bangalore. They concluded their research by saying, Earned Value Analysis is a great monitoring system for project cost control when the required information are cost oriented 3.Jose Angel o Valle and Carlos Alberto Pereira Soares (2012), did a critical review of the application of EVA for the Amusement Park named Monica Park in Brazil, which was is documented with reports, graphs, analyses and comments. EVA had a relevant role in the integrated management of the project scope, time, progress, cost and risks and the procurement. Because of the implementation of EVA, the project finished on time and on budget. The findings of the case study are analysed and concluded with 10 recommended locomote for future implementation of the EVA process 4.Antony Prasanth M A and K Thirumalai rajah (2014), selected Integrated ho victimisation and slum development program (IHSDP) located in Mattampuram, Thrissur, Kerala, for case study. Budgeted cost of work performed was compared against actual cost of work performed and budgeted cost of work scheduled to assess cost and schedule sectionalizations, respectively. Based on the collected data, schedule of the project and cost for ind ividual activities had prepared. It gave an idea of cost and time required for individual activities and for the entire construction. S-Curve was drawn showing the consanguinity in the midst of duration and cost of the project. From the calculation of various project performance indicators, they arrived at conclusion that the project has an unfavourable schedule variance of 9.5 which meant the project was behind schedule. A SPI of .62 and a CPI of 0.82 was obtained. EAC of 411.20 lakhs was obtained which is 74.02 lakhs more than the BAC at 337.18 lakhs 5.EVM operation ANALYSIS AND FORECASTING PARAMETERCalculating Project PerformanceEVA analyses project performance by calculating performance variances and performance indices. Common variances embroilSchedule Variance (SV)Schedule variance (SV) is the amount by which the project is forrad or behind the mean delivery date, at a given point in time. It is a measure of schedule performance on a project. It is represent to the earn ed value (EV) minus the planned value (PV). The EVM schedule variance is a useful metric which can indicate when a project is falling behind or is ahead of its baseline schedule. The EVM schedule variance will ultimately equal zero point when the project is contendd because all of the planned values will have been earned.Cost variance (CV)Cost variance (CV) is the amount of budget dearth or extra at a given point in time. It is a measure of cost performance on a project. It is equal to the earned value (EV) minus the actual cost (AC). The cost variance at the end of the project will be the difference between the budget at completion (BAC) and the actual amount spent.Schedule performance index (SPI)The schedule performance index (SPI) is a measure of schedule efficiency expressed as the ratio of earned value to planned value. SPI indicates the rate at which the project is progressing. It is sometimes used in corporation with the cost performance index (CPI) to forecast the final project completion estimates. An SPI value less than 1.0 indicates less work was completed than was planned. An SPI greater than 1.0 indicates that more work was completed than was planned.Cost performance index (CPI)The cost performance index (CPI) is a measure of the cost efficiency of budgeted resources, expressed as a ratio of earned value to actual cost. It is considered the most critical EVM metric and measures the cost efficiency for the work completed. A CPI value of less than 1.0 indicates a cost overrun for work completed and greater than 1.0 indicates a cost underrun of performance to date.Performance ForecastingAs the project progresses, forecasts can be developed for cost and schedule performance. Common divination data includes bringing close together to plump out (ETC)The estimate to complete (ETC) is the expected cost needed to complete all of the be work for a control account, work package, or the project. The most accurate method is to develop a new, detailed, bottom-up estimate based on an analysis of the remaining work.Estimate at Completion (EAC)Estimate at completion (EAC), is the expected total cost of a control account, work package, or the project when the define scope of work will be completed. The EAC is typically based on the actual cost incurred for work completed (AC), plus an estimate to complete (ETC) for the remaining work.Variance at Completion (VAC)The cost variance at completion (VAC), derived by subtracting the EAC from the BAC, forecasts the amount of budget deficit or surplus at the end of the project. The VAC shows the team whether the project is forecasted to finish under or over budget. This can be expressed as a percentage by dividing VAC by BAC.To complete performance index (TCPI)The TCPI is a relative measure. It compares work completed to date with budget required to complete the remaining work. The TCPI data can be used as the basis for a discussion which explores whether the performance required is realisti cally achievable. It is the ratio of remaining work to the remaining budget.TABLE IEVM AS IT RELATES TO PROJECT MANAGEMENT SITUATIONSProject direction QuestionsEVM Performance MeasuresFormulaSchedule Analysis Forecasting To know the status of project Time-Wise.Are we ahead or behind schedule?Schedule Variance (SV)SV = EV/PVHow efficiency are we using time?Schedule Performance Index (SPI)SPI = EV/PVCost Analysis Forecasting To know the status of project Cost-Wise.Are we under or over our budget?Cost Variance (CV)CV = EV-ACHow efficiently are we using our resources?Cost Performance Index (CPI)CPI = EV/ACHow efficiently must we use our remaining resources?To-Complete Performance Index (TCPI)TCPI = (BAC EV)/(BAC AC )What is the project likely to cost? Estimate at Completion (EAC)EAC = BAC/CPI lead we be under or over budget?Variance at Completion (VAC)VAC = BAC-EACWhat will the remaining work cost?Estimate to Complete (EAC)ETC = (BAC-EV)/CPICONCLUSIONSThe study of various research works and case studies give an idea that Earned Value Analysis is a great monitoring system for project cost control. Therefore, in this paper I will be making an attempt to apply and analyse the use of EVM on a live project based on the findings and guidelines of the references.REFERENCES1 PMI, A scarper to the Project forethought Body of Knowledge (PMBOK), 4th Edition, Project Management Institute, USA, 2008.2 PMI, Practice Standard for Earned Value Management, 2nd Edition, Project Management Institute, USA, 2005.3 Pramod M, K. Phaniraj and V. Srinivasan, Monitoring System for Project Cost Control in structure Industry, in International Journal of design Research engineering (IJERT), Vol. 3, Issue 7, pp. 1487-1491, July 2014.4 Jose Angelo Valle and Carlos Alberto Pereira Soares, The Use of Earned Value Analysis (EVA) in the Cost Management of Construction Projects, International Journal of Engineering and Innovative Technology, pp1-11, cross 2011.5 Antony Prasanth M A and K Thirumalai Raja, Project Performance Evaluation by Earned Value Method, International Conference on Engineering Technology and Science, Volume 3, Special Issue 1, Feb. 2014.