Cost Control Development under Stochastic Performance Control

Milad Eghtedari Naeini; Milad Eghtedari Naeini

doi:doi:10.11648/j.ijefm.20130101.17

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Cost Control Development under Stochastic Performance Control

Milad Eghtedari Naeini, Milad Eghtedari Naeini

Published in International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 1)

Published: 20 February 2013

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Abstract

In this research, a model to forecast project’s cost will be presented with due attention to performance time and cost of the project, based on Earned Value Management (EVM) and with regarding real circumstances caused by uncertainties, risk factors and using simulation methods. All the uncertainties will be related to cost of work packages as well as its changes over time by probability distribution functions. Probabilistic distribution functions will be determined based on existing information obtained from previous projects and experts’ opinion. In this model, project’s activities will be classified to subgroups calling control accounts. Each of them has a controlling limit to control project’s performance. Then, using simulation methods, stochastic s-curve for each control account will be determined to clarify project stochastic s-curve from total of these s-curves. When a percentage of the project has been performed, using modern methods of Earned Value Management, the performance of the project will be measured, therefore, it will be possible to adjust probability distribution functions and forecast the future performance of the project using simulation model of Monte Carlo.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 1)
DOI	10.11648/j.ijefm.20130101.17
Page(s)	54-60
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

Monte Carlo Method, Probabilistic Model, Project Forecasting, Stochastic S-Curve, Project Monitoring

References

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APA Style

Milad Eghtedari Naeini, Milad Eghtedari Naeini. (2013). Cost Control Development under Stochastic Performance Control. International Journal of Economics, Finance and Management Sciences, 1(1), 54-60. https://doi.org/10.11648/j.ijefm.20130101.17

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ACS Style

Milad Eghtedari Naeini; Milad Eghtedari Naeini. Cost Control Development under Stochastic Performance Control. Int. J. Econ. Finance Manag. Sci. 2013, 1(1), 54-60. doi: 10.11648/j.ijefm.20130101.17

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AMA Style

Milad Eghtedari Naeini, Milad Eghtedari Naeini. Cost Control Development under Stochastic Performance Control. Int J Econ Finance Manag Sci. 2013;1(1):54-60. doi: 10.11648/j.ijefm.20130101.17

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@article{10.11648/j.ijefm.20130101.17,
  author = {Milad Eghtedari Naeini and Milad Eghtedari Naeini},
  title = {Cost Control Development under Stochastic Performance Control},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {1},
  pages = {54-60},
  doi = {10.11648/j.ijefm.20130101.17},
  url = {https://doi.org/10.11648/j.ijefm.20130101.17},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130101.17},
  abstract = {In this research, a model to forecast project’s cost will be presented with due attention to performance time and cost of the project, based on Earned Value Management (EVM) and with regarding real circumstances caused by uncertainties, risk factors and using simulation methods. All the uncertainties will be related to cost of work packages as well as its changes over time by probability distribution functions. Probabilistic distribution functions will be determined based on existing information obtained from previous projects and experts’ opinion. In this model, project’s activities will be classified to subgroups calling control accounts. Each of them has a controlling limit to control project’s performance. Then, using simulation methods, stochastic s-curve for each control account will be determined to clarify project stochastic s-curve from total of these s-curves. When a percentage of the project has been performed, using modern methods of Earned Value Management, the performance of the project will be measured, therefore, it will be possible to adjust probability distribution functions and forecast the future performance of the project using simulation model of Monte Carlo.},
 year = {2013}
}

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TY  - JOUR
T1  - Cost Control Development under Stochastic Performance Control
AU  - Milad Eghtedari Naeini
AU  - Milad Eghtedari Naeini
Y1  - 2013/02/20
PY  - 2013
N1  - https://doi.org/10.11648/j.ijefm.20130101.17
DO  - 10.11648/j.ijefm.20130101.17
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 54
EP  - 60
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20130101.17
AB  - In this research, a model to forecast project’s cost will be presented with due attention to performance time and cost of the project, based on Earned Value Management (EVM) and with regarding real circumstances caused by uncertainties, risk factors and using simulation methods. All the uncertainties will be related to cost of work packages as well as its changes over time by probability distribution functions. Probabilistic distribution functions will be determined based on existing information obtained from previous projects and experts’ opinion. In this model, project’s activities will be classified to subgroups calling control accounts. Each of them has a controlling limit to control project’s performance. Then, using simulation methods, stochastic s-curve for each control account will be determined to clarify project stochastic s-curve from total of these s-curves. When a percentage of the project has been performed, using modern methods of Earned Value Management, the performance of the project will be measured, therefore, it will be possible to adjust probability distribution functions and forecast the future performance of the project using simulation model of Monte Carlo.
VL  - 1
IS  - 1
ER  -

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Author Information

Milad Eghtedari Naeini

Civil Engineering Department, Pardis, Iran
Milad Eghtedari Naeini

Civil Engineering Department, Pardis, Iran

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Plain Text BibTeX RIS

APA Style

Milad Eghtedari Naeini, Milad Eghtedari Naeini. (2013). Cost Control Development under Stochastic Performance Control. International Journal of Economics, Finance and Management Sciences, 1(1), 54-60. https://doi.org/10.11648/j.ijefm.20130101.17

Copy | Download

ACS Style

Milad Eghtedari Naeini; Milad Eghtedari Naeini. Cost Control Development under Stochastic Performance Control. Int. J. Econ. Finance Manag. Sci. 2013, 1(1), 54-60. doi: 10.11648/j.ijefm.20130101.17

Copy | Download

AMA Style

Milad Eghtedari Naeini, Milad Eghtedari Naeini. Cost Control Development under Stochastic Performance Control. Int J Econ Finance Manag Sci. 2013;1(1):54-60. doi: 10.11648/j.ijefm.20130101.17

Copy | Download

@article{10.11648/j.ijefm.20130101.17,
  author = {Milad Eghtedari Naeini and Milad Eghtedari Naeini},
  title = {Cost Control Development under Stochastic Performance Control},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {1},
  pages = {54-60},
  doi = {10.11648/j.ijefm.20130101.17},
  url = {https://doi.org/10.11648/j.ijefm.20130101.17},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130101.17},
  abstract = {In this research, a model to forecast project’s cost will be presented with due attention to performance time and cost of the project, based on Earned Value Management (EVM) and with regarding real circumstances caused by uncertainties, risk factors and using simulation methods. All the uncertainties will be related to cost of work packages as well as its changes over time by probability distribution functions. Probabilistic distribution functions will be determined based on existing information obtained from previous projects and experts’ opinion. In this model, project’s activities will be classified to subgroups calling control accounts. Each of them has a controlling limit to control project’s performance. Then, using simulation methods, stochastic s-curve for each control account will be determined to clarify project stochastic s-curve from total of these s-curves. When a percentage of the project has been performed, using modern methods of Earned Value Management, the performance of the project will be measured, therefore, it will be possible to adjust probability distribution functions and forecast the future performance of the project using simulation model of Monte Carlo.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Cost Control Development under Stochastic Performance Control
AU  - Milad Eghtedari Naeini
AU  - Milad Eghtedari Naeini
Y1  - 2013/02/20
PY  - 2013
N1  - https://doi.org/10.11648/j.ijefm.20130101.17
DO  - 10.11648/j.ijefm.20130101.17
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 54
EP  - 60
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20130101.17
AB  - In this research, a model to forecast project’s cost will be presented with due attention to performance time and cost of the project, based on Earned Value Management (EVM) and with regarding real circumstances caused by uncertainties, risk factors and using simulation methods. All the uncertainties will be related to cost of work packages as well as its changes over time by probability distribution functions. Probabilistic distribution functions will be determined based on existing information obtained from previous projects and experts’ opinion. In this model, project’s activities will be classified to subgroups calling control accounts. Each of them has a controlling limit to control project’s performance. Then, using simulation methods, stochastic s-curve for each control account will be determined to clarify project stochastic s-curve from total of these s-curves. When a percentage of the project has been performed, using modern methods of Earned Value Management, the performance of the project will be measured, therefore, it will be possible to adjust probability distribution functions and forecast the future performance of the project using simulation model of Monte Carlo.
VL  - 1
IS  - 1
ER  -

Copy | Download