Cost Control Development under Stochastic Performance Control
International Journal of Economics, Finance and Management Sciences
Volume 1, Issue 1, February 2013, Pages: 54-60
Received: Feb. 1, 2013; Published: Feb. 20, 2013
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Authors
Milad Eghtedari Naeini, Civil Engineering Department, Pardis, Iran
Milad Eghtedari Naeini, Pardis Islamic Azad University, Pardis, Iran
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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.
Keywords
Monte Carlo Method, Probabilistic Model, Project Forecasting, Stochastic S-Curve, Project Monitoring
To cite this article
Milad Eghtedari Naeini, Milad Eghtedari Naeini, Cost Control Development under Stochastic Performance Control, International Journal of Economics, Finance and Management Sciences. Vol. 1, No. 1, 2013, pp. 54-60. doi: 10.11648/j.ijefm.20130101.17
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