Abstract
In spite of the abilities of earned value management technique (EVM) in evaluating the projects’ cost and time performance, it is not able to estimate the projects’ future performance. In fact, the earned value management estimates the project future performance merely based on its past and does not consider the environmental circumstances change or other elements which effect on the future performance of the project. Unlike the earned value management, the risk management technique looks to the farther horizons and deals with the evaluation of the project performance by recognizing the opportunities and threats. In this paper we intend to present the risk ratio in combination with the earned value management current indices for better forecasting of the projects’ future performance using the risk management technique. These ratios and indices are determined under real-life and uncertain conditions using the fuzzy approach.
Highlights
The earned value management is a project management technique used to measure the projects’ schedule and cost performance within a single integrated methodology (PMI, 2005)
The earned value management estimates the project future performance merely based on its past and does not consider the environmental circumstances change or other elements which effect on the future performance of the project
The earned value management in calculating the schedule and cost performance indices assumes that the future performance of the project is a function of its past performance
Summary
The earned value management is a project management technique used to measure the projects’ schedule and cost performance within a single integrated methodology (PMI, 2005). This technique assists managers in estimating the final cost and time of the projects. Today a decrease in cost and time is important to all the managers. They should possess a tool and a model for valid forecasts. In this technique the most important elements of a project, i.e. time, cost and scope, must be under control of the project manager. There is a necessity of noticeable improvements for desired development of earned value management
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