- Permanence of project delays or cost over-run: (semi-)objective indications are needed to assess how far of a deviation is an irrecoverable damage. Attempting to recover a permanent delay or expenditure is meaningless or sometimes harmful.
- Causes of over-expenditure: Extent to which planning errors, price escalations, sub-optimal resource allocation, wastage of resources or idling of resources during delays contribute to cost over-run.
- Causes of delay: Extent to which planning errors, low productivity, insufficiency of resources and uncoordinated resources contribute to schedule delays
Heuristically, in addition to measures of variances in the project as a whole, additional measures of control are necessary to address control-related issues as contained above. Control is essentially an attempt to change the slope of earned value and actual cost curves at will, hence these measures need to be based on the slope or derivative of the PV,EV and AC curves at generic instants of time and generic stages of value of the project.
To elaborate, consider that a smeared PV region is created probabilistically based on optimism of planning. The region would also accommodate deterministic early start (ASAP) or late start (ALAP) PV curves. For different cash-flow conditions, smeared planned cost PC region may also be created with deterministic ASAP/ALAP planned cost curves. (PC curves may become probabilistic themselves, if resource costs are probabilistic). When earned values and actual costs are recorded in this system, it may also be possible to plot the costs as required to earn the value by ASAP/ALAP schedules – we may call this as earned cost EC region. (It is not emphasized that planned costs and earned cost would be identical to planned value and earned value respectively if Just-in-time inventory control is applied).
This approach can provide impressive conclusions, such as; slope of optimistic PV at generic value may be upper bound of expediting project by resource enhancement. Slope of ASAP/ALAP PC may indicate upper bound of cash flow requirements. In a well-controlled project during a delay, EV follows PV at least pessimistically, slope of EV tends towards optimistic PV and AC is comparable to EC.
Projection of cost over-run and delay also fares well when slopes are accommodated in the forecast, because deliberate control attempts to compensate delays by resource adjustments and cost increase by resource performance. As a result, during control the slope of EV curves change towards slopes of optimistic and early-start PV curves. Thus, affine translation of suitable PV curve and suitable affine rotation for recovery is a realistic transformation than simple affine scaling for forecasting. In this analysis, rotations are limited by the slope of optimistic PV curves, so that any delays that cannot be rectified by following optimistic PV curves remain irrecoverable. Delays that are within the difference between ASAP and ALAP may be recovered without cost-over-run.
For a given EV curve and corresponding EC curve, deviation of actual cost from absolute maximum earned cost may represent an irrecoverable expenditure. Deviations between ASAP and ALAP earned costs may be recoverable by better control.
[All foregoing discussions are strictly only mathematical hypothesis and do not amount to inference. Actual behaviour of earned value curves in reality are subject to multitude of parameters. Inference is sought to be developed after actual implementation of earned values on different projects.]
Testing of aforesaid methods, leave alone their practical application, is formidable due to the extensive data capturing and mathematical computations involved. A suitable methodology needs to be devised for this purpose in order to derive fruitful results. Notwithstanding this difficulty, it stands that the slopes in EVM are as significant as the values and indices both from control perspective and forecast analysis, where recovery curves are used at generic instances.
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