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The impact of a limited budget on the corrective action taking process
Song, Jie Martens, Annelies Vanhoucke, Mario
Song, Jie
Martens, Annelies
Vanhoucke, Mario
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2020
Journal
European Journal of Operational Research
Book
Publication Volume
286
Publication Issue
3
Publication Begin page
1070
Publication End page
1086
Publication NUmber of pages
Collections
Abstract
The main goal of project control is to identify the deviations between the baseline schedule and the actual progress of the project by measuring the project performance in progress and using the project control methodologies to generate warning signals that act as triggers for corrective actions to bring the project back on track. To that purpose, tolerance limits are set on the required project performance, such that if the warning signals exceed these limits, they should result in appropriate corrective actions. In this paper, the Earned Value Management (EVM) control method and its extensions are used to test their abilities in taking corrective actions under a budget constraint. More precisely, four different approaches are proposed for allocating the limited budget along the different project phases, and whether a proper allocation of the budget results in an increase of the expected project outcome is measured. A large computational experiment is conducted on a set of artificial projects to assess the efficiency and effectiveness of the budget allocation models. Results show that simply allocating budget according to the time accrue of projects performs better than methods that take cost, time/cost or risk information into account. Moreover, results indicate that allocating a budget that increases in later stages of the project is beneficial for the outcome.
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Keywords
Project Management, Project Control, Earned Value Management, Budget Allocation, Simulation