- 2068 Baisakh (old course) · 8 marks
Monitoring vs controlling; EVA concept
Short answer
Monitoring measures and reports actual progress; controlling analyses variances and acts. Earned Value Analysis uses Planned Value (PV), Earned Value (EV), and Actual Cost (AC) to compute schedule variance (SV = EV−PV) and cost variance (CV = EV−AC). SPI = EV/PV, CPI = EV/AC; SPI/CPI below 1 indicate delay or overrun, enabling corrective action.
Differentiate monitoring and controlling by explaining the project control cycle. Explain the concept of Earned Value Analysis used for controlling cost.
Monitoring and controlling
| Basis | Monitoring | Controlling |
|---|---|---|
| Nature | Observing, measuring and reporting progress | Acting on the findings to bring the project back to plan |
| Question | What is happening? | What should be done about it? |
| Output | Progress and variance reports | Corrective action, revised plan |
| Stage in cycle | Measure and compare | Analyse, decide and act |
| Authority | Information gathering, any level | Decision of project manager/management |
Project control cycle
+--------------+ +------------------+
| 1 Plan: | | 2 Implement and |
| baseline of |---->| measure actual |
| time, cost, | | progress |
| quality | +--------+---------+
+------^-------+ |
| v
+------+-------+ +------------------+
| 5 Take | | 3 Compare actual |
| corrective |<----| with plan and |
| action / | | find variance |
| re-plan | +--------+---------+
+------^-------+ |
| v
| +------------------+
+-------------| 4 Analyse causes |
| and decide |
+------------------+
Monitoring covers steps 2 and 3 (measure and compare); controlling covers steps 4 and 5 (analyse and act), and the cycle is repeated at every review.
Earned Value Analysis (EVA) for cost control
EVA compares the planned value (PV), the earned value (EV) and the actual cost (AC) at a status date, so that cost and schedule performance are seen in one common unit (money).
| Term | Other name | Meaning |
|---|---|---|
| BAC | Budget at completion | Total approved budget of the project |
| PV | BCWS (planned value) | Budgeted cost of the work scheduled up to the date |
| EV | BCWP (earned value) | Budgeted cost of the work actually completed = % complete x BAC |
| AC | ACWP (actual cost) | Actual money spent for the work done up to the date |
| Indicator | Value | Meaning |
|---|---|---|
| SV, SPI | SV > 0, SPI > 1 | Ahead of schedule |
| SV = 0, SPI = 1 | On schedule | |
| SV < 0, SPI < 1 | Behind schedule | |
| CV, CPI | CV > 0, CPI > 1 | Under budget (cost efficient) |
| CV = 0, CPI = 1 | On budget | |
| CV < 0, CPI < 1 | Over budget (cost inefficient) |
Example: BAC = Rs 10 lakh; at the status date PV = Rs 5 lakh, EV = Rs 4 lakh, AC = Rs 6 lakh. lakh, lakh, , , lakh. The project is behind schedule and over budget, so corrective action is needed at once.
✓ Answer checked by Claude Opus 5.5 (high effort)
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