A multivariate approach for top-down project control using earned value management

a r t i c l e i n f o Project monitoring and the related decision to proceed to corrective action are crucial components of an integrated project management and control decision support system (DSS). Earned value management/earned schedule (EVM/ES) is a project control methodology that is typically applied for top-down project schedule control. However , traditional models do not correctly account for the multivariate nature of the EVM/ES measurement system. We therefore propose a multivariate model for EVM/ES, which implements a principal component analysis (PCA) on a simulated schedule control reference. During project progress, the real EVM/ES observations can then be projected onto these principal components. This allows for two new multivariate schedule control metrics (T 2 and SPE) to be calculated, which can be dynamically monitored on project control charts. Using a computational experiment, we show that these multivariate schedule control metrics lead to performance improvements and practical advantages in comparison with traditional univariate EVM/ES models. Project management (PM) is a subdomain of Operations Research that gained quick momentum with the inception of project planning approaches such as the critical path method (CPM [1]) and the program evaluation and research technique (PERT [2]). These methods aim to construct a baseline schedule in the absence of resource restrictions. Explicit incorporation of resources constituted a logical next step and led to an explosion of solution techniques, problem formulations and extensions. An overview of the resource-constrained project scheduling problem and its many extensions can be found in the standard texts of [3, 4] and [5]. While a realistic baseline plan is of great importance, every project proceeds to the execution phase, disrupting the baseline schedule. Hence, the baseline schedule mainly serves as a reference point throughout project control. Due to the inherent presence of schedule disruptions, controlling the project's performance using techniques such as earned value management (EVM) is key to a project's success. EVM is a project control methodology that originated in the 1960s at the US Department of Defense. EVM aggregates the progress of individual activities to a higher level of the work breakdown structure (WBS) and provides the project manager with an indication of the overall health of the project. Because of the aggregation of information at a low level to a higher level of the WBS structure, EVM is known as a top-down control method ([6]). Three key metrics, namely planned value (PV), earned value (EV) …