The model has been tested in an oil and gas project.
KEYWORDS: project control; earned value management; estimate at completion; Bayesian approach Project management is the application of tools, techniques, processes, and knowledge skills in order to manage and control a unique, temporary, and multidisciplinary task (Kliem & Ludin, 1998).
Moreover, in case 3, both CPI and SPI(t) represent a cumulative value covering all the WC from the project outset to time now.
In fact, relying only on past performance while developing a forecast could be misleading, because considering only past values of CPI and SPI(t) is similar to driving a car while looking just in the rearview mirror, thus making it impossible to dodge the obstacles that may lie on the route.
This fact opened the door to establish a confidence interval for the estimate at completion (Lipke, 2006b).
According to an EVM framework, past performance can be used as a predictor of future performance (PMI, 2011).
In the following, the generic indices CPI and SPI(t) will be referred to the overall WC, while CPI will be referred to the overall WR.
The process of calculating an estimate at completion is usually based on a deterministic approach that is suited to projects with a low uncertainty level (Fleming, 1992).
Estimates at completion in terms of cost and schedule provide essential data and advice to the project team in order to lead and control the project and implement suitable corrective measures.
The above three curves and the ES value (see Figure 2) allow for the calculation of a set of indices and variances at the TN.
The most important indices and variances are as follows: = CPI * SPI(t) In Table 1, these indices and variances are summarized together with their corresponding meaning.
An important process that requires the project team to plan and control the complexity of the activities involved in the project is the calculation of estimates at completion, both in terms of cost (EAC) and time (EAC(t)).
In fact, project management requires a forward control mechanism to manage the high level of uncertainty and innovation that can affect a project, and in this context estimates at completion represent a prerequisite for identifying and implementing suitable corrective measures in a timely manner.
Project management can be seen as a process that starts from the definition of project scope and objectives and ends with the fulfillment of project requirements.