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Chapter-06
PROJECT CONTROL
Outline Syllabus
Fundamental purpose of control - Types of Control Processes -Control as
Function of Management - Balance in a Control System.
Chapter Synopsis
S.No. Contents S.No. Contents
6.01 PROJECT CONTROL 6.02 FUNDAMENTAL OBJECTIVES OF CONTROL
6.03 TYPES OF CONTROL SYSTEM 6.04 VARIANCE ANALYSIS APPROACH
6.05 PROBLEMS 6.06 EXERCISE
1. Cybernetic Control: This is the most common kind of control mechanism. A project has
inputs and outputs. The outputs can be in the form of milestones that have to be met. Cybernetic
controls focus on the outputs. If these milestones or outputs do not measure up to the set
standards, then the situation is investigated to see if there is a sufficient cause to change patterns
of activity.
2. Go/No-go Control: Go/no-go control takes the form of testing to make sure that certain
preconditions are met before a task is undertaken. This type of control can be used for a specific
part of the project too. Go/no-go controls are linked to the actual plans and are not independently
set on a calendar.
1. Budget vs. Actual Costs: Variance analysis is important to assist with managing budgets by
controlling budgeted versus actual costs. In program and project management, for example,
financial data are generally assessed at key intervals or milestones. For instance, a monthly
closing report might provide quantitative data about expenses, revenue and remaining
inventory levels. Variances between planned and actual costs might lead to adjusting business
goals, objectives or strategies.
6.08 PROBLEMS
BBA (Professional) 2009,2013 MODIFIED
Problem 1. A project has begun on 1st January, 2009 and was expected to be completed by 31st
December, 2009.The project is being reviewed on 30th September, 2009 when the following
information has been developed:-
Taka
Budgeted cost for work scheduled (BCWS): 6,00,000
Budgeted cost for work performed (BCWP): 5,50,000
Actual cost of work performed (ACWP): 5,80,000
Budgeted cost for total work (BCTW): 10,00,000
Additional cost for completion (ACC): 5,00,000
Determine the following:
(i) Cost variance;
(ii) Schedule variance in cost terms;
(iii) Cost performance index;
(iv)Schedule performance index;
(v) Estimated cost performance index.
Solution:
(i) Cost variance = BCWP - ACWP
= Tk. 5,50,000- Tk.5,80,000
= Tk. - 30,000
=
=0.9482
=
= 0.9166
106 Project Management
=
=0.9259
Solution:
(i) Cost variance = BCWP - ACWP
= Tk. 1,400,000 - Tk. 1,600,000
= Tk. - 200,000
=
= 0.875
Chapter 6: Project Control 107
=
= 0.933
=
=0.893