A Study Of Cost Control In Construction Project Based On Function-cost Analysis Earned Value Management

With the deepening of economic system reform and the intension of market competition, the key for construction corporations to survive and develop lies in whether the corporations can provide building products with high quality, short building period and low cost. How to take effective measures to control the cost of construction projects becomes the great concerned issue for every construction enterprises.Construction project costs related to all aspects, using one cost control method alone can't control it effectively, we should use various methods of cost control together in order to strengthen control. Among all the methods of cost control, the advantages of Earned Value Management lies in that it can monitor project status and find item deviation, but in evaluating effects of various control measures so as to determine correct measures, it is slightly less than the other methods. Although Value Engineer can't monitor project, it can make up the deficiency of Earned Value Management in evaluating effects. This paper will study how to merge the function-cost analysis thinking of Value Engineering into the process of using Earned Value Management so as to control construction project cost, it has some theoretical value and practical significance.This paper follow the order of project management process, combine qualitative and quantitative methods, embed value index method into Earned Value Management to make function-cost analysis, then make up the shortages of traditional Earned Value Management method. It means that, use value index method to optimize construction scheme during project preparatory stage, in order to prepare for Earned Value Management; after working out project schedule and project resources planning, use value index method to select project resources provider, control project direct cost initially; when making project cost budget, use value index method to make out Sector Budget Limits of project indirect cost, control sector indirect costs according to the limits; after finding out deviation by monitoring during project implementation stage, use value index method to settle the best remedial measure and carry it out, then reduce the loss of project.Finally, the paper illustrate how to merge the function-cost analysis thinking of Value Engineering into the process of using Earned Value Management so as to control construction project cost by a project case.