Application Research On Earned Value Method For Project Cost Control In Second Company Of China Railway First Group

In terms of a project, construction phase is the core and the most important phase of all.In order to achieve expected economic goals, effective cost control is a must in any project construction phase. In today’s market-oriented economy, cost control of a project not only goes through all phases of the project life cycle, but also performs an essential role in project management.This shows that an in-depth discussion and research of the cost control in project is quite necessary. In recent years, the production methods of construction enterprises are constantly changing. The main reason is the management system of infrastructural construction has been changed. Whatever the changes,the focus of all construction enterprise is still the project management and cost control is the top priority of it. Project cost control has played a crucial role in the operation and management of any construction enterprises.Therefore, in order to improve social status and enhance the core competitiveness of construction enterprises, effective cost control has becoming the primary task.The purpose of this thesis is to introduce Earned Value Method into the construction projects of Second Engineering Company of China Railway First Group. Earned Value Method is a project management technique for measuring project performance and progress,which could be used to improve the cost and schedule control of projects. The application of this method will also help the company adapt to the everchanging market-oriented economy,be brought in line with international practice and remain competitive in the industry. In this paper, Earned Value Method is working as a theoretical basis. By using earned value analysis and work breakdown structure, project cost and schedule are perfectly wedded, thus solving the past cost and schedule separation issue. Also, project cost responsibility has been implemented. This thesis first introduces the basic concepts and theory of project cost control and earned value management, providing theoretical foundation to the practical application of earned value management. Then it analyzes the current condition and system of cost control of the Company, pointing out the disorder between project duration and cost control and the causes behind it. Whereafter, it describes the principle and steps of earned value management utilized by the Company. Tuo Tai Pu Project is used as an example showing the implementation process of Earned Value. In the end, it summarizes some solutions in the application process of Earned Value. Following conclusion is obtained frompractice: Earned Value Method is a scientific method that integrates project cost and schedule by using the quantity of money as the uniform measure and controlling the cost and schedule simultaneously. From the project management perspective, this method is an advanced cost and schedule control technique.