The Project Cost Management And Study Of Cost Control By The Earned Value Method

Each enterprise always focuses on the cost control of the project that is a key of success in performing the project. Cost control theory is a very important part of the cost management. The research of cost control theory makes theory references on controlling the project cost, which gains the goal of managing the project quality and process. In factual project management, the cost control theory has played a significant role and has been widely used in many areas. This paper analyzes the history and research status quo of the project management, and it explains the gaps between China and foreign countries in project management. Through the comprehension on the knowledge system of project management, this paper educes the studying on the cost theory of project management and introduces the content, main task of the cost theory. By the analysis in the cost control theory, this paper enumerates the effects of engineering value theory on the cost control. On the research of the project cost control theory, this paper uses the earned value method to explain how to conduct the cost control through analyzing the various parameters of earned value method. Aiming at misunderstanding of "earned value", this paper brings forward some new views and analyzes the concept of "earned value". The project administrators usually neglect "failure of earned value"in the process of controlling cost. This paper gives an example that illustrates how to fail in the cost control by using "earned value"in order to raise a new means which could avoid "failure of earned value". This paper gives a birth to "four value"method on the basis of "three value"method . The main idea of "four value"method is to control the profit margin in an ideal extension through the expense and profit control in the project management. Moreover, this paper also clarifies the disadvantages and limits of "four value"method. Finally, this paper not only analyzes the parameters from "521 program development and project adjustment"of ChongQing Logging Company by exerting "three value"method, "S curve"and cost performance analysis chart, but also makes use of "four value"method on analyzing this case.