Issue: 2008/Vol.18/No.3, Pages 5-15
ESTIMATION OF LONG-TERM PROJECT RISK DURING PROJECT REALIZATION – COMBINATION OF THE EARNED VALUE AND PRESENT VALUE METHODS
Barbara Gładysz
, Dorota Kuchta
Cite as: B. Gładysz, D. Kuchta. Estimation of long-term project risk during project realization – combination of the earned value and present value methods. Operations Research and Decisions 2008: 18(3), 5-15.
Abstract
The paper proposes a combination of two methods: the Net Present Value Method and the Earned Value Method – to control the risk of not achieving the targeted value of long-term projects. The method is capable, like the Earned Value Method, to forecast future financial overruns ahead of time and to warn the project manager long before the event itself occurs so that the project manager has time to handle the problem. On the other hand, the proposed method is able, like the Net Present Value, to take the time value of money into account.
Keywords: Net Present Value Method, Earned Value Method, project, risk
Received: Accepted: