This paper, first, seeks to remedy this problem by proposing a practical procedure of allocating overhead costs in project-based organizations. Then the traditional EVM indices are revised by considering the allocated overhead costs. | A modified earned value management using activity based costing Journal of Project Management 1 2016 41 54 Contents lists available at GrowingScience Journal of Project Management homepage A modified earned value management using activity based costing Vahid Aminiana Amir Rahimi Nejadb Seyyed Taha Hossein Mortajia and Morteza Bagherpoura a Department of Industrial Engineering Iran University of Science and Technology Tehran Iran b Department of Management Business Administration Sharif University of Technology Tehran Iran CHRONICLE ABSTRACT Article history Earned Value Management EVM has been a well-known methodology used since the 1960s Received October 1 2016 when the US department of defense proposed a standard method to measure project perfor- Received in revised format No- mance. This system relies on a set of often straightforward metrics to measure and evaluate the vember 16 2016 general health of a project. These metrics serve as early warning signals to timely detect project Accepted March 11 2017 Available online problems or to exploit project opportunities. A key aspect of EVM is to estimate the completion March 11 2017 cost of a project by considering both cost and schedule performance indices. However good Keywords performance of cost and schedule performance indices does not necessarily guarantee cost ef- Earned value management fectiveness of the project regardless of the overhead costs. The reason is because in most pro- Activity based costing ject-based organizations overhead costs constitute a significant proportion of the total costs. Overhead cost However EVM indices are usually calculated in the absence of the so-called overhead costs. Revised schedule performance in- This paper first seeks to remedy this problem by proposing a practical procedure of allocating dex overhead costs in project-based organizations. Then the traditional EVM indices are revised by Revised cost performance index considering the allocated .
