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1 Curve Budget, Project budget/Schedule tradeoffs, Project Budget Optimization, Contingency Planning, Project Baseline and Change Control Maryam Ejaz, Kris J. Girvan, Bridget N. Hart, Scott Hetrick, Eric J. Hilliard, Matthew S. Ignacek Embry-Riddle Aeronautical University PMGT 391: Project Planning 1

2 Curve Budget A curve budget, also known as a flexible budget or variable budget, is a budgeting approach that adjusts to changes in business activity levels. This type of budgeting is particularly useful for companies that experience frequent changes in activity levels, such as seasonal businesses or those affected by economic fluctuations. When it comes to controlling a project’s performance, a project manager needs to be able to track whether the project is on budget and on-schedule and can predict how it will continue to perform. The knowledge will direct the project manager to communicate with stakeholders, reallocate resources, speed up timelines, delay tasks, or prepare for budget overruns. One tool that can assist with this responsibility is the S-curve chart. An S-curve chart plots the progress of specified variables over a period as well as cumulatively over a project's lifecycle. The chart will track planned value, earned value, and actual cost which can then be easily compared to determine how the project is performing (Project Management Institute, 2017). Progress-based S-curves can track cost, time, and progress. This allows the project manager to evaluate the percentage of activities completed based on the assigned budget (planned value) and compare it to what was spent to complete the activities (actual cost), as well as what the value of the work is that was conducted (earned value). The chart often takes on the shape of an inverted “S”, hence the name (Barraza & Bueno, 2007).

3 Annotated Bibliography Academic resources: Barraza, G. A., Back, W. E., & Mata, F. (2004). Probabilistic Forecasting of Project Performance Using Stochastic S Curves. Journal of Construction Engineering and Management, 130(1), 25–32. https://doi.org/10.1061/(ASCE)0733-9364(2004)130:1(25) The authors of this article presented an alternative to deterministic S curves, the stochastic S curve. The stochastic S (SS) curve uses simulations to create possible progress-based S curves, allowing the project manager to see all values of cost and duration. The authors used a computer simulation program called Stochastic Performance Control with Integrated SS curves (SPECIESS) that can be used in Microsoft excel. Takeaway: When it comes to controlling a project’s performance, it is important to monitor any cost and time variances for the actual project progress as well as can forecast project performance at completion. Criticism: The authors only used data from one construction project, which may not be an accurate representation. Barraza, G. A., & Bueno, R. A. (2007). Probabilistic Control of Project Performance Using Control Limit Curves. Journal of Construction Engineering and Management, 133(12), 957–965. https://doi.org/10.1061/(ASCE)0733-9364(2007)133:12(957) In this article, the authors introduce a probabilistic project control concept to assure acceptable project performance forecasts. Their concept implements performance control limit curves and the Stochastic S curve.

4 Takeaways: The control process can be broken down into three different subfunctions: monitoring performance, evaluating performance, and correcting performance. Criticism: No criticism noted. The authors were thorough in explaining their concept and showing why they stated their concept is more accurate than deterministic methods. Konior, J., & Szóstak, M. (2020). The S-Curve as a Tool for Planning and Controlling of Construction Process—Case Study. Applied Sciences, 10(6), 2071–. https://doi.org/10.3390/app10062071 In the article, the authors investigate why sample constructions projects did not meet the planned deadline and budget. They utilized the S-curve that measures the utilization of the financial outlays by presenting the planned financial flow on a timeline. Takeaways: S-curve charts show the investment progress of a project from start to finish. The chart takes on the shape of the letter “S,” hence the name. Criticism: The authors only reviewed one construction project, which may not be an accurate representation. Practitioners References: Gray, C. F., & Larson, E. W. (2020). Project Management: The Managerial Process . McGraw- Hill Education. In this book, the authors briefly discuss the S-curve under managing risks and probability analysis. They discuss the various techniques a project manager can use to aid them in assessing risks including using the correlation between past projects’ cash flow and S- curves to assess project cash flow risks.

5 Takeaway: An S-curve chart shows the cumulative project cost curve over a project's life. While it is a tool that can be used to monitor and control costs, it also aids in assessing various cash flow risks. Criticism: The book does not touch on the S-curve outside of a brief definition. Lu, W., Peng, Y., Chen, X., Skitmore, M., & Zhang, X. (2016). The S-curve for forecasting waste generation in construction projects. Waste Management (Elmsford), 56, 23–34. https://doi.org/10.1016/j.wasman.2016.07.039 In this article, the authors discuss using an S-curve model to track and forecast waste generation over a project’s lifecycle. The proposed model can forecast overall waste generation prior to the project starting as well as monito a baseline of waste generation throughout the project. Takeaway: To aid in decision making, it is desirable to have a model that can forecast the required information, in this case waste generation. Criticism: Although this was an interesting application of an S-curve chart, the article had nothing to do with budget. Project Management Institute. (2017). A guide to the Project Management Body of Knowledge (PMBOK guide) (6th ed.). Project Management Institute. Under the control costs section of the PMBOK guide, the guide discusses the S-curve. The S-curve can be used when tracking whether a project is over budget or behind schedule. The S-curve chart tracks the planned value, earned value and actual cost over period basis as well as cumulative basis.

6 Takeaway: Using the S-curve, a project manager can develop a forecast for the estimate at completion and see if it will differ from the budget at completion and plan accordingly. Criticism: This guide did not go into much detail about the S-curve chart.

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