ORIGINAL ARTICLE Designing a control mechanism using earned value analysis: an application to production environment Morteza Bagherpour & Abalfazl Zareei & Siamak Noori & Mehdi Heydari Received: 27 April 2008 / Accepted: 26 October 2009 / Published online: 18 November 2009 # Springer-Verlag London Limited 2009 Abstract Earned value analysis is a project performance method which simultaneously presents both cost and schedule performances. The purpose of this paper is to model the uncertainty associated with activity duration in earned value analysis. The approach incorporates to design a control mechanism, which would be applicable through production control as well as project management problems. The job processing times have been considered as triangular fuzzy number. Costs are assumed to be directly related to fuzzy activity time, which are estimated through a bottom up hierarchy process. Consequently, different earned value metrics have been achieved. Research findings provide an efficient control mechanism in earned value analysis, which would be highly applicable in production control area. This research also yields a novel approach for representing a production perfor- mance index during implementation of production processes. In addition to the above mentioned issues, forecasting features can be further performed for predicting completion time of products for delivery to the customer. The approach presented in this paper has been successfully implemented through a multi- period–multi-product production planning problems, which efficiently demonstrates the applicability of the proposed control mechanism. Keywords Earned value analysis . Production management . Performance index . Fuzzy number 1 Introduction In manufacturing environments, planning issues have been taken into considerations for many years and several researches have been carried out in this field. However, it seems that the focus on manufacturing and production planning concepts are much more than designing a well- organized production control system, which enable manufac- turers to manage production and manufacturing processes. It is thus possible to integrate production planning problems with control tools, even in other fields such as the control mechanism which has previously developed in project management area. As a project management control tool, earned value analysis (EVA) simultaneously manages both the time and cost of a project. In this respect, schedule performance index (SPI) and cost performance index (CPI) are intro- duced as earned value (EV) metrics, which measure project performance from both schedule and cost point of views. Traditionally, SPI and CPI are calculated by dividing EV amount by planned value (PV) and actual cost (AC), respectively. Thus, EV amount is used in both SPI and CPI calculations and consequently it is important to measure it correctly. In the project management context and related researches, EV and PV have been deterministically considered, while some unexpected and even uncontrolla- ble parameters (such as reworks, weather condition, emergency situations, material needed for processing, etc.) may cause a significant variation in estimation of activity duration or job processing time. Although, the manufacturer may apply a deterministically point estima- tion, however, it is obviously better to take into consider- M. Bagherpour (*) : A. Zareei : S. Noori : M. Heydari Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran e-mail: mortezabagherpour@gmail.com Int J Adv Manuf Technol (2010) 49:419–429 DOI 10.1007/s00170-009-2406-z