Operations Management and Strategic Management · Project Management, Monitoring and Control

Project Monitoring, Control and Resource Levelling

Updated 10 October 2026 · Fact-checked

Project monitoring tracks actual progress, cost and quality against the plan. Control takes corrective action when variances appear. Resource levelling reschedules activities, critical ones too if needed, to keep demand within resource limits, even if the project finishes later. To solve questions, compare planned and actual, find the variance, then recommend action.

Understand Project Monitoring, Control and Resource Levelling

A project plan is only a forecast. Once work starts, reality differs from the plan. Monitoring means collecting facts regularly: work done, time spent, money spent and quality achieved. Control means comparing those facts with the plan and acting on the gap.

The control cycle has four parts: set the baseline (time, cost, scope), measure actual performance, analyse the variance, and take corrective action. Then you repeat it. Tools include progress reports, milestone reviews, Gantt charts, network updates (re-running CPM/PERT with actual dates), budget-versus-actual statements and earned value analysis.

In earned value analysis, you compare three figures. Planned Value (PV) is the budgeted cost of work scheduled. Earned Value (EV) is the budgeted cost of work actually done. Actual Cost (AC) is what you really spent. EV minus AC tells you about cost; EV minus PV tells you about schedule. Negative means bad news.

Resource allocation assigns people, machines and money to activities. A network drawn only for time may need more resources on one day than you have. Resource levelling fixes this when resources are limited. It may delay any activity, including critical ones, so that demand stays within the limit. This can extend the project end date. Resource smoothing is gentler: it evens out demand using only the float of non-critical activities, so the project end date stays unchanged.

Delays and cost overruns usually come from poor estimates, scope changes, late approvals or material supply, resource shortage, weak coordination, rework from poor quality, and weak monitoring. Good control catches them early, when correction is cheap.

Key rules to remember

Cost variance (CV): CV = EV − AC; Negative means over budget; positive means under budget.
Schedule variance (SV): SV = EV − PV; Negative means behind schedule; positive means ahead.
Cost performance index (CPI): CPI = EV ÷ AC; Below 1 means you get less than ₹1 of work for each ₹1 spent.
Schedule performance index (SPI): SPI = EV ÷ PV; Below 1 means progress is slower than planned.
Estimate at completion (EAC): EAC = BAC ÷ CPI; BAC is budget at completion. Assumes the current cost efficiency continues.
Float (slack): Total float = LST − EST (or LFT − EFT); Float is the room to delay a non-critical activity without delaying the project. Critical activities have zero float.
Levelling versus smoothing: Levelling: may delay any activity, so end date may change. Smoothing: float only, end date fixed.; Both aim at even resource use. Levelling is used when resources are limited.

How to solve Project Monitoring, Control and Resource Levelling questions

Use this method for numerical and descriptive questions on monitoring, control and resources.

1Identify what is asked: variance, index, forecast, or a resource schedule.
2Write the planned (baseline) and actual figures clearly. For earned value, list PV, EV, AC and BAC.
3Compute variances and indices using the formulas. Note the sign and what it means.
4For resource questions, draw the network or bar chart, mark the critical path and float, and list resource needs period by period.
5To keep the end date fixed (smoothing), shift non-critical activities within their float to reduce peaks. Recheck the total each period against the limit.
6State the effect on project duration: unchanged for smoothing, possibly longer for levelling.
7Interpret the result in one or two lines and recommend corrective action, such as crashing, reallocating resources or revising the budget.

Quickest way: Sign-and-index shortcut

When to use it: Use for MCQs and short numerical parts on earned value or resource peaks.

For earned value, compute CV and SV first. The sign alone often answers the MCQ.
Use indices: CPI or SPI below 1 is adverse, above 1 is favourable.
For resource peaks, tabulate demand per period and move only activities with float.
Never move a critical activity when asked to keep the end date fixed.

Common mistakes in Project Monitoring, Control and Resource Levelling

Calculating variance as AC − EV and then reading the sign the wrong way.
Students mix cost accounting variance conventions with project earned value conventions.
Fix: Always use EV minus AC and EV minus PV. Negative is adverse for both.
Confusing resource levelling with resource smoothing.
Both sound like evening out demand.
Fix: Remember: smoothing keeps the end date and uses float only; levelling may delay any activity, even critical ones, and so may extend the end date because resources are limited.
Delaying a critical activity when the end date must stay fixed.
Students look only at the resource peak and ignore float.
Fix: Check float first. Critical activities have zero float, so under smoothing only non-critical ones can move. In levelling, a critical activity may be delayed only if you accept a later end date.
Using planned value instead of earned value for cost variance.
PV and EV are both budget figures and look alike.
Fix: PV is work scheduled; EV is work actually completed. Use EV in both variances.
Giving only numbers with no interpretation or action.
Students stop once the calculation is done.
Fix: Add a closing line: what the variance means and the corrective step, such as adding resources or revising the plan.

Worked examples

Example 1

A project has a budget at completion of ₹40,00,000. At the review date, the work scheduled was worth ₹15,00,000, the work actually completed was worth ₹12,00,000, and the actual cost incurred is ₹14,00,000. Calculate CV, SV, CPI, SPI and EAC (assuming current cost efficiency continues), and interpret.

Show the solution

PV = ₹15,00,000; EV = ₹12,00,000; AC = ₹14,00,000; BAC = ₹40,00,000.
CV = EV − AC = 12,00,000 − 14,00,000 = −₹2,00,000 (over budget).
SV = EV − PV = 12,00,000 − 15,00,000 = −₹3,00,000 (behind schedule).
CPI = 12,00,000 ÷ 14,00,000 = 0.857 (approx.).
SPI = 12,00,000 ÷ 15,00,000 = 0.80.
EAC = BAC ÷ CPI = 40,00,000 ÷ 0.857 = ₹46,66,667 (approx.), which equals 40,00,000 × 14 ÷ 12.
Interpretation: the project is both over budget and behind schedule. Corrective action is needed, such as reviewing productivity, reallocating resources and re-estimating the remaining work.

Answer: CV = −₹2,00,000; SV = −₹3,00,000; CPI ≈ 0.857; SPI = 0.80; EAC ≈ ₹46,66,667. The project is over budget and behind schedule.

Example 2

A project has three activities. A (critical) runs in days 1-4 and needs 5 workers. B (critical) runs in days 5-8 and needs 4 workers. C is non-critical, needs 3 workers for 4 days, and can start any time from day 1 to day 5 (it must finish by day 8). The available workforce is 7. Schedule C so that demand never exceeds 7 and the project end date does not change.

Show the solution

Critical activities cannot move. Demand from A and B alone is 5 workers on days 1-4 and 4 workers on days 5-8.
If C starts on day 1, it runs days 1-4 and demand is 5 + 3 = 8 on those days. This exceeds the limit of 7.
Starting C on day 2, 3 or 4 also overlaps A on at least one day (day 4 for a day 4 start) where demand is 8, so these starts fail too.
Check float: C's earliest start is day 1 and its latest finish is day 8, so its latest start is day 5. Float = 5 − 1 = 4 days, so C can start on any day from 1 to 5.
Start C on day 5, running days 5-8. Demand is 5 + 0 = 5 workers on days 1-4 and 4 + 3 = 7 workers on days 5-8.
Peak demand falls from 8 to 7, which is within the limit, and B and C finish on day 8, so the end date is unchanged.

Answer: Start C on day 5 (the only feasible start within its float). Demand is 5 workers on days 1-4 and 7 workers on days 5-8, within the limit of 7, and the project still ends on day 8. Because only float of a non-critical activity was used, this is resource smoothing.

Exam tips

Write the formula and the sign meaning in every earned value answer. Step marks are given for method and interpretation.
In theory questions, define levelling and smoothing separately and state the effect on project duration.
List causes of delay and cost overrun in short grouped points, such as planning, resources, external and control causes, and add one remedy for each.
For MCQs, test the sign first. Negative CV or SV is adverse, and an index below 1 is adverse.

Practice questions from Project Management, Monitoring and Control

Project Monitoring, Control and Resource Levelling in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Project Monitoring, Control and Resource Levelling: frequently asked questions

What is the difference between resource levelling and resource smoothing?

Resource smoothing evens out demand using only the float of non-critical activities, so the project end date does not change. Resource levelling keeps demand within a resource limit and may delay any activity, including critical ones, so the project may finish later.

What does a negative cost variance mean?

It means the work done has cost more than its budgeted value, since EV is less than AC. The project is over budget at that point. You should find the cause and decide on corrective action.

What are the main causes of project delays and cost overruns?

Common causes are poor estimates, scope changes, late approvals, shortage of resources or materials, weak coordination, rework and poor monitoring. Group them in your answer and add a remedy for each.

How is project progress monitored in practice?

You compare actual progress with the baseline using progress reports, milestone reviews, Gantt charts, updated networks and budget-versus-actual statements. Earned value analysis combines time and cost in one view.