Project Crashing Optimization Strategy with Risk Consideration
Read this article. The study develops a comprehensive evaluation strategy for project management. Section 2.1, Schedule Method-CPM/PERT, suggests that CPM does not consider risk or uncertainty. What would you add to a sensitivity analysis such that it could address risks or uncertainties?
Background
Research Objectives and Issues
This study aims to quantify the feasibility of a project by using data on risk, schedule, and cost as evaluation indicators. The following issues are raised to fulfill the objectives.
(1) How can project execution proceed in consideration of project schedule risk management and crashing strategy? Comprehensive stepwise workflows for schedule risk management and time-cost trade-off analysis are proposed in this study to conduct a quantitative analysis that would aid management in decision-making and performing proactive actions.
(2) How can project risk and the probability of a target schedule for project completion be considered simultaneously? A quantitative risk analysis is performed to provide a numerical estimate of the sensitive schedule risk effect on the project. Monte Carlo simulation, through statistical distribution functions, can be used to compute the probability of project schedule completion under a dynamic situation.
(3) How can project schedule and cost be optimized under risk consideration? The most sensitive schedule risk activities on the critical path in the project are identified by Monte Carlo simulation method and then an integer linear programming method is used to derive the optimal solution according to the proposed models. Quantifying the project risks can address the gap in time-cost trade-off issues that may arise in reality.
(4) How can an optimal selection between crash cost and delay penalty be achieved? The total crash cost under different scenarios can be determined through a proposed model solved by an integer linear programming method. Afterward, the relationship between crash cost and delay penalty can be compared to attain the optimal selection for project execution. When the total cost of the crash plan is higher than the upper limit of delay penalty, the project manager may stop the crash plan and pay the delay penalty to minimize the total project cost.