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?
Case Study
Project Background
A case study that uses Monte Carlo simulation for quantitative risk analysis and integer linear programming for time-cost trade-off is described below. The applied case is an EPC project for a high-value-added fertilizer plant that consists of raw material tanks, reactors, a nitric phosphate scrubber, handling conveying systems, and warehouse units. This plant, located in Taiwan, is a joint venture based on a 30%/70% share between a foreign company and a local government-based company. The total land area for this project is approximately 45,000 m2, with the required utility units to be developed. The requested schedule completion for this project is 976 days with a liquidated damage charging at 0.1% of the contract price per day of delay according to the contract condition. The estimated budget for this EPC project is 53,000,000 USD, and the ceiling penalty is 10% of the contract amount.