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.