Project Risk Reduction

Walter Gutjahr, Christine Strauss, Martin Toth

Especially in two classical categories of manufacturing systems there is an essential need for application of advanced methods of project management: make-to-order and make- or engineer-to-order systems highly depend on sound project planning tools. The technique presented is most suitable to determine a time-cost trade-off based on practice-relevant assumptions. Overruns of completion times usually cause penalties depending on the degree of the exceed relative to the completion time agreed upon with the customer. To avoid such penalties - or at least to keep the loss low - distinct activities are to be crashed by one or several measures that decrease the duration time of an activity. The risk of a project overrun has to be weigh against the expected
costs and benefits of certain crashing measures and their combinations. The technique presented is a new PERT-based approach using Simulated Annealing and Importance Sampling to determine (in the sense described) "advantageous" crashing measures.

Significance: Activity crashing is an essential means to avoid time overruns in industrial engineering projects. The reliable estimation of costs and benefits of crashing measures and their effects on the overall project duration plays a key role in sound project planning and management. The presented new approach combines a well established meta-heuristic (Simulated Annealing) and a rare event simulation technique (Importance Sampling) to meet all possible

Keywords: activity crashing, critical path method, importance sampling, PERT, risk management, simulated annealing

Institut für Statistik und Operations Research, Institut für Rechnungswesen, Innovation und Strategie
Anzahl der Seiten
ÖFOS 2012
101015 Operations Research, 502030 Projektmanagement
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