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The combined impact of stochastic and correlated activity durations and design uncertainty on project plans

Abstract

Most model based studies on project uncertainty investigate a single source of uncertainty, with a dominant focus on stochastic activity durations. However, another major uncertainty facing engineering projects is that of changes in design troughout the project delivery. This may come from uncertainty in the market, technology, or regulations, leading to changes in design and implementation paths, with alterations in the project network itself. This comes on top of stochastic and correlated activity durations for a given design. In this paper we develop a stochastic program to investigate how uncertainty in design and activity durations, together, affect planning, and their relationships. The findings suggest that when design uncertainty is modelled by multiple alternatives and delayed decisions on the final alternative, stochastic and correlated activity durations have limited impact. In situations with alternative and subtitutable solutions available for a given design, correlations drive a certain learning behaviour.
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Category

Academic article

Language

English

Author(s)

Affiliation

  • SINTEF Industry / Sustainable Energy Technology
  • Norwegian School of Economics
  • Norwegian University of Science and Technology

Date

29.12.2020

Year

2020

Published in

International Journal of Production Economics

ISSN

0925-5273

Volume

233

View this publication at Norwegian Research Information Repository