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PROJECT MANAGEMENT

PROJECT MANAGEMENT. Prof. Dr. Ahmed Farouk Abdul Moneim . PROJECT TIME-COST OPTIMIZATION. Undertaking the responsibility of completing projects, entails TWO main Risks: RISK of TIME-OVERRUN with probability P(Project Time > Contract Time)

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PROJECT MANAGEMENT

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  1. PROJECT MANAGEMENT Prof. Dr. Ahmed Farouk Abdul Moneim

  2. PROJECT TIME-COST OPTIMIZATION

  3. Undertaking the responsibility of completing projects, entails TWO main Risks: • RISK of TIME-OVERRUN with probability • P(Project Time > Contract Time) • 2) RISK of COST- OVERRUN with probability • P(Project Total Cost > Allocated BUDGET) PROJECT SUCCESS PROBABILITY: Consider the following Events: A = ( Project Time < Contract Time B= (Project Total Cost < Allocated Budget) PROJECT SUCCESS PROBABILITY (Psuccess) is given as follows:

  4. PROJECT TOTAL COST ANALYSIS: • PROJECT DIRECT COST as the Sum of Direct costs of ALL Activities • Workmanship + Direct Materials • 2) PROJECT INDIRECT COST as the sum of Project share in: • Capital Costs+ Supplies Costs+ Management Costs • It is generally evaluated as a function of the Project Completion Time • P_InD_Cost Project Indirect Cost • IR Daily rate of incurring the Generalized Expenses • T Project Completion Time in days • αA Coefficient (α>=1)

  5. PROJECT TIME-COST OPTIMIZATION Problems of Time-Cost Optimization could be categorized as follows: • Deterministic Problems • A1) Optimum Project Time that Minimizing Total Project Cost • A2) Binary Programming Models (Multi-Modal execution of Activities) • A3) Multi-Objective Programming • A4) Goal Programming targeting specified values of Total Cost and Duration • B) Stochastic Time-Cost Optimization • B1) Activities Durations and Costs are RANDOM whereas Budget is deterministic • B2) All Inputs are RANDOM

  6. Deterministic Problems • Problem Formulation • Linear Programming • Cost Elements: • Direct Cost • Indirect Cost • Direct Cost Linear Function. • The cost is defined in terms of a cost slope which is cost per unit increase in activity time. Where, CCij is the Crash Cost of activity ij when compressed to minimum possible time CDij. NCij is normal cost incurred when the activity is executed in the normal duration NDij. Indirect cost is the cost element not related directly to the activities. It is function of the Project Completion Time. Decision Variables The amount of Compression of Activity I j duration Objective Function The Starting Time of Activity i j The Project Completion Time The Number of Activities

  7. The LINEAR PROGRAM Subject to Is the Normal Duration of Activity ij Example (See Excel Sheet)

  8. Binary Programming Multi-Modal Execution of Activities Example (See Excel Sheet)

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