Managing Portfolios of Projects under Uncertainty

Managers of projects and multi-project programs often face considerable uncertainty in the duration and outcomes of specific tasks, as well as in the overall level of resources required by tasks. They must decide, in these uncertain conditions, how to allocate and manage scarce resources across many...

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Bibliographic Details
Published in:Annals of operations research 2004-11, Vol.132 (1-4), p.243-256
Main Authors: Nozick, Linda K., Turnquist, Mark A., Xu, Ningxiong
Format: Article
Language:English
Subjects:
Heuristic
Integer programming
Monte Carlo simulation
Operations research
Optimization
Portfolio management
Probability distribution
Product development
Project management
Scheduling
Studies
Uncertainty
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Summary:Managers of projects and multi-project programs often face considerable uncertainty in the duration and outcomes of specific tasks, as well as in the overall level of resources required by tasks. They must decide, in these uncertain conditions, how to allocate and manage scarce resources across many projects that have competing needs. This paper develops a nonlinear mixed-integer programming model for optimizing the resource allocations to individual tasks to minimize the completion times of a collection of projects. The model contains a very flexible representation of the effects of changing resource allocations on the probability distribution of task duration, so it can accommodate a wide variety of practical situations. A heuristic solution procedure is proposed that works quite effectively. An illustration involving a collection of bridge construction projects is provided. [PUBLICATION ABSTRACT]
ISSN:0254-5330
1572-9338
DOI:10.1023/B:ANOR.0000045285.12058.03