A multiobjective optimization model for project selection with probabilistic considerations

A multiobjective optimization model for project selection with probabilistic considerations

0.00 Avg rating0 Votes
Article ID: iaor20071162
Country: Netherlands
Volume: 40
Issue: 4
Start Page Number: 297
End Page Number: 313
Publication Date: Dec 2006
Journal: Socio-Economic Planning Sciences
Authors: , , ,
Keywords: decision theory: multiple criteria, risk
Abstract:

When faced with limited resources, project managers must determine which projects to fund at what levels from a pool of potential ones. This problem of project selection is inherently multiobjective since various factors, such as the available budget, the chance of success, and the efficient allocation of the project team, must be considered simultaneously. The uncertainty of the data at the time decisions are made further complicates project selection. In this paper, a multiobjective, integer-constrained optimization model with competing objectives for project selection is formulated using probability distributions to describe costs. The objectives correspond to important project criteria, such as: rank (value), managerial labor needed, and average cost. The subjective rank is determined via the Analytic Hierarchy Process. The model is applied to a data set from a US government agency that involves 84 separate projects. The results indicate improved budgetary efficiency compared to the actual project selection, thus supporting use of the model for public sector project selection. The model is unique since it integrates multiobjective optimization, Monte Carlo simulation, and the Analytic Hierarchy Process.

Reviews

Required fields are marked *. Your email address will not be published.