A study on the solution of time/cost trade-offs subject to penalty for delayed completion time in project management using LINGO

• Main Author: Mathieu MOREL
• Other Authors: Edward Yu-Hsien Lin
• Format: Others
• Language: en_US
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/2s8q9v

碩士 === 國立臺北科技大學 === 管理國際學生碩士專班 (IMBA) === 99 === Project management has become popular in the business community due to its impact on our economy. Companies that use project management have adopted different methods to control the cost of a project. Several different solution approaches have also been developed to facilitate the decision-making in project management with regard to project cost control. A technique called “Critical Path Method (CPM)” was developed in late 1950’s. Since then time/cost trade-offs in project management has become an extensive research subject. Time-cost tradeoff analysis attempts to find the optimal strategies in the selection of project activities to “crash” (a terminology used in project management equivalent to “shorten”) their activity times and to determine the number of time units each selected project activity should be crashed, so that the total cost can be minimized. The technique is also often referred to as the “Time/Cost Crashing Strategies”. This thesis conducts a research on the study of time/cost trade-offs subject to the situation when there is a penalty attached to the delayed project completion time. It is obvious that, without considering the damage of reputation, penalty should be compared with the cost of crashing project activities. Financially, it is more advantageous to take the penalty if the penalty is lower than the crash cost at a certain stage. Our research will develop a solution approach to address this situation. Based on this, we further developed a prototype software called “PENCOS” that links the Excel and LINGO to solve the time/cost trade-offs problems with penalty consideration.