Abstract
This study aims to develop and provide a comprehensive evaluation strategy for schedule-related variations and time-cost analysis for an engineering–procurement–construction (EPC) project. Time-cost analysis is an important aspect of project scheduling, particularly in long-term and costly EPC projects. In this study, a hybrid method is proposed for the time-cost optimization strategy evaluation of a project. Monte Carlo simulation is applied to determine contingency plans and realize the effective management of estimated schedule uncertainties. A mathematical integer linear programming optimization model coded using CPLEX is developed to assess appropriate strategies for project execution under time and cost constraints. A set of project evaluation optimization models considering risk and project crash plan and the relationship between crash cost and delay penalty is also developed for assessing project feasibility. The correlation between project risk and crashing strategy has seldom been evaluated simultaneously in previous research. This work fills this research gap by quantifying the feasibility of a project, with combined data on risk, schedule, and cost as evaluation indicators. It allows project managers to consider management issues and strategies before they implement projects. A practical example with numerical applications is presented to illustrate the contribution of the decision-making support mechanism, and several managerial insights are provided.
Highlights
Construction projects are being implemented with diversified contents and shortened plant construction time due to the rapid growth of the competitive modern market and the need for quickly profitable investments
Project managers should understand key reservations about standard critical path method (CPM) and should know how to perform a schedule risk analysis to obtain information that is crucial to project success before they embark on projects
Various risks and uncertainties exist in EPC projects
Summary
Construction projects are being implemented with diversified contents and shortened plant construction time due to the rapid growth of the competitive modern market and the need for quickly profitable investments. Project managers must design and implement mitigating strategies to overcome the growing uncertainty faced by projects. The traditional critical path method (CPM) has been widely used in the construction industry for schedule analysis and project planning since the 1950s. The backwardness of any activity in critical paths affects the completion of the entire project after a project starts. CPM scheduling is accurate only when every activity begins as planned and consumes the same amount of time as estimated. Given that projects generally do not proceed as planned, CPM can only serve as the beginning of project schedule management. Project managers should understand key reservations about standard CPM and should know how to perform a schedule risk analysis to obtain information that is crucial to project success before they embark on projects
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