Abstract
The effects of uncertainty on a project and the risk event as the consequence of uncertainty are analyzed. The uncertainty index is proposed as a quantitative measure for evaluating the uncertainty of a project. This is done by employing entropy as the indicator of system disorder and lack of information. By employing this index, the uncertainty of each activity and its increase due to risk effects as well as project uncertainty changes as a function of time can be assessed. The results are implemented and analyzed for a small turbojet engine development project as the case study. The results of this study can be useful for project managers and other stakeholders for selecting the most effective risk management and uncertainty controlling method.
Highlights
One of the most prominent aspects of each project and especially complex projects is the influence of uncertainty on achieving the project goals
One of the first works on quantification of uncertainty in a project was performed in [4] where the authors proposed the entropy as a measure of project uncertainty and implemented entropy concept for a project with deterministic PERT distribution and uncertain durations
The influence of rework risk types on project uncertainty is higher than other risk types as they affect set of activities and not a single one
Summary
One of the most prominent aspects of each project and especially complex projects is the influence of uncertainty on achieving the project goals. One of the first works on quantification of uncertainty in a project was performed in [4] where the authors proposed the entropy as a measure of project uncertainty and implemented entropy concept for a project with deterministic PERT distribution and uncertain durations. They suggested decreasing project entropy level at project milestones and implemented the results in a petroleum plant project in Russia. A method for estimating uncertainty was proposed that consisted of four parts: the uncertainty of the environment; uncertainty of managerial decision-making; uncertainty of consequences and future implementation of management decisions and vartational uncertainty
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