A Two-objective Robust Optimization Model for Project Risks Response Selection and Explanation Solution Method

Abstract

Risk management is one of the most important aspects of project management that identifies, assesses and responds to project risks. Although many papers have been published in project risk response, presented tools and methods are poor. Hence, in this paper, we present an optimization model to respond project risk that seeks to optimize two key criteria of project: cost and time. The proposed model has two objectives that one of them is minimization of the total cost that include abatement action cost and the cost of risk loss on project, and the other one is minimization of the time loss of risk (i.e., maximization robust measure) according to a free float activity’s measure. The model tries to choose abatement actions of risk that loss of them on time activity is greater than free float activity. Subsequently, three solution methods (i.e., exact, heuristic and meta-heuristic) are proposed. Then we create ten sample projects in three categories (i.e., small, medium and large scale) and solve the problems with the proposed methods and compare the results.