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Analyzing Integrated Cost‐Schedule Risk for Complex Product Systems R&D Projects

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Listed:
  • Zhe Xu
  • Jing Yu
  • Hongbo Li

Abstract

The vast majority of the research efforts in project risk management tend to assess cost risk and schedule risk independently. However, project cost and time are related in reality and the relationship between them should be analyzed directly. We propose an integrated cost and schedule risk assessment model for complex product systems R&D projects. Graphical evaluation review technique (GERT), Monte Carlo simulation, and probability distribution theory are utilized to establish the model. In addition, statistical analysis and regression analysis techniques are employed to analyze simulation outputs. Finally, a complex product systems R&D project as an example is modeled by the proposed approach and the simulation outputs are analyzed to illustrate the effectiveness of the risk assessment model. It seems that integrating cost and schedule risk assessment can provide more reliable risk estimation results.

Suggested Citation

  • Zhe Xu & Jing Yu & Hongbo Li, 2014. "Analyzing Integrated Cost‐Schedule Risk for Complex Product Systems R&D Projects," Journal of Applied Mathematics, John Wiley & Sons, vol. 2014(1).
    • Handle: RePEc:wly:jnljam:v:2014:y:2014:i:1:n:472640
    DOI: 10.1155/2014/472640
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    References listed on IDEAS

    as
    1. Hobday, Mike, 1998. "Product complexity, innovation and industrial organisation," Research Policy, Elsevier, vol. 26(6), pages 689-710, February.
    2. Y. P. Poh & J. H. M. Tah, 2006. "Integrated duration-cost influence network for modelling risk impacts on construction tasks," Construction Management and Economics, Taylor & Francis Journals, vol. 24(8), pages 861-868.
    3. Seyed Mohammad Seyedhoseini & Siamak Noori & Mohammad Ali Hatefi, 2009. "An Integrated Methodology for Assessment and Selection of the Project Risk Response Actions," Risk Analysis, John Wiley & Sons, vol. 29(5), pages 752-763, May.
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