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A Risk based Project value Model to Obtain the Optimum Value of Activities’ Costs

Salari, Mostafa | 2014

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 45906 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Kianfar, Farhad
  7. Abstract:
  8. In the proposed model, it is attempted to obtain the optimum cost of activities concerning their relevant risks. I n doing so, the concept of risk based project value (RPV) has been employed to measure the expected earn of each individual activity in the presence of risks. Generally, in the model, the risks are divided into critical and non-critical risks. Critical risks cause termination of activities and non-critical risks that are not as severe as critical risks and lead to monetary lost. In the next step, the risk response plans are utilized to reduce the possible adverse effects of risks. These plans, also known as action plans, are the preventive or adaptive actions that aim to reduce the probability or expected lost that would be resulted from the risks. The risk response plans cause additional costs for each activity, so it is important to choose a level of plans that does not exceed the total expected reserves for risk handling actions. That’s when the concept of RPV comes to play and acts as an objective function. Hence, the problem becomes as finding the most appropriate response plans for each activity to maximize the value of whole project while satisfying the available constraints. Among several novelty of the proposed approach, regarding the network of project, applying time value of money, and considering dependencies of response plans are of the most significant ones. Eventually, one illustrative example which is mainly driven from one of studies in the literature has been employed to indicate the application of the proposed model
  9. Keywords:
  10. Risk Management ; Optimum Activities Cost ; Risk-Based Project Value ; Critical Risk ; Noncritical Risk

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