Strategic project planning: Optimal contracting and resource allocation

Abstract

In this work, we describe the development of a robust optimization model aimed at determining an optimal strategy for contracting and allocating resources within the context of development and implementation of capital projects. The proposed model selects a set of activity execution modes { which differ from each other in terms of related costs and expected durations { and risk-mitigation measures { associated with uncertainties due to incomplete knowledge of the activities' exact scope { so as to balance the trade-off between incurred costs and the project's completion date. Computational results are provided to illustrate the proposed approach. © IFAC.