Project Risk time Management – A Proposed Model and a Case Study in the Construction Industry

This paper proposes a mathematical model supporting the management of project risk. The model distinguishes between risks which have to be accepted and risks which can be eliminated at some cost, helping to decide which risks should be eliminated so that the customer requirements with respect to project completion time can be satisfied at minimal cost. The model is based on a modification of the PERT method and can be reduced to a mixed linear programming problem. The model is illustrated by means of a real world case concerning a construction project.