Multi-criteria Decision Aiding in Project Planning Using Decision Trees and Simulation
A good plan is fundamental for a project's success. Inaccuracies in planning are reported to be among the main reasons of a project's fiasco. Planning means making a variety of decisions. As these decisions refer to the future, so when faced with them, the decision maker has also to face uncertainty. The selection of a new project or a group of projects, as well as decisions how to implement them, involve prediction and comparison of future outcomes. In real world, not every possible future outcome is known with certainty. Thus, decisions made during the project planning process are usually based on past experience, either rationally or intuitively with some degree of uncertainty, and thus are made under risk. The aim of the paper is to present a simple, yet comprehensive, methodology for project planning that permits the consideration of both multiple criteria and risk. Our approach combines decision trees, simulation modelling and stochastic dominance rules. An example is presented to show the applicability of the procedure. It is based on the experiences of a company providing solutions for the railway industry.(original abstract)
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