A Real Option based Six Sigma project evaluation and selection model

Padhy, Ramakrushna; Sahu, Sumanta Kumar

doi:10.1016/j.ijproman.2011.01.011

Cited by 44 publications

(29 citation statements)

References 15 publications

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“…Ghapanchi, Tavana, Khakbaz, and Low (2012) use Fuzzy-DEA for project portfolio selection with uncertainties and project interactions. Padhy and Sahu (2011) use real options valuation and integer programming to select an optimal portfolio of Six Sigma projects subject to planning horizon, budget, and project interdependency constraints.…”

Section: Related Literaturementioning

confidence: 99%

Project Portfolio Selection: A Newsvendor Approach

Szmerekovsky

2016

Decision Sciences

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We consider the problem of balancing the penalties associated with budgetary slack (being underbudget) and cost overruns in the project portfolio selection problem by addressing randomness in project costs and making individual project budgets decision variables. Setting the budget for a single project is shown to be analogous to the newsvendor problem. For related versions of the project portfolio selection problem we provide optimal and heuristic procedures. Numerical experiments are used to test the procedures and provide managerial guidelines. We show project budgets should be set so that each project in the portfolio has the same probability of running over budget, it is better to have a larger number of projects with less than ideal funding compared to a smaller number of projects with ideal funding, and substantial opportunities to select more projects with a higher expected profit are available if an aggregate portfolio budget is used.

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Section: Related Literaturementioning

confidence: 99%

Project Portfolio Selection: A Newsvendor Approach

Szmerekovsky

2016

Decision Sciences

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“…The objectives correspond to important project criteria, such as rank, managerial labor needed, and average cost. Padhy and Sahu (2011) proposed a two-stage methodology based on (1) Real Option Analysis for evaluating the value of the project to improve the managerial flexibility (2) a zero-one integer linear programming model for selecting and scheduling an optimal project portfolio. This study contributes to managerial practices by identifying a new way of valuating the six-sigma projects through real option analysis by considering various kinds of risks.…”

Section: Introductionmentioning

confidence: 99%

An efficient risk based multi objective project selection approach considering environmental issues

Manavizadeh¹,

Malek²,

Reza³

et al. 2017

10.5267/j.uscm

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There are many researches on project selection field, but few of them have considered environmental criteria in their studies. Moreover, there are many articles in evaluating risk but there is no article that considers value at risk concept to evaluate the amount of risk in multi project selection. We propose a multi objective mathematical model to address a situation in which several projects are candidate to be invested completely or partially. Three objective functions are considered in this paper. The first objective maximizes sum of the net present value of pure cash flow obtained from selected projects. In this objective, we consider the factor of time and its impact on value of money. In addition, we use the concept of value at risk (VAR) as the present value for the first time in project selection problems. Although green projects are more interesting, there are few articles, which address environmental issues. Hence, we consider the objective, which are related to environmental issues as the final criterion. Multi-Objective Differential Evolution algorithm (MODE) algorithm is applied to solve a problem, which is known as robust and efficient algorithm. Then computational results are compared with solutions obtained by NSGA-II algorithm which is well-known algorithm in this field with respect to seven comparison metrics.Growing Science Ltd. All rights reserved. 7

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“…Project portfolio plays a noticeable role in the thorough success of the undertaken projects. Consequently, PPS can highly in uence the achievement to the goals of the organizations and is addressed in the category of project and engineering management as an active research topic [2]. PPS deals with the problem of how to select a nite number of projects amongst the extant alternatives while considering their contributions to the objectives of the organization as well as limitation of resources.…”

Section: Introductionmentioning

confidence: 99%

A novel project portfolio selection framework: An application of fuzzy DEMATEL and multi-choice goal programming

2016

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Project portfolio selection is an important problem for having an e cient and e ective project management. This paper proposes a new framework to identify the optimal project portfolio. First, the in uencing criteria are derived with respect to higher priorities from the fuzzy DEMATEL method under the balanced scorecard framework. Afterwards, a utility-based multi-choice goal programming technique is applied to determine the project portfolio in regard to the chosen criteria and some other operational limitations. The synergy amongst projects and the outsourcing option are also taken into account in order to provide a more realistic selection process. Finally, applicability and validity of the proposed integrated model are tested by a case study conducted in a pharmaceutical company.

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A Real Option based Six Sigma project evaluation and selection model

Cited by 44 publications

References 15 publications

Project Portfolio Selection: A Newsvendor Approach

Project Portfolio Selection: A Newsvendor Approach

An efficient risk based multi objective project selection approach considering environmental issues

A novel project portfolio selection framework: An application of fuzzy DEMATEL and multi-choice goal programming

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