Dependence Modeling for Large-scale Project Cost and Time Risk Assessment: Additive Risk Factor Approaches

High-dimensional dependence modeling remains a crucial challenge in quantitative project cost and time risk analysis. Building complete mathematically consistent correlation matrix becomes unrealistically restrictive as the number of uncertain performance units (i.e., activity times costs) increases, regardless using empirical data or with subjective judgment. This article presents pair additive factor models that provide analytic solutions to generation matrix. The (ARF) account for multiple factors two classes extra-marginal intramarginal) while providing additional flexibility strategic tradeoff between accuracy scalability high-dimensional risks. We extend ARF present an solution program evaluation review technique (PERT) problem correlated times. Numerical examples demonstrate computational efficiency approaches. approaches ARF-PERT would serve quick sensible alternative large-scale Monte Carlo simulation, particular during early stage life-cycle.