A Fuzzy Approach for Risk Analysis with Application in Project Management

The Critical Path Method (CPM) and its development to probabilistic environment, the Program Evaluation and Review Technique (PERT), are the most common tools for predicting and managing different short time or long time projects. However, one of the main difficulties in using mathematical models in real world applications is the vagueness and uncertainty of data and parameters such as activity durations and risky conditions. The constructed network for project management (as a mathematical model) is an aid for control of project implementation with deterministic time durations. However, realization of this approach is difficult in the situation where most of activities will be executed for the first time. One solution offered for this difficulty is the assignment of probabilistic values for estimated durations of activities. In PERT, three estimations called pessimistic, most likely and optimistic values are assigned for each activity. Then the mean duration and its standard deviation are calculated by