Project cash flow analysis in the presence of uncertainty in activity duration and cost

The inherent uncertainty and imprecision in project scheduling have motivated the proposal of several fuzzy set theory based extensions of activity network scheduling techniques. Building upon these, a cash flow calculationmethodology for projects including activitieswith fuzzy durations and/or costs is proposed in this paper. According to the proposed approach, the project cash flow is represented by an S-surface (as opposed to the traditional S-curve) ensuing by connecting S-curves at different risk possibility levels. Themethodology is exemplified by estimating the working capital requirements in a real world road construction project. Furthermore, the benefits of the methodology and its subsequent computerization are discussed. It is believed that the proposed approach may also be useful for both evaluating project proposals during feasibility studies and for performing earned value analysis for project monitoring and control. © 2011 Elsevier Ltd. and IPMA. All rights reserved.