A Model of Uncertainty and Risk for Project Networks: MULTIMPACT

Nowadays, most important projects are studied by project network methods but, unfortunately, gaps and deviations between the theoretical results and the achieved ones tend to be systematically large. Traditionally modelling of uncertainty has been based on the assumption that the duration of each activity follows an independent random variable as it is the case of PERT. However, this model is too basic and does not cope with different types of uncertainty and with the complexity due to the network structure. The proposed approach in this paper is based on the concept of Impact Matrix relating multiple sources of uncertainty with network effects. The proposed impact matrix relates the following sources of uncertainty: 1 – Adverse exogenous conditions and other unforeseen difficulties 2 – Inadequate planning and design or change of requirements and design 3 – Need for additional work not included in the contract 4 – Overestimation of efficiency with effects expressed in terms of important attributes of the project such as cost, duration, safety and quality. The impact of each source in each objective can be defined through an indicator, Xi(j):