A study of cash flows in projects with fuzzy activity durations

In order to deal with imprecision inherent in the planning and scheduling of projects, various extensions of CPM (Critical Path Method) and PERT (Program Evaluation and Review Technique) have been proposed in the literature. The main aim of these studies has mainly been the application of Fuzzy Set Theory in the computation of activity start and completion dates, and consequently in the calculation of the project completion time, and of the critical path. As a step forward, this paper studies cash flows in project networks whose activity durations are represented with fuzzy numbers. The paper aims at formulating a methodology for generating cash flows based upon the fuzzy dates calculated with the algorithms found in the fuzzy scheduling literature. The main finding of this research indicates that in the presence of uncertainty, the shape of the fuzzy project cash flow curve varies considerably from the well-established cumulative cost curve (S-curve). Furthermore, the application of the proposed methodology in decision support software may prove useful in both the evaluation of project proposals (during feasibility studies) and the assessment of working capital requirements (in project execution).