| Many projects experience cost overruns. Lee (2008), based on his study of infrastructure projects in South Korea, found that among the causes of cost overruns are project delays and unreasonable estimation. One way to avoid a cost overrun is by developing a reliable project schedule during the planning stage of the project. One method of increasing schedule reliability is by allocating more resources to a project. However, this method is not particularly popular because practitioners think it will increase the overall project execution budget. The primary objective of this research is to show that increasing schedule reliability upfront, instead of increasing costs, may reduce the total overall cost of a project. The research is extended to consider the use of two techniques proposed by Miller (2003) and Offut et al. (2006) which are suggested as tools to improve schedule estimates, which in turn will yield better project schedule reliability and cost estimates. In this analysis, we explore the use of simulation-optimization, using an off the shelf tool, Opt Quest for Arena, to assist in determining the best resource allocation option for each task in a project. The relationship between cost and schedule reliability are studied and trade-off curves developed for the project's considered. Moreover, the effect of considering the use of the techniques by Miller (2003) and Offut et al. (2006) is investigated and assessed as to their ability to assist in developing more reliable schedules. |
