Risk-Response Strategy Optimization Considering Limited Risk-Related Resource Allocation and Scheduling

Abstract

Effective handling of project risks is an important part of project risk management. Various methods have been proposed to determine the optimal set of risk-response actions (RRAs) to mitigate the project risks. However, few existing methods incorporate resource planning into their selected RRAs. This paper integrates the risk-response problem with the resource-constrained project scheduling problem (RCPSP) and presents a method for allocating and scheduling the limited risk-related (RR) resources to provide project managers with an effective and feasible project risk-response strategy. Based on the elaboration of the relationships between the risk, the RRA, and the RR resource, a mixed-integer optimization model is developed to obtain the optimal risk-response strategy and the consequent project scheduling. A full-factorial numerical experiment is conducted to validate the optimization model and investigate the effects of risk-response efficiency and risk severity on project make-span and total cost. In addition, a model comparison analysis is presented to highlight the necessity of incorporating resource planning. The computational results show that, as expected, resource utilization can be improved by incorporating allocation and scheduling in the risk-response procedure. Also, the study suggests that project managers should avoid RR resource consumption and cost increases caused by excessive risk response in specific circumstances.