Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Improving project cost estimation by taking into account managerial flexibility
AU - Jørgensen, Trond
AU - Wallace, S W
PY - 2000/12/1
Y1 - 2000/12/1
N2 - Project costs tend to be higher than depicted by budgets. Irrespective of the quality of the project management, this indicates that the budgets are not established in a way which is consistent with how projects are run. Good budgets should on average lead to zero cost overruns. The purpose of this paper is to discuss how project costs (if they are based on models) can be better estimated by taking into account how projects are actually run, in particular, how managerial flexibility adds value to a project. The purpose is not to advocate better ways of running a project, but to obtain better estimates of what projects cost, given the way they are run.
AB - Project costs tend to be higher than depicted by budgets. Irrespective of the quality of the project management, this indicates that the budgets are not established in a way which is consistent with how projects are run. Good budgets should on average lead to zero cost overruns. The purpose of this paper is to discuss how project costs (if they are based on models) can be better estimated by taking into account how projects are actually run, in particular, how managerial flexibility adds value to a project. The purpose is not to advocate better ways of running a project, but to obtain better estimates of what projects cost, given the way they are run.
KW - Project management
KW - Time-cost trade-off
KW - Stochastic dynamic scheduling
U2 - 10.1016/S0377-2217(99)00484-1
DO - 10.1016/S0377-2217(99)00484-1
M3 - Journal article
VL - 127
SP - 239
EP - 251
JO - European Journal of Operational Research
JF - European Journal of Operational Research
SN - 0377-2217
IS - 2
ER -