Activity Delay in Stochastic Project Networks

Arnold H. Buss and Meir J. Rosenblatt
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Arnold H. Buss: Naval Postgraduate School, Monterey, California
Meir J. Rosenblatt: Technion-Israel Institute of Technology, Haifa, Israel Washington University, St. Louis, Missouri

Operations Research, 1997, vol. 45, issue 1, 126-139

Abstract: In this paper we deal with a stochastic project network and consider the impact of activity delay to maximize the expected present value of a project. It is shown that in certain situations, delaying the onset of an activity from its earliest start time can indeed increase the present value of a project due to the postponing of associated negative cash flows. Furthermore, a project that could otherwise be rejected (negative expected present value) may become profitable (positive expected present value) due to delay. We demonstrate that even activities on the critical path, as determined by each activity's expected duration, may be profitably delayed. Optimal and approximate procedures are developed to determine the amount of delay of the various activities.

Keywords: project; management (search for similar items in EconPapers)
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:45:y:1997:i:1:p:126-139

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