The combined impact of stochastic and correlated activity durations and design uncertainty on project plans

Most model based studies on project uncertainty investigate a single source of uncertainty, with a dominant focus on stochastic activity durations. However, another major uncertainty facing engineering projects is that of changes in design troughout the project delivery. This may come from uncertainty in the market, technology, or regulations, leading to changes in design and implementation paths, with alterations in the project network itself. This comes on top of stochastic and correlated activity durations for a given design. In this paper we develop a stochastic program to investigate how uncertainty in design and activity durations, together, affect planning, and their relationships. The findings suggest that when design uncertainty is modelled by multiple alternatives and delayed decisions on the final alternative, stochastic and correlated activity durations have limited impact. In situations with alternative and subtitutable solutions available for a given design, correlations drive a certain learning behaviour.

Automated summary

The study reveals that when modeling design uncertainty with multiple alternatives and delaying decisions on the final alternative, the impact of stochastic and correlated activity durations is limited. In situations where alternative and substitutable solutions are available for a given design, correlations drive certain learning behaviors.