An analytical model for budget allocation in risk prevention and risk protection
dc.contributor.author | Guan, Xin | |
dc.contributor.author | Servranckx, Tom | |
dc.contributor.author | Vanhoucke, Mario | |
dc.date.accessioned | 2021-09-22T09:15:46Z | |
dc.date.available | 2021-09-22T09:15:46Z | |
dc.date.issued | 2021 | en_US |
dc.identifier.issn | 0360-8352 | |
dc.identifier.doi | 10.1016/j.cie.2021.107657 | |
dc.identifier.uri | http://hdl.handle.net/20.500.12127/6970 | |
dc.description.abstract | Risk is inherent and inevitable during project execution. Its occurrence often has an adverse impact on the project or even leads to project failure. In order to ensure the successful project completion, risk prevention used for reducing the risk probability and risk protection used for reducing the risk loss should be considered. Given the different effects and costs of these two strategies and the limited project budget, project managers should be able to reasonably divide the budget among these two strategies. This study proposes a budget allocation method consisting of three modules for mitigating the project risks. First, we model the relation between the effect and cost of each strategy as linear and non-linear relations. Second, two mathematical models are built and the corresponding analytical solutions are obtained. Afterwards, a three-step procedure for budget allocation is proposed. To validate the analytical results and investigate the impacts of the characteristics of the project risk and response on the optimal budget allocation, numerical experiments are conducted and managerial insights are drawn. Finally, the budget allocation model is extended with multiple risks, secondary risk and risk transfer, and validated using an empirical analysis. | en_US |
dc.language.iso | en | en_US |
dc.publisher | Elsevier | en_US |
dc.subject | Budget Allocation | en_US |
dc.subject | Risk Prevention | en_US |
dc.subject | Risk Protection | en_US |
dc.subject | Analytical Solution | en_US |
dc.subject | Project Risk Management | en_US |
dc.title | An analytical model for budget allocation in risk prevention and risk protection | en_US |
dc.identifier.journal | Computers & Industrial Engineering | en_US |
dc.source.volume | 161 | en_US |
dc.source.issue | November | en_US |
dc.contributor.department | Faculty of Economics and Business Administration, Ghent University, Tweekerkenstraat 2, 9000 Ghent, Belgium | en_US |
dc.contributor.department | University College London, Canada Square 1, London E14 5AA, United Kingdom | en_US |
vlerick.knowledgedomain | Operations & Supply Chain Management | en_US |
vlerick.typearticle | Journal article with impact factor | en_US |
vlerick.vlerickdepartment | TOM | en_US |
dc.identifier.vperid | 58614 | en_US |