Title page for 89426012


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Student Number 89426012
Author Ching-I Shang(尚靜宜)
Author's Email Address shery813@ms22.hinet.net
Statistics This thesis had been viewed 2948 times. Download 1437 times.
Department Graduate Institute of Industrial Management
Year 2001
Semester 2
Degree Master
Type of Document Master's Thesis
Language English
Title System Dynamics in Project Risk Management:
Reallocating the Contingency Cost under the Project Scope Change
Date of Defense 2002-07-01
Page Count 70
Keyword
  • Contingency cost
  • Project scope
  • System dynamics
  • Abstract The fast changing environment and the complexity of projects has increased risk exposure. Traditional tools and technologies used in the process of risk management are not appropriate owning to its static analysis attribute. The project manager perceives the importance of taking prospective tools to face the challenge and keep the effort to control the project. This research proposes a project risk dynamics model to lead the project manager how to reallocate the contingency cost under the project scope change with a holistic view. By combining the process of risk management and system dynamics analysis in the project management, early signs of risk emergence, which would remain unperceived until problems would aggravate, can be identified in the project. Hence, the project manager can take better advantage offered by System Dynamics modeling, while enhancing the performance of the existing risk management process.
    Project scope change creates a series of effects and causes cost overruns that affect the schedule and lower performance in the long run. This research presents a risk dynamics framework that displays a trade-off process between cost and schedule and thereby attempts to revise the contingency cost and keep it under control. A pipeline work package is modeled and discussed.
    Table of Content Table of contents
    Chapter 1 Introduction1
    1.1 Background1
    1.2 Research Motivation2
    1.3 Research Objective3
    1.4 Research Method4
    1.5 Research Framework6
    Chapter 2 Literature Review8
    2.1 Project scope changes8
    2.1.1 Causes of Project Scope Changes8
    2.1.2 The Process of Scope Change Control10
    2.2 Contingency Cost10
    2.3 System Dynamics Method13
    2.3.1 Definitions of System Dynamics13
    2.3.2 The Negative and Positive Feedback Loop Structures14
    2.3.3 The Basic Principle of System Dynamics14
    2.3.4 System Dynamics Implementation Procedures16
    2.4 System Dynamics for Project Management17
    2.5 The SYDPIM Framework21
    2.6 Using SYDPIM to Manage Risk Dynamics within the PMBOK Framework21
    Chapter 3 Research Design24
    3.1 Conceptual Framework24
    3.2 Causal Loop Diagrams27
    3.3 Building The Risk Dynamic Model31
    Chapter 4 Modeling Pipeline Work Package32
    4.1 System Dynamic Tool-Stella32
    4.2 Case Background33
    4.3 Model Pipeline Work Package35
    4.4 Concrete Tests on Building Confidence39
    4.5 Model Validation and Calibration40
    4.6 Test the Impact of Policies49
    Chapter 5 Conclusions and Suggestions57
    5.1 Research Conclusions57
    5.2 Future Research Direction58
    Reference59
    Appendix: Equations of SD for pipeline work case62
    Figures
    Figure 1-1 Overview of the SYDPIM process logic5
    Figure 1-2 The framework of this thesis7
    Figure 2-1 A standard system dynamics flow diagram15
    Figure 2-2 Forester’s seven stage of implementation16
    Figure 2-3 Tao’s system dynamics approach17
    Figure 3-1 Overview of project management24
    Figure 3-2 The risk dynamics model framework25
    Figure 3-3 The rework cycle26
    Figure 3-4 Approved process to the scope change project29
    Figure 3-5 Adjustment process between cost and schedule trade-off30
    Figure 4-1 Model pipeline work package38
    Figure 4-2 Contingency cost on different level of scope change 42
    Figure 4-3 No change at each period (0% change)43
    Figure 4-4 100% change at the design phase and 0% at pipe work phase44
    Figure 4-5 Contents of contingency cost (100% at design phase and 0% at pipe work phase)44
    Figure 4-6 75% change at design phase and 20% change at pipe work phase47
    Figure 4-7 Contents of contingency cost (75% change at design phase and 20% at pipe work phase)47
    Figure 4-8 Change of overtime policy50
    Figure 4-9 Change workforce policy51
    Figure 4-10 Change of delivery way policy52
    Figure 4-11 Canceling of delivery way policy52
    Figure 4-12 Change of skipping on QA54
    Tables
    Table 2-1 Application of system dynamics to project management 19
    Table 4-1 Possible contingency items40
    Table 4-2 Contents of contingency cost data 42
    Table 4-3 100% at design phase and 0% at pipe work phase 45
    Table 4-4 Contents of each contingency cost item (100% at design phase and 0% at pipe work phase)45
    Table 4-5 75% at design phase and 20% at pipe work phase48
    Table 4-6 Contents of each contingency cost item (75% at design phase and 20% at pipe work phase)48
    Table 4-7 Change of overtime policy50
    Table 4-8 Change workforce policy51
    Table 4-9 Change of delivery way policy53
    Table 4-10 Canceling of delivery way policy53
    Table 4-11 Change of Skipping on QA55
    Reference Reference
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    2. Abdel-Hamed, T.K. and Madnick, SE Software Project Dynamics: An integrated Approach, Prentice-Hall, USA (1991)
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    4. Abdel-hamid, T.K., “A Multiproject Perspective of Single-project Dynamics,” 1993, Journal of Systems and Software, Vol. 22, pp.151-165
    5. Abdel-Hamed, T.K., “Thinking in Circles,” 1993, American Programmer, Vol. 6, pp.3-9
    6. Andrew, F., Modeling the Environment. An Introduction to System Dynamics Modeling of Environmental Systems, 1999, Island press, USA
    7. Aranda, R. R, Fiddaman, T and Oliva, R “Quality Microworlds: Modeling the Impact of Quality Initiative over the Software Product Life Cycle,”1993, American Programmer, Vol.6, Iss. 5, pp.52-61
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    10. Chichakly, K.J., “The Bifocal Vantage Point: Managing Software Projects from a Systems Thinking Perspectives,” 1993, American Programmer, vol.6, Iss.5, pp. 18-25
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    12. Cooper, K.G. & Mullen, T.W. ”Swords and Plowshares: The Rework Cycles of Defense and Commercial Software Development Projects,” American programmer, 1993,Vol. 6, No. 5, pp.41-51
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    15. Coyle, R.G., System Dynamics Modeling: A Practical Approach, 1994,UK: Chapman & Hall
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    19. Greenberger, Martin; Matthew; and Crissey, Brian. 1976. Models in the policy process. New York: Russell Sage Foundation.
    20. House, Peter, and McLeod, John. 1977. Large scale models for policy evaluation, New York: John Wiley.
    21. Humphreys, Kenneth, Project and Cost Engineers’ Handbook, NY: Marcel Dekker. 1987
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    24. Kerzner, H., Project Management: A Systems Approach to Planning, Scheduling and controlling, rev. edition, 2001,Canada: John Wiley & Sons
    25. Kuntson, Joan & Ira Bitz, Project Management, N.Y. AMACOM, 1991
    26. Lin, C. Y., “Walking on Battlefields: Tools for Strategic Software Management,”1993, American Programmer, Vol.6, Iss. 5, pp. 33-40
    27. Mantel, et, 2001, Project management in Practice, NY, John Wiley & Sons
    28. Project Management Institute (PMI) 2000. A guide to the Project Management Body of Knowledge, Project Management Institute, North Carolina.
    29. Pugh Roberts Associates-PA Consulting Group, PMMS-Program Management Modeling System Pugh Roberts Associates, USA (1993)
    30. Richardson, G. P. & Pugh, A.L., Introduction to system dynamics Modeling with Dynamo, 1981, MIT Press, USA
    31. Rodrigues, A.G., ”The Role of System Dynamics in Project Management: A  Comparative Analysis with Traditional Models,” 1994 International System Dynamics Conference Proceedings Lincoln Ma, USA, pp.214-225
    32. Rodrigues, A.G. & Bowers, J., ”The role of System Dynamics in Project Management,” International journal of Project Management, 1996, Vol. 14, No. 4, pp. 213-220
    33. Rodrigues, A.G.,”SYDPIM-A System Dynamics-based Project-management Integrated Methodology,” 1997 International System Dynamics conference: “Systems Approach to Learning and Education into the 21st century”. Istanbul, turkey, pp.439-442
    34. Rodrigues, A.G. & Williams, TM, “System Dynamics in Project Management: Assessing the Impacts of Client Behavior on Project Performance,” Journal of the Operational Research Society, 1998, Vol. 49, pp.2-15
    35. Rodrigues, A.G., “Managing and modeling Project Risk Dynamics: A System Dynamics-Based Framework,” The fourth European Project Management Conference, 2001
    36. Smith,B.J., Nguyen, H and Vidale, R.F. “Death of a Software Manager: How to Avoid Career Suicide through Dynamic Software Process modeling” 1993, American Programmer, Vol.3, Num.5, pp.10-17
    37. Stephen Ward, C., ”Assessing and Managing Important Risks,” International Journal of Project Management, 1999, Vol. 17, No. 6, pp. 331-336
    38. Wolstenholme, E.F. “System Enquiry-A System Dynamics Approach,” 1990, John Wiley and Sons, UK
    39. Williams, Terry et al, “The Effects of Design Changes and Delays on Project Costs,” Journal of the Operational Research Society, 1995, Vol. 46, pp.809-818
    Chinese literature
    1. 陶在樸, “系統動態學”, 五南出版社, 1999
    Advisor
  • Ching-chih Tseng(曾清枝)
  • Files
  • 89426012.pdf
  • approve immediately
    Date of Submission 2002-07-04

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