Hierarchical decision-making model for planning and controlling stochastic projects

Dimitri Golenko-Ginzburg, Aharon Gonik, Shmuel Kesler

Research output: Contribution to journalArticlepeer-review

12 Scopus citations


We will consider a three-level decision-making model for controlling stochastic network projects. The upper level (the company level) is faced with the problem of optimal budget allocation among several projects. We will consider network projects with random activity durations and alternative outcomes in key nodes. There are two different types of alternative events. The first one reflects stochastic (uncontrolled) branching of the project development. The alternative event of the second type is of a deterministic nature, i.e., the project's manager chooses the outcome direction. At the medium level (project level) the management determines on the basis of the available budget an optimal joint variant together with an optimal outcome direction at every decision node which is reached in the course of the project realization. At the subnetwork level the optimal joint variant is controlled by reallocating the remaining budget among the remaining activities to raise the confidence probability of meeting the project's due date on time. This paper is a further development of our current publications. The main goal of the paper is to develop a unified three-level decision-making model and to indicate planning and control actions and optimization problems for all levels. A numerical example is presented.

Original languageEnglish
Pages (from-to)39-54
Number of pages16
JournalInternational Journal of Production Economics
StatePublished - 1 Jan 1996


  • Activity network
  • Budget allocation
  • Confidence probability
  • Joint variant
  • Stochastic project

ASJC Scopus subject areas

  • Business, Management and Accounting (all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering


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