Project Cost, Benefit and Risk Analysis using Bayesian Networks



Barbaros Yet1   Anthony Constantinou2      Norman Fenton2      Martin Neil2   Eike Luedeling3   Keith Shepherd3

1
  Department of Industrial Engineering, Hacettepe University, Turkey
2
  School of Electronic Engineering and Computer Science, Queen Mary University of London, UK
3
  World Agroforestry Centre, Kenya

                                                Abstract

                Uncertainty and risks are common elements of all major projects. Yet
                such uncertainty is rarely effectively calculated when analysing project
                costs and benefits. This paper presents a Bayesian network (BN)
                modelling framework to calculate the costs, benefits, and return on
                investment of a project over a specified time period, allowing for
                changing circumstances and trade-offs. The framework uses hybrid and
                dynamic BNs containing both discrete and continuous variables over
                multiple time stages. The BN calculates costs and benefits based on
                multiple causal factors including the effects of individual risk factors,
                budget deficits, and time value discounting. The method is illustrated
                using a case study of an agricultural development project.


                Keywords: Project Management, Project Risk Analysis, Bayesian
                Networks


                This paper is published as an abstract only.




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