=Paper= {{Paper |id=Vol-2851/paper5 |storemode=property |title=Breaking Risk the Integration Links between the Participants of Transport and Logistic Infrastructure Projects |pdfUrl=https://ceur-ws.org/Vol-2851/paper5.pdf |volume=Vol-2851 |authors=Sergiy Rudenko,Tetiana Kovtun,Tetiana Smokova |dblpUrl=https://dblp.org/rec/conf/itpm/RudenkoKS21 }} ==Breaking Risk the Integration Links between the Participants of Transport and Logistic Infrastructure Projects== https://ceur-ws.org/Vol-2851/paper5.pdf
Breaking Risk the Integration Links Between the Participants of
Transport and Logistic Infrastructure Projects
Sergiy Rudenkoa, Tetiana Kovtuna, Tetiana Smokovaa
a
    Odessa National Maritime University, 34, Mechnikova str., Odessa, 65029, Ukraine


                 Abstract
                 The object of the study is the risk of breaking the integration ties between the participants,
                 which arises in the projects of transport and logistics infrastructure. The specific features of
                 the concept of "integration project risks" are defined, which include the risks that may affect
                 the integration in the project and lead to disruption of the project as a system by breaking the
                 integration links between its participants.
                 One of the most problematic places is to identify integration risks in the pre-investment phase
                 of the project, in the process of qualitative and quantitative risk analysis. However,
                 integration risks are hardly taken into account when designing transport and logistics
                 infrastructure facilities. Particular attention is paid to logistical and project risks. Integration
                 risks combine the features of both logistics and project risks and can lead to negative
                 consequences for a project.
                 The study used qualitative risk analysis methods, namely Pareto analysis and ABC analysis,
                 which allowed the project participants to be divided into groups with large, medium and low
                 integration ties. Taking into account the number of transactions performed between the
                 participants made it possible to determine the power of integration links. The combination of
                 the results of the ABC analysis and the determination of the integration capacity is the basis
                 for the creation of a matrix of integration capacity of the project participants.
                 In the course of the work, a qualitative risk analysis was carried out according to the
                 proposed sequence of the project of creating a transport and logistics center. The use of
                 quality management tools and the integration capacity matrix developed by the authors made
                 it possible to identify the many project participants who have the greatest impact on project
                 integration.
                 The use of the proposed approach to qualitative risk analysis of the integration gap between
                 project participants at the beginning of the project will allow the identification of participants
                 with high integration capacity. The integration of these participants should be further
                 carefully analyzed, as the withdrawal of such a participant from the project can lead to
                 extremely negative consequences.

                 Keywords 1
                 project of transport and logistic infrastructure, integration of project participants, integration
                 risks, qualitative risk analysis, matrix of integration capacity of participants.

1. Introduction
    The development of the world economy is characterized by the constant expansion of economic
ties and international trade, which determines the priority of integration processes, first of all, in the
sphere of transport. The level of development of the transport industry of the country testifies to the
general state of its economy, since the transport-logistics system performs an integrative function for
other industries. It must meet the requirements of social production and national security, have an


Proceedings of the 2nd International Workshop IT Project Management (ITPM 2021), February 16-18, 2021, Slavsko, Lviv region, Ukraine
EMAIL: rudsv@i.ua (A. 1); teta.kovtun@gmail.com (A. 2); smokova.tm@gmail.com (A. 3)
ORCID: 0000-0002-1671-605X (A. 1); 0000-0002-5410-4783 (A. 2); 0000-0002-0688-5677 (A. 3)
            ©️ 2021 Copyright for this paper by its authors.
            Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
            CEUR Workshop Proceedings (CEUR-WS.org)
extensive infrastructure to provide the entire complex of transport and logistics services. This can be
achieved through the development of the country's transport and logistics infrastructure and the
creation of a network of modern transport and logistics centers (TLCs). The solution to this practical
problem requires the availability of modern methodological support, which will use modern
management methods, including tools for project management, risk management and quality
management. In addition, it is necessary to consider the features of the transport and logistic
infrastructure as a management object. A modern look at the process of creating a TLC is to present it
as a project, one of the specific features of which is the large number of participants involved in
integration ties. Analyzing these relationships will allow you to respond in a timely manner in the
event of a risk situation and to prevent negative consequences, almost until the project is terminated.
Therefore, the topical issue is to determine the features and develop a sequence of analysis of
integration risks in transport and logistics infrastructure projects.

2. The object and purpose of the study
    The object of the study is the risk of a break in the integration ties between the participants arising
in TLC creation projects. This risk relates to the integration risks of the project and may occur in
projects of transport and logistic infrastructure. The TLC creation projects are characterized by a large
number of participants and a high degree of integration. Not all project participants have an equal
impact on the project. The degree of influence of the participant on the integrity of the project
depends on the number and capacity of its integration links with other participants, that is, its
integration capacity. The main distinguishing feature of the risk of rupture of integration ties between
project participants is their impact on integration ties in the project, which can lead to negative
consequences, as well as to destruction of the system and termination of its existence. One of the most
problematic places is the lack of methodological support for the analysis of this risk category in TLC
projects. Scientists pay particular attention to project or logistical risks, without considering their
integrative nature.
    The purpose of the study is to determine the features and consistency of qualitative analysis of the
risk of integration ties between the participants of transport and logistic infrastructure. To achieve this
goal requires the following tasks:
    1. Identify the specific features of the risk of rupture of integration ties between the participants
of the project.
    2. Develop a sequence of qualitative risk analysis of the gap in integration ties between the
participants of the project.
    3. Carry out experimental calculations to determine the integration capacity of the participants in
the project.

3. Existing methods and solutions of the problem
    The study of integration risk management issues in TLC creation projects is based on the analysis
of previous research by scientists. Thus, the research of authors [1] is devoted to the management of
risks of functioning of transport and logistics systems, which belong to the category of logistical risks,
but they do not consider the risks specific to the objects of transport and logistics infrastructure. The
impact of logistical risks on improving the efficiency of enterprises, but without taking into account
industry affiliation, is investigated in [2]. The conceptual principles of logistics risk management at
the enterprise are explored in [3]. The authors highlight the risks of the enterprise logistics system, but
do not take into account the integration of its elements. Therefore, the above studies of logistics risks
do not take into account their integrative nature, do not study the design risks of creating logistics
systems. Design risks are considered and their classification is made in [4]. Among the large number
of project risks, the authors do not single out integration risks in a separate group, which reduces the
completeness of identification of the possible risks in the project. the issues of risk management are
studied with emphasis on the field of project activity implementation. The issues of project risk
analysis are highlighted in [10], which identifies the advantages and disadvantages of existing
methods of risk analysis and assessment. Emphasis is placed on quantitative risk analysis, the issues
of qualitative analysis of project risks are not considered. Therefore, it can be concluded that the issue
of studying integration risks in projects, taking into account the features of transport and logistics
infrastructure objects, is almost ignored. Successful implementation of such large-scale and complex
projects as the TLC creation project requires the availability of appropriate methodological support,
which will allow to take into account the features of the created objects. The large number of TLC
project participants causes integration project risks, which can lead to very negative consequences,
even if the project is completely closed. In [11] the authors distinguished the project integration risks
into a separate category, in [12] proposed a methodological approach to integrating risk analysis in the
TLC creation project, and in [13] emphasized on a qualitative risk analysis. Therefore, this issue
needs further study, taking into account aspects of current management methodologies [14,15] and the
specific features of the research object - the TLC project.

4. The results of the study
    Integration risks fall into the category of risks that can be catastrophic for the project - a break in
integration links can lead to the destruction of the entire system. the focus on them is justified as they
affect the viability of the project. When considering integration risks through the lens of integration in
a TLC project, one of the most important integration risks of the project is the risk of a break in
integration ties between project participants. The classification features of this type of risk according
to the existing categories of classification of objects from the biological approach (class, type, type)
are presented in fig. 1.


                  Risk class - project risk




                                       Type of risks - integration risk




                                                               Type of risks - the risk of breaking
                                                          integration ties between project participants


Figure 1: Classification signs of risk of rupture of integration ties between project participants

    This type of risk is inherent in all project participants, but its implications for the project depend
on which group the participants belong to - major or minor. Catastrophic consequences can occur if
the integration links between the main participant (investor, customer, general contractor, etc.) and
other project participants till the termination of the project [2]. When it comes to minor participants,
the consequences of integration risks may not be as significant for the project. In this case, a
preliminary risk analysis helps to influence the situation and preserve the integrity of the project as a
system. Integration in creation of TLC projects also has an appropriate classification (system, design,
transport and logistics), which is described in detail in [4]. Combining the peculiarities of the project
integration of project participants, the selection of secondary project participants gives rise to the
concept of risk of rupture of integration links between project participants (Fig. 2).
Figure 2: The risk of a break of integration links

    Integration risk management involves such processes as: risk management planning, risk
identification, qualitative risk analysis, quantitative risk analysis, risk response planning, risk response
implementation, risk monitoring [16–29].
Particular attention should be paid to risk analysis. At the stage of qualitative analysis, it is necessary
to identify the sources of possible integration risks of the project, that is, to identify those project
participants, whose actions may lead to disruption of integration ties in the project. For this purpose it
is proposed to use quality management methods, namely: Pareto analysis, ABC analysis, as well as
the matrix of integration capacity. A qualitative analysis of integration risks, which is to determine
the integration capacity of project participants, is proposed in three steps:
First step. Separation of minor project participants into groups according to the number of their
integration ties with other partners.
Second step. Determine the integration capabilities of the project participants.
Third step. Determine the integration capacity of project participants.
The proposed sequence of analysis of the integration risks of the TLTC project allows, in the absence
of reliable information about the project implementation conditions:
    • identify the elements of the project participants most prone to integration risks;
    • determine the integration capacity of project participant;
    • the degree of impact on the sustainability of the project system.
The study of the proposed sequence of qualitative analysis will be carried out on the example of a
project for the creation of a TLC, which includes 30 minor participants (partners) in the operational
phase.
First step. Separation of minor project participants into groups according to the number of their
integration ties with other partners.
The Pareto analysis is proposed to identify participants' propensity to integrate risks. The input for
the analysis is the set of integration links between the project participants, and the output is a Pareto
diagram.
 A qualitative analysis of project integration risks using a Pareto diagram consists of the following
steps:
   • creating a contiguity matrix that reflects the presence (1) or the absence (0) of integration
       relations between the elements;
   • analysis of the significance of the obtained results, which is reflected in the table of aggregated
       data;
   • construction of the Pareto diagram;
   • carrying out the ABC analysis of project participants.
Participants have integration links as shown in Fig. 3.




Figure 3: Integration links of the participants

Analysis of integration links between project participants is possible to carry out the following
indicators:
   • the number of connections of this element with other elements of the system;
   • % of the connections of this element with other elements in the total number of integration
        links between system elements, which is presented in Table 1.

Table 1
Aggregated data for element integration links (partners, project participants)
     Project            Number of          The cumulative
   participant       integration links       sum of the        % of integration
                                                                                        Cumulative %
                                             number of            links in total
                                          integration links
         10                   25                   25                  5,18 %                5,18 %
          9                   24                   49                  4,97 %                10,14 %
         15                   24                   73                  4,97 %                15,11 %
         14                   23                   96                  4,76 %                19,88 %
         11                   21                  117                  4,35 %                24,22 %
         12                   21                  138                  4,35 %                28,57 %
         13                    21                  159                 4,35 %         32,92 %
         17                    21                  180                 4,35 %         37,27 %
          5                    20                  200                 4,14 %         41,41 %
         19                    19                  219                 3,93 %         45,34 %
          3                    18                  237                 3,73 %         49,07 %
          1                    18                  255                 3,73 %         52,80 %
         18                    18                  273                 3,73 %         56,52 %
          2                    17                  290                 3,52 %         60,04 %
         16                    17                  307                 3,52 %         63,56 %
          4                    16                  323                 3,31 %         66,87 %
         21                    16                  339                 3,31 %         70,19 %
         22                    16                  355                 3,31 %         73,50 %
         30                    15                  370                 3,11 %         76,60 %
          8                    14                  384                 2,90 %         79,50 %
         25                    13                  397                 2,69 %         82,19 %
         29                    13                  410                 2,69 %         84,89 %
          7                    11                  421                 2,28 %         87,16 %
         20                    11                  432                 2,28 %         89,44 %
         26                    10                  442                 2,07 %         91,51 %
          6                     9                  451                 1,86 %         93,37 %
         27                     9                  460                 1,86 %         95,24 %
         23                     8                  468                 1,66 %         96,89 %
         24                     8                  476                 1,66 %         98,55 %
         28                     7                  483                 1,45 %         100,00 %

We build a Pareto diagram of partner integration relationships. On the abscissa axis, we place the
elements according to the degree of integration integration, and along the ordinate axis - the
percentage of integration relations of the elements in the total and the cumulative percentage of
integration relations (Fig. 4).




Figure 4: Pareto diagram of the integration links of the project participants
The use of ABC analysis allows to identify the project participants who have the highest number of
integration ties (Fig. 5).




Figure 5: ABC analysis of project participants

It is determined that the group "A" with the largest number of integration links includes elements:
"10", "9", "15", "14", "11", "12", "13", "17" , "5", "19", "3", "1", "18", "2", "16", "4", "21", "22". The
largest number of integration links (25) is observed in the element "10" - 3PL operator. But this kind
of estimation is not enough because the system element can have a large number of integration links,
and the power of these connections may be negligible.
The second step. Determining the integration capacities of project participants.
We propose to determine the power of the integration link taking into account the number of realized
relationships (transactions) using this connection and the cash flow (cost) of the respective operations.
An example of calculating the value of the number of operations for 6 months for the element "10" is
presented in Table 2.

Table 2
Number of integration operations of element "10" – 3PL operator
                                      Time period, month                                 Total units
  Connection
                   1          2           3          4          5               6
     10–1          3          5           7          9         10              14              48
     10–2          2          4           3          6          5               8              28
     10–3          3          5           6          8          9              11              42
     10–4          4          6           8         10          9               6              43
     10–5          8          9          12         10         11              12              62
     10–6          10         9          12         15         14              14              74
     10–7          11         14         15         14         15              15              84
     10–8          11         14         15         10         12              14              76
     10–9          12         10         13         15         14              13              77
     10–11         3          2           2          4          6               5              22
     10–12         2          3           1          4          2               2              14
     10–13         4          6           8          7          5               7              37
     10–14         5          8          10         12         10              13              58
     10–15         7          9           9         10         12              14              61
     10–16          4           3               6                         5     4          4       26
     10–17          3           5               4                         2     3          4       21
     10–18          2           1               3                         2     4          3       15
     10–19          9           10             11                        10     9         12       61
     10–20          2           1               4                         3     5          4       19
     10–21          8           10             12                        11    10         13       64
     10–22          3           2               5                         4     3          3       20
     10–24          2           1               3                         4     3          4       17
     10–26          4           3               5                         4     3          6       25
     10–29          3           2               1                         2     3          4       15
     10–30          1           2               1                         3     4          3       14

But for the sake of completeness of the importance of this or that integration connection we suggest to
consider not only the number but also the cost of the performed operations. Their output will
determine the cash flows between the elements of the system that create the integration link. This will
allow you to determine the amount of work done on a system that matches a particular integration
link:
                                      С F = q c ,
                                          ij          ij            ij
                                                                                                (1)
where СFij- cash flows moving from the i-th to the j-th element between which the integration link is
established;
qij – number of operations between i-th and j-th elements;
cij– the average cost of one operation between the i-th and j-th elements.
To determine the power of the integration link between system elements - TCP project participants -
we apply the formula:
                                              СF                                              (2)
                                      N ij =               ij
                                                                ,
                                                    t ij
where tij– time spent performing operations between i-th and j-th elements.
Based on the obtained values of the power of integration links, it is possible to determine their rating
(Table 3).

Table 3
Power of integration links of element "10" - 3PL operator
                                          The average cost                                     Connection
                         Number of
   Connection                            of one operation,                    Cash flow, usd     power,
                     operations, units
                                                 usd                                           usd/month
        10–1                   48                 1800                               86400         14400
        10–2                   28                 5280                              147840         24640
        10–3                   42                 2200                               92400         15400
        10–4                   43                 3600                              154800         25800
        10–5                   62                 10000                             620000        103333
        10–6                   74                 1500                              111000         18500
        10–7                   84                 13000                             1092000       182000
        10–8                   76                 3700                              281200         46867
        10–9                   77                 1000                               77000         12833
        10–11                  22                 1500                               33000         5500
        10–12                  14                 5000                               70000         11667
        10–13                  37                 84000                             3108000       518000
        10–14                  58                100000                             5800000       966667
        10–15                  61                  200                               12200         2033
        10–16                  26                 2000                               52000         8667
       10–17                  21                  400                  8400                 1400
       10–18                  15                  1000                 15000                2500
       10–19                  61                  4000                244000                40667
       10–20                  19                  350                  6650                 1108
       10–21                  64                  1000                 64000                10667
       10–22                  20                  600                  12000                2000
       10–24                  17                  120                  2040                  340
       10–26                  25                  200                  5000                  833
       10–29                  15                  1000                 15000                2500
       10–30                  14                  700                  9800                 1633

The most powerful link is the "10" and "14" elements (3PL Operator - Cargo Terminal). It is possible
to determine the total power of all element integration links by the formula:

                                        m
                                              ____                                            (3)
                                N i =  N ij  i = 1,n  .
                                      j =1            
Thus, the total integration power of element "10" is 2019955 usd / month. If you carry out a similar
assessment for other elements of the system, it is possible to determine the rating and the total
integration power for each project participant and to determine the integration capacity of the project
participants (Table 4).

Table 4
Power of integration links of project participants
                                       Total power connection of      Rating ofpower connection of
  Element (project participant)
                                                element                         element
               10                               2019955                             5
                9                               2155880                             4
               15                                 7500                             27
               14                               809390                             10
               11                               1781067                            20
               12                               363641                             16
               13                              23364348                             1
               17                               282073                             17
                5                               2669525                             3
               19                               491350                             12
                3                               1060741                             7
                1                               412646                             14
               18                                59480                             24
                2                               376049                             15
               16                               212883                             19
                4                               1017380                             8
               21                              12085147                             2
               22                                 9763                             26
               30                               687000                             11
                8                               129748                             21
               25                               942717                              9
               29                               1757727                             6
                7                               453683                             13
               20                                 1808                             30
               26                                 2400                             29
                6                               226423                             18
                27                               86595                                23
                23                              18175                                 25
                24                              6927,5                                28
                28                              108230                                22

Based on the results obtained, a management decision should be made to manage the integration risks
in the project.
Third step. Assessment of integration capacity of project participants. To determine the integration
capacity of project participants, it is proposed to use an integration capacity matrix. The ordinates of
the ordinates determine the power rating of the integration links of elements (1–10 - significant
power, 11–20 - average power, 21–30 - insignificant power). The ordinate axis defines the zones of
ABC analysis that reflect the number of integration links of participants (group A is large, group B is
medium, group C is insignificant) (Table 5).

Table 5
Matrix of integration capacity
                                               The importance of project participants
  Connection power                               (by number of integration links)
                                   Group A                  Group B                   Group C
        significant                  high                     high                     high
         average                     high                   average                     low
       insignificant               average                    low                       low

For an example of a TLC project, the integration capacity matrix is presented in Fig. 6.




Figure 6: Matrix of integration capacity of participants of the project of transport and logistics center
The Integration capacity matrix allows the project participants to be divided into areas of high,
medium and low integration capacity of the participant. Depending on which area of the matrix a
particular project participant falls in, it is possible to determine its integration capacity, that is, the
degree of influence on the stability of integration ties between project participants.

5. Conclusions
    The specific features of the risk of the break of integration ties between TCP participants are
identified, which include the risks that may affect the integration in the project and lead to disruption
of the project as a system. That is, this category of risks arose at the intersection of concepts such as
project integration and project participants. The classification features of this type of risk are
determined according to the existing categories of classification of objects from the biological
approach (class, type, type). A sequence of qualitative risk analysis of the TLC creation project has
been developed, which includes three steps. A matrix of integration capacity of project participants
was created using the results obtained in the previous stages of risk analysis. Based on the data
obtained from the ABC analysis and determination of the integration capacity of the project
participants, the matrix is divided into three zones of integration capacity: high, medium and low.
Experimental calculations of a qualitative analysis of the risks of the break of integration ties between
project participants were carried out using the example of a TLC, consisting of 30 participants. The
participants of the project of creation of TLCs by zones of matrix of integration capacity are
distributed and their tendency to influence of integration risks is determined. The area of high
integration capacity has been reached participants, who should be further analyzed for individual
integration links and identify the causes of the risks of their break.

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