Inderscience Publishers

Total cost management of interdependent projects

This paper develops a methodology based on Portfolio Analysis to select a configuration of interdependent projects. Several methodologies were developed to help selection of investment projects. These methodologies do not consider inter-project dependency. The decision to minimise some kind of costs in a project may have as consequence a very large cost for the whole system. This is particularly true for large projects as Energy Transmission and Generation, Roads, Railways, Airports, etc. To assess different options a combinatorial problem is formulated. Resolving this problem will lead to a viable solution which maximises the performance of the system and minimises risk. A case is simulated to show different performances and cash flows during projects development.

Keywords: total cost management, ABC system, cost function, interdependent projects

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