A 2-LEVEL DECISION-MAKING MODEL FOR CONTROLLING STOCHASTIC PROJECTS

We consider projects with a high level of uncertainty comprising activ ities of random time duration and both random and deterministic altern ative outcomes in key nodes. A two-level control model is developed. O n the upper level decision-making centers on choosing an optimal outco me direction at every deterministic alternative node which is reached in the course of the project's realization. On the lower level (betwee n two adjacent decision-making nodes) the problem of controlling a pro ject is, in essence: (a) Calculating periodically and examining the pr obability of meeting the project's due date on time; (b) Redistributin g, if necessary, the project's budget among the activities to minimize the project's average remaining time duration. Heuristic procedures t o solve this stochastic optimization problem are presented. A numerica l example is given.