An Assessment Method for Project Cash Flow under Interval-Valued Fuzzy Environment

Subject Areas : Strategy

Vahid Mohagheghi ¹ , SEYED meysam mousavi ² , Behnam Vahdani ³

1 - M.Sc. Student, Industrial Engineering Department, Faculty of Engineering, Shahed University, Tehran, Iran
2 - M.Sc. Student, Industrial Engineering Department, Faculty of Engineering, Shahed University, Tehran, Iran
3 - Assistant Professor, Faculty of Industrial & Mechanical Engineering, Qazvin Branch, Islamic Azad University, Qazvin, Iran

Received: 2015-10-06 Accepted : 2016-01-26 Published : 2017-04-01

Keywords: Cost forecasting, Project cash flow, Fuzzy project scheduling, Assessment method, Interval-valued fuzzy sets (IVFSs),

Abstract :

Effective project management requires reliable knowledge of cash required in different stages of project life cycle. Getting this knowledge is highly dependent on sophisticated consideration of project environment. Nature of projects and their environments are associated with uncertain conditions. In this paper, a new project cash flow assessment method based on project scheduling is proposed to foresee projects' cash flow in their different stages. Interval-valued fuzzy sets (IVFSs) are applied to address the uncertainty of activity durations and costs. First, an IVF-project scheduling method is proposed to calculate early start time and early finish time of activities under IVF-environment and based on that, a new method of cash flow assessment is introduced under IVF-environment. For the purpose of illustration, the proposed method is implemented to generate cash flow of main activities of a large-scale project. The results show the flexibility of presented assessment method in expressing uncertainty, in addition to its capability in risk evaluation. Furthermore, using alpha-cuts to address different levels of uncertainty and risk provides a comprehensive insight of the cash required in different stages of project life cycle under different levels of risk and uncertainty. Finally, the results are discussed and the proposed method is believed to be useful in the project evaluation.