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InternationalJournalofProjectManagement32(2014)1042  1055
www.Elsevier.com/Locate/ijproman

Aneconomicprobabilisticmodelforprojectselection http://CROSSMARK
andprioritization
a,,ⁿ 1 a,2,3,4 b,5
CamilaCostaDutra ,JoséLuisDuarteRibeiro ,MarlyMonteirodeCarvalho
Un
UniversidadeFederaldoRioGrandedoSul,UFRGS,PortoAlegre,RS,Brasil
B
DepartamentofIndustrialEngineeringoftheUniversityofSãoPaulo,USP,Brasil

Received30July2013;receivedinrevisedform3December2013;accepted10December2013
Availableonline4February2014

Abstracto


Thispaperpresentsaneconomicprobabilisticmodelforprojectselectionandprioritizationthatenablesnecessaryinvestmentsandpotential
fi
benetsandtheirinherentvariabilitytobequantied, fi
thusprovidingastochasticanalysisofexpectedreturnsforprojects. Themodelwas
fi
developedinthreesteps:denitionofcriteria; fi
denitionofthemostappropriatemethodtobeused; andmodelbuilding.Apracticaltesttoevaluate
theapplicabilityandusefulnessofthemodelcomprisingaportfolioofinvestmentprojectsatapowerdistributioncompanywasconducted.Lla
fi
resultsshowthreemajorcontributionsoftheproposedmodel:i)asetofsufcientlycompletecriteria, II)thecombineduseofeconomicand
fi
probabilisticapproacheswhichqualiestheinformationavailabletodecisionmakers, fi whichismoreeasily
andiii)theuseofnanciallanguage,
understoodandhasaconcretemeaningforbothmanagementandtechnicalstaff.
©2013ElsevierLtd.APMandIPMA.Allrightsreserved.

Palabrasclave: 
Projectportfolio;Projectselection;Projectprioritization;Economicprobabilisticmodel

1.Introducción forinnovationandbetterresultsincompanies.Inthiscontext,
projectsareessentialtocreateeconomicvalueandcompeti-
Constantchangesintechnologyandmarketconditions, tiveadvantage.Sinembargo,potentialprojectshavetocompete
associatedwithmoredemandingcustomers,generateaquest forscarceresources,sinceusuallytherearenotsufficient
resourcestofundalloftheinvestmentsproposed.Porlotanto,
ⁿ Correspondingauthorat:Av.Bagé726/602,PortoAlegre,RS,90.460-080,
isvitaltoselectwhichprojectsshouldbeimplementedand
Brazil.Tel.:+555133722444.
whicharethepriorities.Inordertoensurethemaximumreturn
E-mailaddresses: [email protected](c.c.Dutra), forasetofselectedprojects,theselectionprocessshoulduse
[email protected](j.l.d.Ribeiro),[email protected] consistentcriteriaandrelatethemwiththeorganization
(M.M.DeCarvalho). businessstrategies(ArcherandGhasemzadeh,2007;Meade
1
fi
OfceAddress: Av. 
OsvaldoAranha, 99, 5to
andPresley, 2002).piso, PortoAlegre, RS,
90035-190,Brazil.Tel.:+555133083490.
2
fi
OfceAddress: Av. 
OsvaldoAranha, 99,
Becauseitisastrategicdecisionproblem,
5to piso,
elprocesode RS,
PortoAlegre,
90035-190,Brazil.Tel.:+555133084005.
selectionandprioritizationofprojectsiscomplex,
3
HomeAddress:Av.LuizManoelGonzaga,915/2,PortoAlegre,RS,zip
oftencharac-terizedbymultiplegoalswhichareconflictinganddifficultt
omedida.Inadición,theinformationavailabletodecisionmakers
Code90470-280,Brazil.Tel.:+555133305501.
4 (DMs)isusuallyincomplete,procesode
AssociatedProfessorattheIndustrialEngineeringGraduateProgram. thusaddinguncertaintiestothe.ForGorrod(2004)andHubbard
CoordinatoroftheLOPP  LaboratoryforOptimizationofProductand (2007),laincertidumbre
ProcessofEngineeringFaculty. associatedwiththecourseofactiongeneratesopportunitiesforloss
5
fi
OfceAddress: Av.ProfAlmeidaPrado,128,Travessa2,BlocoG,2°andar, ORGA,orvariationconcerningdesiredorplannedresults(Archer
CidadeUniversitária,SãoPaulo,SP05508-900,Brazil.Tel.:+551130915363.

0263-7863/$36.00©2013ElsevierLtd.APMandIPMA.Allrightsreserved.
http://DX.doi.org/10.1016/j.ijproman.2013.12.004

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Multilizer PDF Translator Free version - translation is limited to ~ 3 pages per translation.
C.c.Dutraetal./InternationalJournalofProjectManagement32(2014)10421055 1043

Emphasisofthe Selectioncriteria Referencias

Selección
Estratégica Competitividad DuarteandReis(2006),Eilatetal.(2008),Gunerietal.(2009),HenriksenandRostad(2010),Henriksenand
Ventajas Mejora Traynor(1999),Hsuetal.(2003),Kumaretal.(2007), #Pages
LeeandKim [13]
(2000),Liesioetal.(2007),Lochetal.
#Pages [13]
(2001),Mavrotasetal.(2006),Padovanietal.(2010),TohumcuandKarasakal (2010),Wangetal.(2005)
Strategicalignment #Pages [13]
Asoshehetal.(2010),CanezandGarfias(2006),Dickinsonetal. (2001),Eilatetal.(2008),Franco
andLord(2011),GhasemzadehandArcher(2000), #Pages [13]
HenriksenandTraynor (1999),Kumaretal.(2007),
MeadeandPresley(2002),Padovanietal.(2010), #Pages [13]
RabequiniJr. etal.(2005)
Intangiblebenefits #Pages
Asoshehetal.(2010),Avineri(2000), [13]
Badrietal. (2001),DuarteandReis(2006),Franco
andLord(2011),GhasemzadehandArcher #Pages [13] (2010),Padovanietal.(2008)
(2000),Gutjahretal.
Socialbenefits #Pages [13] (2008),Shangetal.(2004),
Dey(2006),Halouanietal.(2009),Hsuetal.(2003),RenandZhang
Wangetal(2005) #Pages [13]
Relación #Pages [13]
ChenandCheng (2009),DuarteandReis(2006),Eilatetal.(2008),MeadeandPresley(2002),
otherprojects Weietal.(2007) #Pages [13]
Meetingtheneeds #Pages [13]
Baietal.(2010),Eilatetal.(2008),JiangandKlein(1999),Lochetal.(2001),MeadeandPresley(2002),
deempleados Oraletal.(2001) #Pages [13]
Environmentalbenefits #Pages [13]
Dey(2006),Gunerietal.(2009),Halouanietal.(2009),MeadeandPresley(2002)
Politicalbenefits Greineretal.(2003),Hamilton(2002),#Pages [13]
Jolly(2003), Shangetal.(2004)
Reductionintheusageof #Pages [13]
Avineri(2000),Shangetal.(2004),Wangetal(2005),WeyandWu(2007)
naturalresources #Pages [13]
Learningandknowledge Baietal.(2010),Farrukhetal.(2000),LeeandKim(2000),YansandHsieh(2009)
Extendedbenefits #Pages
Coldricketal.(2005),Eilatetal.(2006), Wangetal[13]
(2005)
inotherprojects #Pages [13]
Employmentgeneration DuarteandReis(2006),Gunerietal.(2009),Mavrotasetal.(2006)
Reuseofparts #Pages
Avineri(2000),Shangetal.(2004), [13](2005)
Wangetal
Benefitstocommunity #Pages [13] (1988)
Eilatetal.(2006),Khorramshahgoletal.
Teammotivation #Pages
TohumcuandKarasakal [13]
(2010)
Recyclingofmaterials Avineri#Pages [14] (2004)
(2000),Shangetal.
BusinessbenefitsMarketpotential/Asoshehetal #Pagesde [13] ingresos. (2010), Bertolinietal. (
Garfias(2006),ChanandGarfias(2006),ChanandIp#Pages [13] (2009),ChenandCheng(2009),
(2010),ChenandAskin
#Pages
ChoandKwon [13]
(2004),Coldricketal.(2001),Eilatetal.(2008),Halouanietal.#Pages [13] (2002),
(2009),Hamilton
HenriksenandRostad(2010),HenriksenandTraynor #Pages [13]
(1999),JiangandKlein (1999),Jolly(2003),
Khorramshahgoletal.(1988),KimandEmery(2000), #Pages
Kumaretal. [13]
(2007),Kumaretal.(2009),LeeandKim
#Pages(2004),
(2001),LiangandLi(2008),Liesioetal.(2008),LinandHsieh [13]Lintonetal.(2002),Lochetal.(2001),
LochandBode-Greuel(2001),Mavrotasetal.(2006), #Pages [13] (2002),Medagliaetal.(2007),Padovani
MeadeandPresley
#Pages
etal.(2010),RabequiniJr.etal.(2005),Shangetal.(2004), [13]
StummerandHeidenberger (2003),Tohumcuand
Karasakal(2010),Wangetal.(2005),YangandHsieh #Pages
(2009) [13]
Overallbenefits Avineri(2000),Baietal.#Pages [13]
(2010),BüyüközkanandÖztürkcan (2010),CanezandGarfias(2006),
ChoandKwon(2004),Coldricketal.(2005),#Pages [13]Fangetal.(2008),
Eilatetal.(2006),
#Pages(2003),
GhasemzadehandArcher(2000),Greineretal. [13]Guoetal.(2008),Hsuetal.(2003),
JiangandKlein(1999),KlapkaandPiños#Pages [13] (2007),Kumaretal.(2009),
(2002),Kumaretal.
LiangandLi(2009),Padovanietal.(2010), #Pages [13]
RabequiniJr. etal.(2005),RenandZhang(2008),
SanthamamandKyparisis(1996),Schmidt#Pages [13] (2004),Wangetal(2005),
(1993),Shangetal.
Weietal.(2007,YangeHsieh(2009) #Pages [13]
Meetingcustomers'needs Asoshehetal.#Pages [13] (2001),Baietal.(2010),ChanandIp(2010),Eilatetal.(2008),
(2010),Badrietal.
#Pages
Greineretal.(2003),Gunerietal.(2009),Hamilton (2002),[13]
HenriksenandRostad(2010),
#Pages [13](2001),Mavrotasetal.(2008),
Kumaretal.(2007),Leeetal.(2008),LochandBode-Greuel
RabequiniJr.etal.(2005),ReneZhang(2008),#Pages [13]
TohumcuandKarasakal (2010),WeyandWu(2007)
Competitioninthe Hamilton(2002),Jolly(2003),LinandChen(2004),#Pages [13] (2002)
MeadeandPresley
projectarea #Pages [13]
Potentialforreplicability
Asoshehetal.(2010),Eilatetal.(2008)
orexpansion #Pages [13]
Técnicas Projectcomplexity Amiri(2010),Avineri(2000),Bertolinietal.(2006),Blauetal.(2004),Chien(2002),ChoandKwon(2004),
Dificultad #Pages(2006),
Codricketal.(2005),Dey(2006),Eilatetal.(2008),Farrisetal. [12]Gunerietal.(2009),
#Pages(2000),
JiangandKlein(1999),Leeetal.(2008),LeeandKim [13]Liesioetal.(2007),LinandChen(2004),
#Pages
Lochetal.(2001),Padovanietal.(2008),Padovanietal. [13]
(2010), RabequiniJr.etal.(2005),
RenandZhang(2008),TohumcuandKarasakal #Pages [13]
(2010), VermaandSinha(2002)
Timeinvolved Amiri(2010),Asoshehetal.(2010),#Pages [13]CanezandGarfias(2006),Dickinsonetal.(2001),Eilatet
Badrietal.(2001),
#Pages [12] (2006),GhasemzadehandArcher
al.(2008),Farrisetal. #Pages [13] #Pages [13]
(2000),Kumaretal.(2007),LochandBode-Greuel
#Pages [13]
(2001),TohumcuandKarasakal(2010),Weietal.(2007) #Pages [13]
Easeofimplementation #Pages
CheneCheng(2009),ChoeKwon [14]
(2004), Eilatetal.(2008),Farrukhetal.(2000),Hsuetal.(2003),
y Kumaretal.(2009),LinandHsieh(2004),MachachaandBhattacharya#Pages
#Pages [13] [13] (2008),
(2000),Padovanietal. #Pages [13]
Rabequini
#Pages
Jr.etal.(2005),RenandZhang(2008), [13]
TohumcuandKarasakal #Pages
(2010),Wangetal(2005),Weietal. (2007) [14]
#Pages [14] #Pages [14]
(continuedonnextpage)

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 Multilizer PDF Translator Free version - translation is limited to ~ 3 pages per translation.
1044 C.c.Dutraetal./InternationalJournalofProjectManagement32(2014)1042 1055

(Continuó )
Emphasisofthe Selectioncriteria Referencias
Selección
Degreeofinnovation DuarteandReis(2006),Farrukhetal.(2000),Hsuetal.(2003),Leeetal.(2008),LochandBode-Greuel(2001),
#Pages (2008),
Mavrotasetal. [13] Wangetal #Pages [13]
(2005),YangandHsieh (2009) #Pages [13]
Desalientan #Pages [14]
Coldricketal.(2005),Eilatetal.(2008),Greineretal.(2003),HenriksenandRostad(2010),MeadeandPresley
theregulatoryaspects #Pages [13] #Pages [13] #Pages [13]
(2002) #Pages [13]
Scopeoftheproject Amiri(2010),Jolly(2003)
Patentabilidad #Pages
Eilatetal. (2008),[12]
Lintonetal.(2002)
Financialcosts Totalinvestment Amiri(2010), #Pages [13]
Asoshehetal. (2010),Avineri(2000),Badrietal.(2001),Bertolinietal.(2006),Blauetal.(2004),
BüyüközkanandÖztürkcan(2010),ChenandAskin #Pages(2009),
[13]Chien(2002),Dickinsonetal.(2001),Eilatetal. #Pages [13]
(2008),Farrukhetal.(2000),FrancoandLord(2011),GhasemzadehandArcher(2000),Gunerietal.(2009),[13]
#Pages [13] #Pages [13] #Pages Guo
#Pages
etal.(2008), [13]
Gutjahretal. #Pages
(2010),Jolly(2003),KimandEmery [13]
(2000), #Pages [13]
KlapkaandPiños(2002),Kumaretal.
#Pages(2000),
(2009),LeeandKim [13]LeeandKim(2001),LiangandLi(2008), #Pages [13]
Liesioetal. (2007),Liesioetal.(2008), #Pages [13]
Lintonetal.(2002), #Pages [13] Mavrotasetal.(2008),
Lochetal.(2001), #Pages [14] (2002),
MeadeandPresley #Pages [14] (2007),
Medagliaetal. #Pages [14]
#Pages [14]
Oraletal.(2001),RabequiniJr.etal.(2005),SanthamamandKyparisis(1996),Schmidt(1993),Shangetal.
(2004),StummerandHeidenberger#Pages [14] (2005),TohumcuandKarasakal(2010),Weietal.
(2003),SunandMa #Pages [14]
(2007),
WeyandWu(2007) #Pages [14] #Pages [14] #Pages [14]
Uncertaintiesinvolved #Pages (2010),
Asoshehetal. [14] Badrietal.(2001),Bertolinietal.(2004),BüyüközkanandÖztürkcan(2010),ChanandIp
#Pages
(2010),Dickinsonetal.(2001), [13]
Eilatetal. (2006),Eilatetal.(2008),Fangetal.(2008),#Pages [13](2000), #Pages [13]
Farrukhetal.
FrancoandLord(2011),GhasemzadehandArcher #Pages [13]
(2000), #Pages [13]
Greineretal.(2003),Guoetal.(2008),Halouanietal.
#Pages [13] #Pages [13]
(2009),HenriksenandTraynor(1999),Hsuetal.(2003),JiangandKlein(1999),Khorramshahgoletal.(1988), #Pages [13]
#Pages
KlapkaandPiños (2002),[13]
Kumaretal.(2009), #Pages [13]LiangandLi
Leeetal.(2008), #Pages [13]
(2008), #Pages
LinandChen(2004), Loch [13]
#Pages [13]
andBode-Greuel #Pages
(2001),MeadeandPresley (2002),[13] #Pages
Padovanietal.(2010), [14]etal.(2005),
RabequiniJr. #Pages [14]
Schmidt
(1993),Shangetal.#Pages [14]
(2004),TohumcuandKarasakal (2010),Weietal.(2007) #Pages [14]
InvestmentinHR #Pages
Asoshehetal. [14] (2001),#Pages
(2010),Badrietal. [14]
Bertolinietal. #Pages
(2006),ChanandIp (2010), [14]
ChangandLee(2010),Eilat
etal.(2006),#Pages [13]Farrisetal.(2006),#Pages
Eilatetal.(2008), [13] #Pages
GhasemzadehandArcher [13] (2010),
(2000),Gutjahretal. #PagesJiang [13]
#Pages [13] #Pages [13] #Pages
andKlein(1999),KlapkaandPiños(2002),Kumaretal.(2007),LeeandKim(2001),Mavrotasetal.(2008), [13]
MeadeandPresley #Pages
(2002),[13]
StummerandHeidenberger(2003),TohumcuandKarasakal #Pages(2010),[13]Weietal.(2007),
#Pages
WeyandWu(2007),YangandHsieh(2009) [13] #Pages [14] #Pages [14]
Investmentininfrastructure Badrietal. #Pages [14]
(2001), ChanandIp (2010), ChangandLee (2010), Coldricketal.
(2005), Greineretal. (2003), #Pagesetal.
Guneri [13] (2009), Kumaretal.
#Pages [13] (2009), #Pages [13] #Pages [13]
SanthamamandKyparisis
(1996), WeyandWu
Investmentinsuppliers #Pages
(2007) [13]
Asoshehetal. (2010), #Pages [13]
ChenandCheng (2009), TohumcuandKarasakal
(2010), Weietal. (2007) #Pages [13] #Pages [13] #Pages [14] #Pages [14]
Investmentintechnology Amiri(2010),Eilatetal.(2008), Jolly(2003), LinandChen(2004), Weietal. (2007)
Investmentinmarketing Weietal.#Pages
(2007) [12] #Pages [13] #Pages [14] #Pages [14]
#Pages [14]
Figure1-Synthesisoftheliterature:projectselectioncriteria.

andGhasemzadeh,2007;MeadeandPresley,2002).Goldratt Ingeneral,evaluationcriteriaarenotpeculiartoanyparticular
#Pages [12]
(1997)whendiscussingthetheoryofconstraintsandcriticalchain projectselectionmethod.Mostmethodshavetheflexibility
recognizesuncertaintyasanimportantaspectofprojectmanage- tousedifferentsetsofcriteria.Theevaluationofaproposed
mentandsuggeststhatthestrategytomanageuncertaintycan projectbyconsideringthesamesetofcriteriaeliminatesunfair
determinethedifferencebetweenthesuccessandfailureofa competitionbetweenprojects,whichcanhappenwhentheseare
Proyecto. evaluatedagainsteachother,usingdifferentreasoningforeach
Tomakecorrectdecisionsregardingpotentialprojects,es Comparación.Toperformadirectcomparisonofdifferentprojects,
importantthatthereisacleardefinitionofthecriteriaand acommonmeasurementsystemneedstobeestablished(Castro
methodstobeusedtoprovidesupportforDMs.porotraparte, andCarvalho,2010;Cooperetal.,2000;Kerzner,2006;Martino
criteriaandmethodsforcompilingaportfolioshouldonlybe #Pages [13]
1995;MeredithandMantel,2008).
usedbycompaniesiftheyareeasilyunderstoodbymanage-mentdeci #Pages [13]
sionmakers(Kerzner,2006;Liesiöetal.,2007; Theuseofformalmethodsforprojectselectionincreases
MeredithandMantel,2008).Theliteraturepresentsanumber thechancesofsuccessinbusiness,elconducir,porejemplo,tobetter
#Pages [13] (Cooper
ofstudiesaddressingprojectselectionandprioritization
#Pages
etal.,2001; [13]
HenriksenandTraynor, 1999; salesresultsandhigherprofits.Thereisavarietyofmethods
MeadeandPresley,2002;Padovanietal.,2010;Pohetal., availableintheliteraturethatcanbeusedtoevaluateandselect
2001).Sinembargo,hay Proyectos.Sinembargo,thereisnoconsensusaboutwhichmethods
#Pages [13] Asaresult,cada
noconsensusonwhatcriteriashouldbeused. arethemosteffective.Además,thereislittleevidencein
#Pages [13]
organizationtendstochooseasetofcriteriaitdeemsthe más.Sin
embargo,thesetchosencanbeincompleteor theliteratureaboutthepracticaluseofthesemethods,sincemost
insufficienttosupportwell-foundeddecisions.Thewrongchoice arecomplexanddifficultfordecision-makerstounderstandand
ofdecisioncriteriacanleadtheorganizationtoafailurein uso,andrequire,insomecases,substantialinputdata.(Archer
attainingitsownandshareholders'strategicobjectives(Padovani andGhasemzadeh,2007;Cooperetal.,1999;Ghasemzadehand
etal.,2008). #Pages [12]
Archer,2000;HenriksenandTraynor,1999;Lawsonetal.,2006;
#Pages [12]
MeredithandMantel,2008; VerbanoandNosella,
#Pages [12] 2010).
#Pages [14] ExperiencesrelatedinapplicationsconductedbyLiesiöetal.
#Pages [14]
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 C.C.Dutraetal./InternationalJournalofProjectManagement32(2014)1042 –1055 1045

(2007)suggestthatsimpleandtransparentapproachesthat 2.1.Selectionofcriteria
considermultiplecriteria,eveniftheyaccommodateincomplete
information,aremorelikelytobeacceptedbybusinessdecision Thefirststepforselectingandprioritizingprojectstobe
makers,andtendtoproducebetterdecisions. includedintheportfolioistodecideonthecriteriathatshouldbe
Methodsforselectingandprioritizingprojectsfoundinthe usedforprojectevaluation.Inthisstepitisimportanttoensure
literaturecanbequalitativeand/orquantitative,andprocedures thatthesetofcriteriaiscomplete,buttoavoidsuperposition
varyfromsimplescreeningtosophisticatedmathematicalal- orhierarchyproblems.Toachievethis,asystematicreviewof
gorithms(Eilatetal.,2008).ThestudyofCooperetal.(2001) criteriaforprojectselectionwasconducted.73studiespublished
pointedoutwhichmethodsarethemostusedandwhichones between2000and2011,whichused35differentcriteriafor
aredominantinthedecision-makingprocess.Theirresults projectselection,wereselected. Fig.1presentsasummaryofthe
showedthatfinancialmethodsarethemostwidelyused,although criteriaconsidered.
itisnotusuallysuitabletousethemalone.Strengthsand
weaknesseswerediscussedforasetofprospectedmethods.In
manysituations,financialmethodspresentbetterresultsand,
whenusedinconjunctionwithothermethods,resultsareeven
better.Theypointedoutthatthebestarrangementstendto 2.2.Selectionofthemethod
useacombinationorahybridapproachtodefineaprojectportfolio.
Todefinethemethodtobeused,athoroughsearchinthe
literatureregardingapproachesemployedforselectingand
prioritizingprojectswascarriedout.Toidentifyandinvesti-
gatetheapproaches,intermsoftheiradvantagesandpractical
Severalauthorsstressthetendencyinorganizationsto limitations,asystematicreviewoftheliteratureonmethods
combinedifferentmethodstomeettherequirementsthatensure forevaluatingandselectingprojectswasconducted.71studies
successinselectionandprioritization.Theuseofanintegrated, publishedbetween2000and2011,whichused21different
user-friendly,interactivesystem,basedonacomputerdecision methodsforprojectassessmentandselectionwereinvestigated.
supportsystemisalsosuggested.Agenericandcomprehensive Toclassifythesemethods,theworkofVerbanoandNosella
modeltobeusedbyorganizationsinterestedinprojectportfolio (2010)wasused.So,threecategorieswereconsidered:quan-
managementmaywellplayakeyroleinthedissemination titative,qualitativeandhybrids(qualitative/quantitative).Quan-
ofmanagerialpractices(ArcherandGhasemzadeh,2007;Cooper titativemethodsusenumericinputdataandadoptprocedures,
etal.,1999;GhasemzadehandArcher,2000;Henriksenand suchasmathematicalalgorithms,besidesthecalculationof
Traynor,1999;Lawsonetal.,2006;MeredithandMantel,2008; economicorfinancialindices,toobtainquantitativeoutput
VerbanoandNosella,2010). data.Qualitativemethodsarethosethatuseonlyqualitative
dataandselectprojectsinadecision-makingprocesswhich
comparestheviewsofdifferentDMstoobtainqualitativeoutput
data.Thehybridclassificationwasconsideredformethodswhich
Afterconsideringtheissuesraisedintheliterature,this usequantitativeandqualitativeinputdataandobtainquantitative
–                   ,                                                        .                                             .                                                                      .
paperpresentsaneconomicprobabilisticmodelforproject outputdata.Fig.2presentsasummaryofthemethodsidentified
intheliterature.

Fortheselectionofthemethod,weaimedtomeetthe
mainfeaturessuggestedintheliteraturetoassureitspractical
Thenextsectionintroducesthemethodologicalprocedures. application.Theseare:)thepossibilityofincorporatingmultiple
i
TheproposedmodelispresentedinSection3.InSection4, criteria;)thepossibilityofconsideringuncertainties;
ii iii )how
resultsofapracticalapplicationofthemodelinapower easilymanagerialdecisionmakersunderstandit;and iv )the
distributioncompanyarepresentedanddiscussed.Finally,
Section5summarizesconclusions. abilitytomodifyoradjustitinresponsetochangesinthe
businessenvironment( ArcherandGhasemzadeh,2007;Liesiöet
al.,2007;MeredithandMantel,2008 ).Thepossibilityofusinga
hybridapproachwascarefullyanalyzed,sincetheliterature
2.Methodologicalprocedures foundthatthiscanbringaboutbetterresultswithregardto
meetingtherequirementsthatensurethesuccessoftheselection
Thispapercanbeclassifiedasappliedresearchsinceit andprioritizationprocess(Cooperetal.,1999,2001;Henriksen
seekstosolveaspecificproblem.Abibliographicalresearchand andTraynor,1999).
acasestudywereusedtosupportbuildingthemodelandtestingit. Thus,ahybridapproachinvolvingeconomicandproba-
bilisticprocedureswasselected.Theeconomicprocedures
Theconstructionofthemodelforprojectselectionand enableananalysisofrelativereturn,absolutereturnand
prioritizationwascarriedoutinfoursteps:(1)selectingcriteria; paybackperiodoftheprojectstobemade.Theeconomic
(2)selectingamethod,(3)proposingandimplementingthe approachisconsideredDM-friendly,sinceproceduresare
model,byintegratingcriteriaandmethodsgatheredfromthe relativelysimpleandtransparent,andresultsarecleartoall
literaturereview;and(4)testingtheproposedmodel.The involved.Inaddition,thebestprojectsareeasilyidentified
followingparagraphsdescribethesesteps. bycomparingcalculatedresultsandconsideringtheclasses
1046 C.C.Dutraetal./InternationalJournalofProjectManagement32(2014)1042 –1055

ofprojectsbeingassessed(ArcherandGhasemzadeh,1999; assumptions:itshouldincludemultiplecriteria;DMsshould
VerbanoandNosella,2010). finditeasytounderstandanduse;andtheinputdatarequired
Theprobabilisticapproach,inturn,enablesDMstounder- shouldbeeasytocollect.First,theevaluationframeworkwas
standtheextentofuncertaintyassociatedwiththecriteriaused developed,whichestablishestheinterfacewithDMs.Next,the
indecision-making.TheselectedmethodusesaMonteCarlo proceduresforevaluatingprojectsweredetailed.
simulationthatmakesitpossibletodealwithuncertaintyby
consideringtherelationshipsbetweeninputsandoutputs.The TomakeiteasyforDMstounderstandthecriteriaand
useofsimulationprovidestheDMnotonlywithprobabilistic evaluateprojects,adescriptionofthecriteriaselectedwas
informationaboutthereturnontheprojects,butalsoknowledge providedbasedonthestudiesfromtheliteraturefromwhichthey
abouttheviabilityoftheseestimates,therebyrevealingthe
expectedvalueofthefinancialreturnanditsdispersion.Both wereextracted.Next,thecriteriawereclassifiedasqualitative,
expectedvalueandvariabilityareimportantdecisionvectors whichincludeaspectsthatarenotdirectlyquantifiable,butwhich
forprojectselection( EvansandOlson,2002;Hubbard,2007; willhelpinsubsequentstages;andquantitative,whichinclude
MeredithandMantel,2008;Vose,2008;WoilerandMathias, aspectsrelatedtoinvestments(expenses)andbenefits.Classified
1996).Additionally,thecombinationofeconomicandprobabi-
criteriawerethendividedintothreemaingroups:)criteriafor
i
describingaproject;)criteriaforquantifyinginvestments;and
ii
iii)criteriaforquantifyingbenefits.Thislastgroupconsistsof
listicproceduresovercomesoneofthelimitationsidentifiedinthe criteriathataremoredifficulttoquantify,andtherefore,some
literature,whichindicatesthateconomicmethodsshouldnotbe qualitativecriteriahavebeenincludedtofacilitatequantification.
usedalone(Cooperetal.,2001). Sincethecriteriawereselectedfromseveralstudiesfound
intheliterature,thelistcontainingthe35criteriawaspresented
forreviewtosixprojectmanagementexperts.Thiswasdone
2.3.Integratingcriteriaandmethodsandimplementingthemodel toensurethatthecriterialistedaregenericfordifferent
companiesandtypesofprojectsandreflecttherealityof
Afterdefiningthecriteriaandmethod,modelbuildingwas portfoliomanagementincompanies.Also,theappropriateness
thenextstep,whichwasconductedconsideringthefollowing

Approach Method References

Qualitative BalancedScorecard(BSC) Asoshehetal.(2010);Baietal.(2010);ChanandIp(2010);Eilatetal.(2006);Eilatetal.(2008)
QualityFunction HenriksenandRostad(2010)
Deployment(QFD)
BubbleChart Blauetal.(2004);RabequiniJr.etal.(2005)
FuzzyLogic Amiri(2010);Avinerietal.(2000);Baietal.(2010);ChangandLee(2010);ChenandCheng(2009);Hsuetal.
(2003);MachachaandBhattacharya(2000);RenandZhang(2008);Weietal.(2007);YangandHsieh(2009)
DelphiMethod Khorramshahgoletal.(1988);LeeandKim(2001);StummerandHeidenberger(2003)
PrometheeMulti-Criteria Halouanietal.(2009);Mavrotasetal.(2006)
Method
TechnologicalRoadmap
Leeetal.(2008)
ScoreTechnique CañezandGarfias(2006);Coldricketal.(2005);Farrukhetal.(2000);FrancoeLord(2011);HenriksenandTraynor
(1999);Kumaretal.(2009);Mavrotasetal.(2008);StummerandHeidenberger(2003)
Multi-Attribute DuarteandReis(2006)
Utility
Theory(MAUT)
Hybrid DecisionTree LochandBode-Greuel(2001)
AnalyticHierarchy Amiri(2010);ChoandKwon(2004);Dey(2006);Greineretal.(2003);Hsuetal.(2003);Khorramshahgoletal.
Process(AHP) (1988);Kumaretal.(2009);Padovanietal.(2010)
AnalyticNetwork BüyüközkanandÖztürkcan(2010);Gunerietal.(2009);LeeandKim(2000);LeeandKim(2001);LiangandLi
Process(ANP) (2008);MeadeandPresley(2002);Shangetal.(2004);TohumcuandKarasakal(2010);WeyandWu(2007)
NeuralNetworks Baietal.(2010)
Quantitative DataEnvelopmentAnalysisAsoshehetal.(2010);ChangandLee(2010);Eilatetal.(2006);Eilatetal.(2008);Farrisetal.(2006);Kumaretal.
(DEA) (2007);Lintonetal.(2002);Oraletal.(2001);TohumcuandKarasakal(2010);VermaandSinha(2002)
Financialanalysis Blauetal.(2004);Coldricketal.(2005);Lintonetal.(2002);LochandBode-Greuel(2001)
Dynamicprogramming Kyparisisetal.(1996)
Integerprogramming ChenandAskin(2009);Dickinsonetal.(2001);Fangetal.(2008);GhasemzadehandArcher(2000);Greineretal.
(2003);KimandEmery(2000);Kyparisisetal.(1996);LeeandKim(2000);Liesioetal.(2007);LinandHsieh(2004);
Lochetal.(2001);Mavrotasetal.(2006);Mavrotasetal.(2008);Padovanietal.(2010);Schmidt(1993);Solaketal.
(2010);StummerandHeidenberger(2003);SunandMa(2005)
Linearprogramming ChangandLee(2010);Chien(2002);Gutjahretal.(2010);KlapkaandPiños(2002);LeeandKim(2001);Liesioetal.
(2008);WeyandWu(2007)
Non-linearprogramming Blauetal.(2004);Carazoetal.(2010);Guoetal.(2008);Gutjahretal.(2010);Kyparisisetal.(1996);Medagliaetal.
(2007);Padovanietal.(2010);SanthamamandKyparisis(1996)
Programmingbyobjectives Badrietal.(2001);Khorramshahgoletal.(1988)
MonteCarlosimulation
StummerandHeidenberger(2003)
Figure2:Synthesisofliterature:methodsofevaluationandselectionofprojects.
 C.C.Dutraetal./InternationalJournalofProjectManagement32(2014)1042 –1055 1047

Fig.3.Structureofselectioncriteriaforevaluationandprioritizationofprojects.

ofthenomenclature,descriptionandgroupingofcriteriawas Inordertodrawuptheassessmentprocedure,whichshould
verified.Forthistask,sixexperts(threeacademicsandthree quantifyinvestmentsandbenefitsandallowglobaleconomic
managersfromindustry)withdirectinvolvementinproject indicesforeachproject,(suchas:relativereturn,absolute
returnandpaybackperiod)tobebuiltup,allquantitative
portfoliomanagementwereconsulted. criteriamustbeexpressedonthesamebasis.Sincethecriteria
Theanalysisofthecriteriawascarriedoutduringface-to-face thatusuallydominateanalysis(projectedinvestmentsand
meetingswithfouroftheseexpertsandviaelectronicmedia potentialrevenues)areexpressedinmonetaryunits,wedecided
withtheremainingtwo,sincetheywereinotherregionsofthe tousethismetricforparameterization.Therefore,forthe
country.Theexperts'commentsweretranscribedinfulland evaluationofprojects,allquantitativecriteriaarepresented
analyzed.Then,somecriteriaweredeleted,somewereinserted intermsofPresentValue(PV).Somecriteriaclassifiedas
andsomewereregrouped.Changesweremadewhenobserva- quantitativearedifficulttomeasure,sincetheirnatureissubjective
tionsmadebymorethantwoexpertscoincided.Thenewlistthat andDMsdonotalwayshaveexperienceinevaluatingthem.This
wascompiledaftermakingimprovementstotheoriginalone istypicallythecaseforcriteriatodowithenvironmental,social
comprised37criteriaandispresentedin Fig.3.Qualitative andintangiblebenefits.Inthesecases,theassignmentofvalues
criteriaarehighlightedinlightgraywhilequantitativecriteria canbeperformedusingtheestimatedmagnitudeofthesecriteria.
referringtoinvestmentsandbenefitsareindarkgray.
1048 C.C.Dutraetal./InternationalJournalofProjectManagement32(2014)1042 –1055

Fig.4.Modelofevaluationandprioritizationofprojects.

Thiscanbeconsideredaformofweighting.Thiseffortisjustified Theaggregationofinvestmentandbenefitisgivenbythesum
sinceitallowsfortheuseofeconomicprocedures.Itisworth ofthestochasticvariables(quantitativecriteria)considered,
mentioningthat,insuchcases,generallytheamountsinvolvedare usingaMonteCarlosimulation.Theresultsaretheprobability
smallandserveonlyastie-breakercriteriaintheprioritization. distributionsforthetotalinvestmentinandthetotalbenefitofthe
Toimplementtheprobabilisticanalysis,eachofthequantita- project.
tivecriteriaisexpressedintheformofatriangulardistribution. Globaleconomicindicesoftheprojects,whichwillbe
Thisdistributionformwasselectedduetoitssimplicity.Therefore, usedforselectionandprioritization,arealsotheresultsofthe
theminimum,mostprobableandmaximummonetaryvaluesfor MonteCarlosimulation.Theabsolutereturniscalculatedas
eachcriterionareestimatedandtakeintoaccountuncertainties thedifferencebetweentotalinflowandtotalcosts,represented
involvedintheprojects.Additionally,valuesassigned,corre- astheirprobabilitydistributions.Positivevaluesindicatethat
spondingtoinvestmentsorbenefits,mustbedistributedovertime, theprojecthasabenefitgreaterthantheinvestment:thehigher
toallowthepaybackperiodoftheinvestmenttobecalculated. thisvalue,themoreattractivetheproject.
 C.C.Dutraetal./InternationalJournalofProjectManagement32(2014)1042 –1055 1049

Table1
Deterministicvaluesassignedtotheprojectsbyanalystsanddecisionmakers.
Quantitativecriteria Project1 Project2 Project3
Min. Prob. Max. Min. Prob. Max. Min. Prob. Max.
a
Investment Investmentininfrastructure 9150 11,150 13,500 2500 2800 3500 40 93 120
Investmentintechnology a – – – – – – – – –
InvestmentinHR a 1000 1050 1200 375 420 525 6 13.95 18
Investmentinsuppliers a – – – – – – – – –
a
Investmentinlogisticsanddistribution – – – – – – – – –
Investmentinmarketing a 4 6 8 –– – –– –
Benefit Increaseinrevenues a 11,200 11,300 11,480 2700 7000 10,000 1 2 4
Environmentalbenefit a – – – – – – – – –
Socialbenefit a 990 1000 1100 30 120 200 – 80 120
Intangiblebenefit a 3200 3250 3350 15 17 17.5 1.2 2.79 3.6
Extendedbenefitsinotherprojects a 120 150 180 25 55 70 –– –
a
ValuesexpressedinthousandsofBrazilianreais.

Similarly,relativereturnisestimatedbydividingtotalinflow Next,quantitativecriteriaareevaluated.Whenquantifying
bytotalcost.Valueslargerthan1indicatethatestimatedbenefits investments,sixcriteriawereconsideredandtheDMsestimate
accruingfromtheprojectarelargerthanestimatedinvestments, theirminimum,mostprobableandmaximummonetaryvalues,
thussignalingattractiveprojects.Thepaybackperiodtakesinto takingintoaccounttheprojectuncertaintiesinvolved.Addi-
accounthowinflowsandcostsaredistributedthroughtime. tionally,valuesassignedaredistributedovertime.
Followingtraditionalprocedures,thepaybackperiodisthe
timeittakesforbenefitstomatchtheinvestmentvalue.Next, Forthequantificationofbenefits,fivecriteriaareconsidered
theDMsinvolvedinprojectselectionarepresentedwithlists (direct,environmental,social,intangibleandextendedbenefits)
rankingalternativeprojectsinadescendingorderbasedon where,aswiththeinvestments,thegroupofDMsestimates
thesethreeindices. theirminimum,mostprobableandmaximummonetaryvalues,
whiletakingaccountoftheuncertaintiesinvolved.Thevalues
assignedarealsodistributedovertime.Thequantification
ofenvironmental,social,intangibleandextendedbenefitsis
facilitatedbyanalyzingthequalitativecriteria.Tounderstand
2.4.Testoftheproposedmodel theenvironmentalbenefit,fourqualitativecriteriaareconsid-
ered.Socialbenefitisassistedbytwoqualitativecriteria.
Intangiblebenefitissupportedbythreequalitativecriteria,
Afterconstructingthemodel,weconductedatesttoanalyze whereasonequalitativecriterionisconsideredsoastoreacha
itsapplicabilityandusefulness.Thetestwasperformedin betterunderstandingoftheextendedbenefit.
apowerdistributioncompanywhichhasaportfolioof120
investmentprojects.Theanalysisoftheprojectswasundertaken
oversixmeetingswiththeparticipationofateamofDMs.This
teamconsistedofeightpeoplefromdifferentareasofthe
organizationwhohadconsiderableknowledgeandthedata AMonteCarloSimulationisusedtoaggregatethetotal
neededtoevaluatedifferentcriteria. investmentandtotalbenefit.Usingthesimulation,thesumis
madeoftherespectivestochasticvariables(sixcriteriafor
investmentsandfivecriteriaforbenefit),representedbytheir
probabilitydistributions.

3.Proposedmodel Thenextactivityistocalculatetheglobaleconomicindices
(absolutereturn,relativereturnandpaybackperiod)whichis
TheproposedmodelispresentedinFig.4.Thefirstactivity alsoachievedbyusingaMonteCarlosimulation.Theresults
proposestheanalysisofsixteenqualitycriteriatoensurethat fromtheindicesareusedinthenextactivitywhichisabout
thereisenoughdiscussiononandunderstandingoftheproject rankingtheprojects.Inthisactivity,theDMsanalyzeliststhat
beforethequantificationstepsstart.Thediscussionmustbe ranktheprojectsindescendingorderbasedonthethreeindices
consolidatedasabriefdescriptionofeachcriterionintheform mentionedabove.Sinceresultsfromtheindicesarepresented
offreetext.Fromthisactivity,anenhancedunderstandingof asprobabilitydistributions,theaveragevalueorpercentiles
theproject,potentialcostsandbenefits,isachieved. maybeusedforranking,dependingonhowDMspreferto

Table2
Probabilisticvaluesoftheresultofinvestmentandtotalbenefitoftheprojects.
Result Project1 Project2 Project3
P1% Average P99% P1% Average P99% P1% Average P99%
a
Totalinvestment 10,856 12,694 14,619 3057 3447 3938 66 105 137
Totalbenefit a 15,622 15,773 15,944 3440 6750 9707 15 72 118
a
ValuesexpressedinthousandsofBrazilianreais.
1050 C.C.Dutraetal./InternationalJournalofProjectManagement32(2014)1042 –1055

Table3
Probabilisticvaluesofglobalindicesoftheprojects.
Projectindexes Project1 Project2 Project3
P1% Average P99% P1% Average P99% P1% Average P99%
–
Absolutereturn(benefitinvestment) a
1142 3079 4924 − 58 3303 6322 − 104 − 33 31
Relativereturn(benefit/investment) 1.08 1.25 1.45 0.98 1.96 2.94 0.13 0.70 1.4
a
ValuesexpressedinthousandsofBrazilianreais.

handleuncertainty.DMspresentingneutralprofilestendtouse prioritizingadozenITprojectsgearedtomaintainingthe
averagevalues,whileconservativeDMs,forinstance,may infrastructureoftheorganization.Whenprojectsintheportfolio
prefertousebelow-averagepercentilessuchasa25%absolute arehighlydivergent,e.g.,somebeingverybig,othersminiscule,
orrelativereturnindex.MoreaggressiveDMsmaypreferto someaddressingregulatoryrequirementswhileothersaddressing
selectprojectswithlargerestimatedreturnsevenifthoseare newventures,theapplicationoftheapproachismoredifficult.
subjecttomoreuncertainty,usingabove-averagepercentiles Nevertheless,itcanstillbeappliedsupportedbytherelative
forranking,forexample,the75%percentile. returnindex.
Whenrankingprojectsconsideringtheabsolutereturn,
theorganizationgivesprioritytoprojectsthatgeneratehigher
absoluteprofit(maximumprofit,evenifassociatedwith 4.Practicaltestoftheproposedmodel
higherrisk).Whensortingprojectsusingtherelativereturn,
theorganizationprioritizesinvestmentsthatwillcertainly
provideareturntotheorganization(maximumsecurity,even Totesttheproposedmodelasetof120projectswasanalyzed
ifassociatedwithlowerprofit).Theresultsofthepayback duringtwelvefour-hourmeetings,withtheparticipationofa
periodservetoprioritizeprojectsinscenariosinwhichthe
organizationneedsarapidreturnontheamountinvested teamofeightDMsfromdifferentareasoftheorganization
(maximumreturnintheshortterm). (theBoardofDirectors,andtheDepartmentsofFinance,
Engineering,Environment,andHumanResources).Ameeting
topresentthemodel,todefinethesetofprojectstobeanalyzed
TheDMsdefineacutoffpointintheindicesortheamountof andtosettheavailabletimeframewasheldpriortoimplementing
resourcesavailableintheorganizationforthenextperiodinorder themodel.Toillustratetheresultsoftheproposedmodel,the
toselecttheportfolioforthatperiod.Theprojectsthatprovidethe evaluationofthreeprojectswillbepresented.
bestresultsafterapplyingtheindicesshouldbeprioritized.
Duetoissuesregardingspaceandconfidentiality,the
Basedonfieldexperience,ittakesaboutanhourtoanalyze evaluationofqualitativecriteriawillnotbepresentedinthis
amedium-sizedproject.Thecalculationsperformedusinga paper.Thediscussionofthesecriteriahelpedmakeamore
MonteCarlosimulationareprogrammedonspreadsheetsand accurateassessmentofthequantitativecriteria.Thequantitative
arecomputedinafewseconds.
investmentcriteria,determinedbythegroupofDMs,were
Itisworthnotingthattheproposedmodelismostsuitable representedbytheirminimum,mostprobableandmaximum
forportfoliosofreasonablyhomogeneousprojects,wherethe monetaryvaluesandareshowninthelightgraycellsof Table1.
absolutereturnscanbeemployedasthekeyprioritization Thevaluesdeterminedforthequantitativecriteriaofbenefits
drive.Forexample,itcanbeemployedeffectivelywhen
appearinthedarkgraycells.

1,142 4,925
1.0% 98.0% 1.0%
4.5

4.0

3.5

3.0
Absolut Return
2.5
Mean3,079.33
Std Dev893.25
2.0 1%1,142.22
99%4,924.99

1.5

1.0

0.5

0.0

Fig.5.AbsolutereturndistributionforProject1.
 Fig.6.RelativereturndistributionforProject1.

Theaggregationofinvestmentandtotalbenefitwascarried TheanalysisofthesimulationresultsshowsthatProjects1
outconsideringthevaluespresentedin Table1.TheMonteCarlo and2presentpositiveabsolutereturnaveragevaluesandrelative
simulationforthethreeprojectsexemplifiedwasimplemented returnvaluesgreaterthan1,whichcharacterizeinteresting
using@Risk®software.However,duringthepracticaltest projectsfororganizations.Project3presentsanegativeabsolute
withthesetof120projects,thissimulationwasimplemented returnandarelativereturnlessthan1,whichislessinteresting
byprogramminginaspreadsheetusing thantheothers.
VisualBasicfor
ApplicationVBA( ).Table2presentstheprobabilisticresults: Figs.5to10showthatresultsobtainedfromProject1
averageand1%and99%percentilesfortotalinvestmentand presentsmallerdispersion,whichisalwaysinterestingforthe
totalbenefit. organization.Ontheotherhand,thedistributionofreturnfor
Project2presentsahigherdispersion,withthepossibilityof
Havingobtainedtheresultsoftotalinvestmentandtotal anegativeabsolutereturnandarelativereturnlessthan1.This
benefit,theglobalindicesoftheprojectswerecalculated. Table3 demonstratestheimportanceofassessingprobabilitydistribu-
showstheprobabilisticresults(averageand1%percentilesand tions,sinceanalystsandDMsevaluateonlyaveragevalues,
99%)oftheabsoluteandrelativereturnoftheprojects.The Project2wouldseemmoreinteresting.However,thereare
paybackperiodoftheprojectshasnovalueindicatedinthis moreuncertaintiesinvolvedinProject2,whichimpliesthat,
articleforreasonsofspace,sinceitwouldbenecessarytoshow dependingonthescenario,theprojectmaynotbeinteresting
thedistributionofvaluesoveraperiodof10years,thatbeing fortheorganization.
thetimeofanalysisdefinedbytheorganization.Thegraphics
withtheprobabilitydistributionsofthereturnonprojectsare
presentedinFigs.5to8.
Informationregardingtotalinvestment,totalbenefitsand
totalreturn,estimatedthroughtheMonteCarlosimulation,
1052 C.C.Dutraetal./InternationalJournalofProjectManagement32(2014)1042 –1055

Fig.8.RelativereturndistributionforProject2.

werepresentedintheformofcharacteristicvalues,comprising: onlyontheevaluationofthecriteria,sincetheresults,expressed
averageand1st,5th,25th,50th,75th,95thand99thpercentiles. intheformofaprobabilitydistributionwerecalculated
Thismakestheprobabilitydistributioneasiertonotice,even automaticallythroughtheimplementedmacro.
withoutthepresentationofthecorrespondinggraph. Thegroupofdecisionmakersfoundsomedifficultyin
Threelistsweregeneratedtoassisttheprioritizationperformed estimatingminimumandmaximumvaluesforsomeofthe
bytheanalystsandDMs,inwhichprojectswerearrangedin quantitativecriteria.Insuchsituations,thedescriptionofthe
descendingorderconsideringabsolutereturninthefirstlist, projectwasreviewed,andadeeperassessmentofuncertainties
relativereturninthesecondandthepaybackperiodinthe
lastlist.Ameetingwasheldtodefinetheindexandpercentiles involvedwasdeveloped,whichfacilitatedthequantification.
thatwillguidehowtodefinetheprojectportfolioforthenext Anotherwaytofacilitatedeterminingthesevalueswasforthe
period. expertstoindicateapercentageofvariationoverthemost
likelyvalue.Determiningvaluesinmonetaryunitsforthe
Thetimeneededtoanalyzeeachprojectpresentedconsider- environmental,socialandintangiblebenefitcriteriawas
ablevariation,namelyfrom15mintoacoupleofhours.The alsodifficult.ToassistDMs,parametersrelatedtothese
lengthiestoccurredduringtheanalysisofthefirstprojectofa criteriaweregatheredwithinthecompany,suchasthe
certainclass.Thetimeneededtoanalyzeotherprojectsofthe
sameclasswasconsiderablyreduced,sincemanyassessment amountpaidinenvironmentalfinesorfiguresconcerningthe
criteriaarehandledbythesamereasoning. socialandindustrialdevelopmentoftheregion.These
Theuseofspreadsheetswith parametershelpedtoquantifylesstangibleaspects.Despite
VBA programmingtocalculate thesedifficulties,inherenttoanyprocessforanalyzing
thetotalinvestment,totalbenefitandglobalindicesoftheproject complexprojects,DMs'generalperceptionwaspositive,
facilitatesthesetasks.Therefore,analystsandDMscouldfocus showingfullapprovalofthemodeldeveloped.Itwasobserved

Fig.9.AbsolutereturndistributionforProject3.
 C.C.Dutraetal./InternationalJournalofProjectManagement32(2014)1042 –1055 1053

Fig.10.RelativereturndistributionforProject3.

thatthetimeneededforanalysisandtheprecisionoftheanalysis stepsthatwillleadtotheselectingandprioritizingtheportfolio
dependontheknowledgeoftheappointedparticipants.Therefore, ofprojectsarefacilitated,sincethecriteriaareexpressed
itisimportanttoinvolveparticipantswhohaveexperienceand objectively,andsharethesameunit; iv )financiallanguageis
detailedinformationabouttheprojects.Thus,themodelisbeing moreeasilyunderstoodandhasaconcretemeaningforboth
implementedusingadedicatedsoftwareandshouldbeapplied managementandtechnicalstaff;)assigningminimum,most
v
intheorganization'sannualactivitiesassociatedwithproject probableandmaximummonetaryvaluesforeachofthe
evaluation. criteria,allowstheconsiderationofuncertaintyinthe
assessmentofprojects,whichDMsconsiderisimportant.It
5.Conclusions isworthmentioningthattheinabilitytoconsideruncertaintyis
oneofthelimitationsidentifiedbytheliteratureformostofthe
Thisarticlepresentedamodelforselectingandprioritizing techniquesandproceduresofprojectselection(Archerand
projects,builtfromqualitativeandquantitativecriteria.The Ghasemzadeh,1999;LinandChen,2004).
modelaimstoquantifyinvestmentsandbenefitsandtheir Amongthelimitationsoftheproposedmodelistheinability
possibleuncertainties,byprovidinganeconomicprobabilis- torecognizethedynamicnatureofportfolioprioritizationgiven
–.  , , G⁽,;.,;G,;H, ;.,;,;ffⁿ ⁾.- ., ,  ,  ⁽G,;., ⁾.
thatinevitablyprioritiesmaychangeovertimeandtheapproach
isessentiallyproject-centered,notconsideringthecontextof
programs.Wesuggesttheseresearchtopicsforfutureworks.
Wealsosuggesttheapplicationoftheeconomicprobabilistic
.–
 ,   

Acknowledgments

WethanktheCoordenaçãodeAperfeiçoamentodePessoalde
NívelSuperior(CAPES)andtheConselhoNacionaldePesquisa
eDesenvolvimento(CNPq)forprovidingresearchfellowships.
Wealsothankthecompanythatallowedfullaccesstothe
Theproposedmodelusesgenericcriteriaapplicabletomost informationneededtoconductthisstudy.
projectsandorganizations.Besides,whenevernecessary,new
criteria,specifictothetypeofprojectororganization,canbe
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