Time-cost project management with Solver

Abstract

According to the definition provided by the Project Management Institute the time and cost constitute two crucial elements of the project management (PM). There are many computer tools supporting the project time and cost management (e.g. SAS/OR Project Management, Primavera Cost Manager, Autotask Pro), but this software does not have all functionalities necessary in the project decision-making process. Therefore, the purpose of this paper is to spur teachers, students and managers to use optimization softwares such as the Excel Solver in the PM. This article deals with time-cost problems that project managers are trying to solve and presents the Excel Solver as an extremely useful tool in project management, optimization and simulation. After a discussion concerning the time-cost project analysis and the project network construction, the author demonstrates how to mathematically model and solve a project problem with the aid of the Excel Solver. At the end the results are interpreted. Benefits of using this optimization tool in project time-cost management are numerous. Solver is designed both for small and complex projects. It yields the optimal solution as well as many what-if-analysis results. Thus, the author demonstrates how the project manager can take advantage of the range information and dual values (reduced costs and shadow prices) to check the consequences of changing different project’s parameters and to set the intervals (e.g. for the unit shortening costs or the normal activity times) for which a given optimal schedule does not change. The author also argues that the Solver may successfully support the reactive and proactive project management, because in contradiction to traditional project management softwares, it easily generates brought up to date optimal solutions.