The Use of Cost and Time in Project Decision Trees: A model and an application

In this paper we present a useful bicriteria model for project analysis based on decision trees, and an application of the model to a production planning problem. We start by presenting a model that allows the use of time and cost in project analysis. This model is easy to use, and it can be applied to a large number of real-life situations when the main objectives are the minimisation of cost and the minimisation of time. The construction of the decision trees for this model may require large computational times, and thus become impracticable. We deal with this problem in two ways: first, we define an algorithm for generating the strategies, and then we introduce an error parameter, which allows us to avoid generating all the strategies that are very close to each other. Finally, we apply the model to a production planning problem. We define the problem, use the algorithm to identify the efficient strategies and analyse the results.