Understanding Project Performance with Stochastic Interruption

Abstract

It is becoming increasingly important to implement projects with care on environmental conditions. Some projects can be carried out only during the allowable season and interrupted during other seasons. Such a project interruption is expected to affect the quality of the project’s outcome through the decision-making of the stakeholders. This paper investigates the impact of interruption on the decision-making of the project owner and the contractor. We consider a project with some work after the interruption period (two-year project), the owner can select another option (one-year project) where all work is completed before the interruption period. If the fixed cost is higher relative to the benefit, our results show that the contractor prefers the one-year project, even when the owner selects the two-year project. We also represent the two threshold values of the interruption length that determine the owner’s selection and relative quality of outcomes, respectively. It was found that a range of interruption length where the selected project does not provide the higher quality outcome.