Risk reduction in a project portfolio
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The positive impacts of managing projects as a portfolio are quantified by comparing the value of the integrated risk of a project portfolio and the aggregation of single project risks implemented separately. Firstly, the integrated risk is defined by proposing risky events based on set theory. Secondly, as projects interact with each other in a project portfolio, the integrated risk is evaluated by using a Bayesian network structure learning algorithm to construct an interdependent network of risks. Finally, the integrated risk of a practical case is assessed using this method, and the results show that the proposed method is an effective tool for calculating the extent of risk reduction of implementing a project portfolio and identifying the most risky project, so as to assist companies in making comprehensive decisions in the phase of portfolio selection and portfolio controlling.
KeywordsProject portfolio integrated risk set theory Bayesian network risk assessment
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The authors are grateful to the anonymous referees who provided thoughtful comments and suggestions which improved the quality of their paper. This research was supported by the National Natural Science Foundation of China (Grant No. 71272049 & No. 71402142), Ph.D. Programs Foundation of the Ministry of Education of China (Grant No. 20126102110052), and Humanities, Social Science and Management Research Fund of Northwestern Polytechnical University (Grant No. 2014RW0008).
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