An integrated model for evaluation and optimisation of business project portfolios

Abstract

This paper presents an integrated model for the evaluation and probabilistic optimisation of project portfolios, integrating economic, social and environmental impacts analysis. The contribution of the proposed model lies in: 1) an extended list of criteria covering economic, social and environmental aspects; 2) use of financial measures, which are easily understood; 3) use of Monte Carlo simulation to cope with variability; 4) use of mathematical optimisation to deal with constraints and/or large amount of information. A practical test carried out in a company is reported and confirms the applicability and usefulness of the model. The integration of approaches for sustainable assessment of business projects and selection and optimisation of project portfolio is deficient in literature. Thereby, the proposed model is presented as an alternative to conduct integrated analysis and define optimal project portfolio for sustainable development in business contexts characterised by uncertainties. [Received: 26 October 2015; Revised: 26 August 2017; Revised: 1 March 2018; Accepted: 1 March 2018]