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Level: Advanced
TCM Section(s):
10.4. Project Historical Database Management
11.3. Information Management
Venue: 2021 AACE International Conference & Expo
Level: Advanced
TCM Section(s):
10.4. Project Historical Database Management
11.3. Information Management
Venue: 2021 AACE International Conference & Expo
Abstract: The
goal of this research is to understand more clearly the lifecycle costs of
supplier selection using methods of artificial intelligence (AI) with a total
cost of ownership (TCO) model to reduce uncertainty and make better decisions.
AI is a key technology for operations management and its usage is still in its
infancy. Few have successfully integrated AI methods into their operations and
across their supply chains but are recently starting to emerge. The research is
driven by the question of how to reduce uncertainty to provide better
information for selecting the right supplier. A case study is conducted at a
German automotive manufacturer based on three interlinked data sets. These
include:
For the last 50 years, AACE International and the project management community have made significant contributions to increase the maturity in the practice of project management and control. This continuous commitment applies to remain resilient in the era of data science. This study suggests practical ways to break down uncertainty into a measurable quantity. References are drawn from the Total Cost Management Framework and the applicability is discussed to other settings such as construction, aerospace, defense, and public procurement where considerable related research is conducted. The work confirms previous research that in particular regression trees and Bayesian optimization can reduce the uncertainty inherent in supplier selection more than previously utilized methods.
- Naïve algorithm models are evaluated as baselines for quality of cost prediction based on supplier selection nomination.
- Engineering and production changes are analyzed since they often lead to price increase.
- Cost breakdowns are considered, as they are applicable during several lifecycle phase.
For the last 50 years, AACE International and the project management community have made significant contributions to increase the maturity in the practice of project management and control. This continuous commitment applies to remain resilient in the era of data science. This study suggests practical ways to break down uncertainty into a measurable quantity. References are drawn from the Total Cost Management Framework and the applicability is discussed to other settings such as construction, aerospace, defense, and public procurement where considerable related research is conducted. The work confirms previous research that in particular regression trees and Bayesian optimization can reduce the uncertainty inherent in supplier selection more than previously utilized methods.