Project selection and resource allocation in the portfolio of business projects: a review of the scientific literature

Abstract

Current economic conditions and competitive environment have forced most of the organizations to apply the project portfolio management. Due to this reasons, selection of profitable pro-jects and optimal allocation of available resources among the selected projects have become particularly important. Wrong choice of projects has two negative consequences. Firstly, the resources are used for inexpedient projects. Secondly, the organization loses a chance to make a profit, if such resources can be used for more relevant projects. Moreover, limited resources are a factor that determines the realization of project portfolio. Inappropriate resource allocation prolongs the completion date of the project or, in certain cases, serves as a reason for termination of the project. Thus, project selection and resource allocation are the basic elements of project portfolio management. The aim of this paper is to summarize the literature on quantitative modelling for project selection and resource allocation, to emphasize the diversity of existing methods and to present a classification of methods for project selection and resource allocation.