Projects have a life cycle, and termination of a project by a firm from the market is considered to be a part of the project life cycle. Project needs to be terminated when the project has failed or at the point when the company is expecting the project to fail. A project failure could be due to various reasons but it often results in financial losses to the company. If the firm is aware that the project is going to fail in advance then it can plan for the termination phase of the project which also allows the company to plan for its termination phase. Termination of a project is also expected to have an impact on the organization image, to have a successful project termination the project needs to be terminated without affecting the market value of the firm.
At present there is no project termination model that predicts the project termination phase and also the company management does not know whether termination of a project would have an effect on the market value of the firm or not. The aim of this thesis work was to develop and validate an engineering economic model which forecasts the project termination phase from an engineering economic perspective and
also give an insight to the decision maker whether project termination would have an impact on the market value of the firm or not.
The model can be used as a guiding tool by the decision maker of the company, on knowing when the termination phase of the project should be, and whether termination would have an effect on the market value of the firm or not, instead of relaying only on the decision makers' heuristic evaluation.
The engineering economic model developed called as Project Termination Phase Forecasting Model (PTPFM) is able to forecast the project termination phase of a project and the model has been validated by analyzing four cases, one from each of the following industries Automobile, Airline, Defense and Telecommunication. The PTPFM forecasts project termination phase of the project without affecting the market value of the firm under the assumption that the project has a significant impact on the market value of the firm.