ABSTRACT
The only way is rank ordering the project proposals according to some criterion and then inserting a cutoff point at the place where the total resources needed for the projects' implementation equal or exceed the resources available to the organization. There are two approaches to this methodology: the so-called purely financial approach and the scoring model methodology. There are many different approaches to this task, but the most popular ones are the financial method and the scoring model. Any financial value is positively correlated with the project's expected cash inflow and is negatively correlated with the project's cost. The essence of the scoring model approach is to have several variables that the executives consider important when assessing the value of their future projects. This is usually done during a project portfolio workshop where the facilitator first explains the theory behind the scoring approach, provides several examples of scoring models developed by other companies.
