Construction Project Risk Analysis

1326 Words6 Pages
Risk is a complex phenomenon that has physical, monetary, cultural, and social dimensions [1]. Project Management Institute (PMI) defined risk as an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives such as scope, schedule, cost, and quality [2]. Construction industry is exposed to more risk and uncertainty than perhaps any other industrial sector [3]. As a result, many projects fail to be done on time and within budget, and the history of the construction industry worldwide is full of projects that were completed with significant time and cost overruns [4].Therefore, managing of risks in construction projects has been recognized as an inherent and strictly recommended process…show more content…
For example, only two criteria can be considered in the zonal-based and trade-off approaches [14] and some required information such as the individual risks involved in the target case may not exist in the case in case-based reasoning approach [13]. Since the optimization-model approach is mostly related to this study, brief descriptions of the previous studies on this approach are provided. The optimization-model approach tries to construct a mathematical model to select the most effective risk response actions based on the project objectives such as time, cost or quality. Generally, in this model, the objective function is to minimize the cost of implementing actions. This approach has shown its practicability in previous studies for evaluating and selecting risk response actions to achieve the project objectives. For example, kayis et al., 2007 developed five computational algorithms including least-cost-first, highest-risk-first, minimum-cost-risk-ratio-first, random-search and a genetic algorithm to find feasible solutions for mitigating risks [15]. Fan et al., 2008 developed a conceptual model to describe the quantitative relationships among risk response strategies and project characteristics. The optimization analysis was then performed to derive a minimum-cost risk-handling strategy for a particular risk event [12]. Ben-David and Raz, 2001 presented a model that…show more content…
However, it is so hard to find the exact solution in reasonable amount of time with the number of variables or constraints increasing. Therefore, for the large-size problem, some techniques and heuristic algorithms need to be developed [14].
• In most of the previous researches, the interactions among risk events are not taken into account for selecting risk response strategies. However, engineering projects are growing in complexity, of both structure and context due to the involvement of numerous, diverse, and strongly interrelated elements [18]. This situation makes it necessary to consider the influence of the existence cause and effects among risk events when estimating the effectiveness of risk response actions.
• In most of the previous researches the impact of the risk response actions are considered only on time, cost and quality. However, mostly it is also necessary other project objectives such as stakeholders' satisfaction, some project features such as its technical complexity and some project success factors such as executive support are taken into account in the evaluation of the risk response action

More about Construction Project Risk Analysis

Open Document