ABSTRACT
Estimating the likelihood and the impact of risks, and estimating their implications on project’s objectives (quantitative risk analysis) requires expert knowledge. In addition, statements made by experts usually contain imprecision. Previous studies have demonstrated the use of the CIRIA document “A Simple Guide to Controlling Risk”, Monte Carlo simulation or methods involving fuzzy sets, in order to quantify the uncertainty associated with construction activities’ risks. These studies, however, did not address the processing of information for generating a complete quantitative risk analysis method.
This paper presents a new analytical modelling method that simulates and supports the existing risk assessment analysis and Risk Management Systems and based on Fuzzy Sets Theory. The proposed method incorporates a number of new techniques that facilitate: the representation of imprecise risks, the calculation of the actual cost of risks, and the interpretation of the results. A worked example, using the three new techniques, illustrates the use of the proposed method and allows comparison with Monte Carlo simulation. The calculations are shown to be simpler, requiring less computational effort than that needed in Monte Carlo simulation. The research aims to determine the modification factor ξ, which should be used to combine the effects of multiple risk factors on a project’s overall risk (and on the component work packages), in order to deliver improved results and to bridge the gap between monitoring and controlling the risk management process. The authors argue that the proposed method is practical and can be easily computerised.
