Paek, J H; Lee, Y W and Ock, J H (1993) Pricing construction risk: Fuzzy set application. Journal of Construction Engineering and Management, 119(4), pp. 743-756. ISSN 0733-9364
Abstract
Contractors may be faced with the problem of deciding the bidding price of a construction project, when the likelihood of the occurrence of risk events and the risk-associated consequences (monetary loss and gain) are uncertain. If the monetary loss resulting from risk events is not considered or is underestimated due to associated uncertainties, a construction enterprise may suffer a tremendous loss and eventually fail. In this paper, a risk-pricing method is proposed for analyzing and pricing construction project risk. The method consists of identifying risk elements and quantifying risk-associated consequences. The uncertainty in the values of the quantified consequences are represented by using a fuzzy set approach and incorporated directly into the bidding price decision process. The proposed risk-pricing method will assist contractors in the process of estimation under uncertainty. A real construction project is selected to illustrate how the proposed method can be put into practice.
| Item Type: | Article |
|---|---|
| Index terms: | decision process, fuzzy set, bidding, estimation, construction project, pricing |
| Subjects: | economic analysis, decision-making and optimization, decision analysis, bidding, production management, financial and cost management |
| Topics: | Business Strategy, Risk Management, Cost Management, Procurement, Research Practice, Project Management |
| Descriptive scope: | 2 PC |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here