Warszawski, A and Sacks, R (2004) Practical multifactor approach to evaluating risk of investment in engineering projects. Journal of Construction Engineering and Management, 130(3), pp. 357-367. ISSN 0733-9364
Abstract
Risk analysis is crucial in enabling management to make informed decisions regarding the economic viability of engineering projects. In most building construction projects, sophisticated risk assessment methods are not used because the detailed input information they require is unavailable to the average project owner or manager. As a result, risk assessment is often limited to simple sensitivity analyses. This paper presents a practical yet thorough method in which the economic risk inherent in a construction project can be calculated with input information of varying levels of detail. The proposed "multifactor" method includes consideration of interdependence between a project's risk factors. The principles of the method are explained, its application to a large construction project is illustrated, and the findings are discussed.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | decision making; economic factors; investments; probabilistic models; project management; risk analysis |
| Index terms: | risk assessment, project management, risk factor, interdependence, owner, manager, decision-making, sensitivity analysis, economic factor, building construction, risk analysis, construction project, large construction project |
| Subjects: | sociology, organizational theory, economic concepts, project management theory and practice, decision analysis, building construction, practitioner, environmental hazards, financial risk, production management, organizational analysis |
| Topics: | Cost Management, Construction Technology, Project Management, Sustainability, Organizational Design, Stakeholder Management, Research Practice, Roles and Professions, Risk Management |
| Descriptive scope: | 2 PC |
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