Arabi, S; Eshtehardian, E and Shafiei, I (2022) Using Bayesian networks for selecting risk-response strategies in construction projects. Journal of Construction Engineering and Management, 148(8): 04022067, ISSN 0733-9364
Abstract
Construction projects are known as high-risk projects due to their complex and dynamic nature. The probability of success of construction projects is increased with efficient management of key risks. Understanding and selecting risk-response strategies is an essential step in the risk management process, which plays a crucial role in reducing the probability and impact of risks. Moreover, risk interdependencies play a pivotal role in deciding about risk-response strategies. On the other hand, the implementation of any response may impose a cost on the project, which the project team should be aware of in all phases of the construction project. Existing risk-assessment methods often do not consider the risk interdependencies and the role of risk-response strategies in reducing project risk exposure. Besides, the lack of data in construction projects hampers the use of risk-assessment methods. Bayesian networks (BNs) can reduce some of these limitations. The research aims are to provide a Bayesian-based model to assess the probability of project failure considering risk interdependencies and the role of risk-response strategies in reducing project risk exposure. The cost of implementing risk-response strategies to help decision makers in selecting from different responses is also calculated. Moreover, in order to validate the model and explain the procedure of implementing it practically, it was implemented in a construction project case study. The result of the model implementation for the case study showed that by allocating about 2% more money on implementing risk-response strategies than in the basic scenario (without entering observations), the probability of project failure was reduced about 60%. Moreover, when the total cost of implementing risk-response strategies was increased dramatically, the probability of project failure did not necessarily decrease because the most expensive risk-response strategy may not the best one. The proposed model provides the best combination of risk responses by minimizing the probability of project failure and the cost of implementing risk responses.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Bayesian networks; construction projects; risk analysis; risk interdependencies; risk response |
| Index terms: | exposure, strategy, project failure, case study, project team, bayesian network, risk response, risk management, construction project, risk analysis, implementation |
| Subjects: | project completion, probabilistic model, project delivery, contractual arrangements, data collection methods, production management, risk assessment, public and environmental health, management, financial risk, environmental hazards |
| Topics: | Cost Management, Business Strategy, Project Management, Health and Safety, Procurement, Digital Applications, Research Practice, Risk Management, Sustainability |
| Descriptive scope: | 4 PCEA |
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