Russell, A D and Ranasinghe, M (1992) Analytical approach for economic risk quantification of large engineering projects. Construction Management and Economics, 10(4), pp. 277-301. ISSN 01446193
Abstract
A consistent, four moment based approach for quantifying time and economic risks is presented. The goal is to produce a computationally efficient tool that can be used to explore economic feasibility and tradeoffs between cost and time performance versus risk as a function of various strategies for executing and sequencing major work packages. A three level hierarchy of parameters is used, starting with time, cost and revenue performance at the work package/revenue stream level to rate of return at the overall project level. Use of a four moment approach and Pearson distributions at all levels of the hierarchy permit the formulation of a consistent and readily automated approach to risk measurement. Treatment of correlations is included. A modified form of PNET is presented for quantifying time uncertainty. Use of limiting values (0, 1) of the PNET transitional correlation provide bounds for decision parameters.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | economic risk quantification; large engineering projects; moment analysis; pearson distributions; probability analysis |
| Index terms: | probability analysis, strategy, tradeoff, revenue, stream, time performance, quantification, package |
| Subjects: | economic analysis, contractual arrangements, measurement and scaling, decision analysis, project controls, statistical analysis, management, water management |
| Topics: | Time Control, Research Practice, Business Strategy, Sustainability, Procurement, Risk Management |
| Descriptive scope: | 3 PCA |
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