The price of risk in construction projects: contingency approximation model (CAM)

Little attention has been focussed on a precise definition and evaluation mechanism for project management risk specifically related to contractors. When bidding, contractors traditionally price risks using unsystematic approaches. The high business failure rate our industry records may indicate that the current unsystematic mechanisms contractors use for building up contingencies may be inadequate. The reluctance of some contractors to include a price for risk in their tenders when bidding for work competitively may also not be a useful approach. Here, instead, we first define the meaning of contractor contingency, and then we develop a facile quantitative technique that contractors can use to estimate a price for project risk. This model will help contractors analyse their exposure to project risks; and help them express the risk in monetary terms for management action. When bidding for work, they can decide how to allocate contingencies strategically in a way that balances risk and reward

A methodology for the selection of new technologies in the aviation industry

The purpose of this report is to present a technology selection methodology to quantify both tangible and intangible benefits of certain technology alternatives within a fuzzy environment. Specifically, it describes an application of the theory of fuzzy sets to hierarchical structural analysis and economic evaluations for utilisation in the industry. The report proposes a complete methodology to accurately select new technologies. A computer based prototype model has been developed to handle the more complex fuzzy calculations. Decision-makers are only required to express their opinions on comparative importance of various factors in linguistic terms rather than exact numerical values. These linguistic variable scales, such as ‘very high’, ‘high’, ‘medium’, ‘low’ and ‘very low’, are then converted into fuzzy numbers, since it becomes more meaningful to quantify a subjective measurement into a range rather than in an exact value. By aggregating the hierarchy, the preferential weight of each alternative technology is found, which is called fuzzy appropriate index. The fuzzy appropriate indices of different technologies are then ranked and preferential ranking orders of technologies are found. From the economic evaluation perspective, a fuzzy cash flow analysis is employed. This deals quantitatively with imprecision or uncertainties, as the cash flows are modelled as triangular fuzzy numbers which represent ‘the most likely possible value’, ‘the most pessimistic value’ and ‘the most optimistic value’. By using this methodology, the ambiguities involved in the assessment data can be effectively represented and processed to assure a more convincing and effective decision- making process when selecting new technologies in which to invest. The prototype model was validated with a case study within the aviation industry that ensured it was properly configured to meet the

Risk assessment of blasting operations in open pit mines using FAHP method

Purpose. In the mining blasting operation, fragmentation is the most important output. Fly rock, ground vibration, air blast, and environmental effects are detrimental effects of blasting operations. Identifying and ranking the risk of blasting operations is considered as the most important stage in project management. Methods. In this research, the problem of identifying and ranking the factors constituting the risk in blasting operations is considered with the methodology of the Fuzzy Analytical Hierarchy Process (FAHP). Criteria and sub-criteria have been determined based on historical research studies, field studies, and expert opinions for designing a hierarchical process. Findings. Based on FAHP scores, non-control of the sub-criterion of health and safety (C3), blast operation results (C18) and knowledge, and skill and staffing (C2) with a score of 0.377, 0.334, and 0.294 respectively are the most effective sub-criterion for the creation of blasting operations risk. According to the score, the sub-criterion C18 is the most effective sub-criterion in providing the blasting operations risk. Effects and results of blasting operations (D8), with a score of 0.334 as the most effective criterion, and natural hazards (D10), with a score of 0.015, were the last priorities in the factors causing blasting operations risk. Originality. Regarding the risk rating of blasting operations, the control of the sub-criteria C3, C18, and C2, and the D8 criterion, is of particular importance in reducing the risk of blasting operations and improving project management. Practical implications. The evaluation of human resource performance and increase in the level of knowledge and skills and occupational safety and control of all outputs of blasting operations is necessary. Therefore, selecting the most important project risks and taking actions to remove them is essential for risk management.Мета. Визначення ризиків проведення вибухових робіт та їх оцінка на основі використанням нечіткого методу аналізу ієрархій (НМАІ) для покращення управління якістю проектів. Методика. В рамках даного дослідження, проблеми визначення та оцінки ризиків вибухових робіт розглядалися із застосуванням нечіткого методу аналізу ієрархій. На базі аналізу історичних даних і польового дослідження з урахуванням експертних оцінок були визначені критерії та підкритерії для побудови ієрархій. Результати. За результатами НМАІ, неконтролюючий підкритерій здоров’я та безпеки (С3), підкритерій результатів вибухових робіт (С18), знань, умінь і кадрів (С2) зі значеннями 0.377, 0.334 і 0.294 відповідно найбільш ефективні в появі ризику проведення вибухових робіт. Підкритерій С18 чинить найбільший вплив на ризик проведення вибухових робіт. Критерій результатів і наслідків вибухових робіт (D8) з найефективнішим значенням 0.334 та критерій природних катастроф (D10) зі значенням 0.015 є останніми пріоритетами серед чинників, які визначають ризик проведення вибухових робіт. Наукова новизна. Отримав доповнення та подальший розвиток науково-методичний підхід до визначення ризиків при проведенні вибухових робіт, заснований на їх ранжуванні з використанням системи виявлених критеріїв і підкритеріїв методом НМАІ. Практична значимість. Для успішного керування проектом важливо визначати найсерйозніші ризики проекту й вжити заходів щодо їх усунення. Відносно ранжирування ризиків проведення вибухових робіт управління підкритеріями C3, C18 і C2, а також критерієм D8, особливо важливо для зниження цих ризиків та покращення якості управління проектом.Цель. Определение рисков проведения взрывных работ и их оценка на основе использования нечеткого метода анализа иерархий (НМАИ) для улучшения управления качеством проектов. Методика. В рамках данного исследования, проблемы определения и оценки рисков взрывных работ рассматривались с применением нечеткого метода анализа иерархий. На базе анализа исторических данных и полевого исследования с учетом экспертных оценок были определены, критерии и подкритерии для построения иерархий. Результаты. По результатам НМАИ, неконтролирующий подкритерий здоровья и безопасности (С3), подкритерий результатов взрывных работ (С18), знаний, умений и кадров (С2) со значениями 0.377, 0.334 и 0.294 соответственно наиболее эффективны в появлении риска проведения взрывных работ. Подкритерий С18 оказывает самое большое влияние на риск проведения взрывных работ. Критерий результатов и последствий взрывных работ (D8) с самым эффективным значением 0.334 и критерий природных катастроф (D10) со значением 0.015 являются последними приоритетами среди факторов, которые определяют риск проведения взрывных работ. Научная новизна. Получил дополнение и дальнейшее развитие научно-методический подход к определению рисков при проведении взрывных работ, основанный на их ранжировании с использованием системы выявленных критериев и подкритериев методом НМАИ. Практическая значимость. Для успешного руководства проектом важно определять самые серьезные риски проекта и предпринять действия по их устранению. В отношении ранжирования рисков проведения взрывных работ управление подкритериями C3, C18 и C2, а также критерием D8, особенно важно для снижения этих рисков и улучшения руководства проектом.The authors would like to thank Mining Engineering Department, Islamic Azad University (South Tehran Branch) for supporting this research

A framework for the selection of the right nuclear power plant

Civil nuclear reactors are used for the production of electrical energy. In the nuclear industry vendors propose several nuclear reactor designs with a size from 35–45 MWe up to 1600–1700 MWe. The choice of the right design is a multidimensional problem since a utility has to include not only financial factors as levelised cost of electricity (LCOE) and internal rate of return (IRR), but also the so called “external factors” like the required spinning reserve, the impact on local industry and the social acceptability. Therefore it is necessary to balance advantages and disadvantages of each design during the entire life cycle of the plant, usually 40–60 years. In the scientific literature there are several techniques for solving this multidimensional problem. Unfortunately it does not seem possible to apply these methodologies as they are, since the problem is too complex and it is difficult to provide consistent and trustworthy expert judgments. This paper fills the gap, proposing a two-step framework to choosing the best nuclear reactor at the pre-feasibility study phase. The paper shows in detail how to use the methodology, comparing the choice of a small-medium reactor (SMR) with a large reactor (LR), characterised, according to the International Atomic Energy Agency (2006), by an electrical output respectively lower and higher than 700 MWe

Multi-agent knowledge integration mechanism using particle swarm optimization

This is the post-print version of the final paper published in Technological Forecasting and Social Change. The published article is available from the link below. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. Copyright @ 2011 Elsevier B.V.Unstructured group decision-making is burdened with several central difficulties: unifying the knowledge of multiple experts in an unbiased manner and computational inefficiencies. In addition, a proper means of storing such unified knowledge for later use has not yet been established. Storage difficulties stem from of the integration of the logic underlying multiple experts' decision-making processes and the structured quantification of the impact of each opinion on the final product. To address these difficulties, this paper proposes a novel approach called the multiple agent-based knowledge integration mechanism (MAKIM), in which a fuzzy cognitive map (FCM) is used as a knowledge representation and storage vehicle. In this approach, we use particle swarm optimization (PSO) to adjust causal relationships and causality coefficients from the perspective of global optimization. Once an optimized FCM is constructed an agent based model (ABM) is applied to the inference of the FCM to solve real world problem. The final aggregate knowledge is stored in FCM form and is used to produce proper inference results for other target problems. To test the validity of our approach, we applied MAKIM to a real-world group decision-making problem, an IT project risk assessment, and found MAKIM to be statistically robust.Ministry of Education, Science and Technology (Korea

Multi crteria decision making and its applications : a literature review

This paper presents current techniques used in Multi Criteria Decision Making (MCDM) and their applications. Two basic approaches for MCDM, namely Artificial Intelligence MCDM (AIMCDM) and Classical MCDM (CMCDM) are discussed and investigated. Recent articles from international journals related to MCDM are collected and analyzed to find which approach is more common than the other in MCDM. Also, which area these techniques are applied to. Those articles are appearing in journals for the year 2008 only. This paper provides evidence that currently, both AIMCDM and CMCDM are equally common in MCDM

Theoretical optimisation of IT/IS investments: A research note

The justification of Information Technology (IT) is inherently fuzzy, both in theory and practice. The reason for this is due to the largely intangible dimensions of IT projects. In view of this, this research note presents the results of on-going research, in the application of Fuzzy Cognitive Mapping (FCM), as a tool to identify complex functional interrelationships associated with the justification of IT. This paper presents a theoretical functional model which describes these relationships, and by using an FCM, further interrelationships are developed in the context of justifying IT projects. A procedure which would address the optimisation of these intangible relationships in the form of a Genetic Algorithm (GA) is proposed as a process for Investment Justification