Risk Management in Construction Projects Considering the Cross-Dependency Project Risks: Utility Maximization

Abstract

Nowadays, risk management is a good way to deal with the risks that may occur in a project. In risk response analysis, risks are often assumed to be interdependent. In fact, the risks affect each other in project. Implementing and managing various projects, including construction projects, has a lot of ambiguous cases. Such cases, called uncertainty, change the outcome sometimes better, and sometimes worse than anticipated. Complexity, challenge and uncertainty are more common in building projects with different interactions between the pillars inside and outside it. Therefore, in order to realize the quantitative and qualitative goals of these projects, it is necessary to use a framework for identifying risks, monitoring and controlling them in relation to the activities and complexity of their communications .In this article, first we consider a construction project and then, with experts' opinions and a brain storm meeting, we identified the risks involved, then, according to experts, we determined the strategy for each risk. Finally, we have used an optimal model for choosing risk response strategies with respect to the risks’ interdependence. The main finding through the analysis of the project is that the low attention or neglect of the interdependence of risk, reduces the expected utility and increases the implementatio