Developing a Risk Assessment Model Based on Time Value of Money and Cost-Benefit Ratio in Construction Projects
Journal of Civil, Construction and Environmental Engineering
Volume 2, Issue 2, April 2017, Pages: 34-43
Received: Jan. 24, 2017;
Accepted: Feb. 20, 2017;
Published: Mar. 3, 2017
Views 2115 Downloads 116
Roghaye Mousazade, Department of Civil Engineering, Faculty of Engineering, South Tehran Branch, Islamic Azad University, Tehran, Iran
Abbas Mahmoudabadi, Department of Industrial Engineering, Mehr Astan University, Guilan, Iran
In the present paper, a cost-risk and income-risk evaluation model has been developed in order to evaluate the risks of cost and incomes those may happen in construction projects. Since, it is important to determine risk factors for different activities and stages of various projects; the main aim is to propose an evaluation model for estimating the present value of risks corresponding to costs and incomes of the construction projects. The estimating procedure which has been proposed in this research work is that a project is broken into stages and related activities and the present value of cost and income risks as well as the value of different risk groups are calculated and compared to three pre-defined risk categories. Utilizing the proposed procedure using experimental data gathering for a under construction primary school building shows that the proposed model can help decision makers to determine and assess the risks of cost and incomes over the project activities. In addition, using the proposed procedure helps them to talk about how to deal with those risks to be reduced, accepted or transferred to other project components.
Developing a Risk Assessment Model Based on Time Value of Money and Cost-Benefit Ratio in Construction Projects, Journal of Civil, Construction and Environmental Engineering.
Vol. 2, No. 2,
2017, pp. 34-43.
Jannadi, O. A., Almishari, S., Risk Assessment in Construction, 10.1061/(ASCE)0733-9364, 129: 5 (492), 2003.
Memon, A. H., Rahman, I. A, Zainun, N. Y., Abd Karim, A. T., Web-based Risk Assessment Technique for Time and Cost Overrun (WRATTCO) – A Framework, Procedia - Social and Behavioral Sciences 129 (2014) 178–185, ICIMTR 2013.
Taroun, A. Towards a better modeling and assessment of construction risk: Insights from a literature review, International Journal of Project Management 32, Pages 101–115, 2014.
Nasir, D., McCabe, MC., Hartono, L., Evaluating Risk in Construction–Schedule Model ERIC–S: Construction Schedule Risk Model, 10.1061/(ASCE)0733-9364 (2003) 129: 5 (518), 2003.
El-Karim, M. S. B., El Nawawy, O. A. M., Abdel-Alim, A. M., Identification and assessment of risk factors affecting construction projects, HBRC Journal, 2015.
Dziadosza, A., Tomczykb, A., Kaplińskic, O., Financial risk estimation in construction contracts, Operational Research in Sustainable Development and Civil Engineering - EURO working group meeting and 15th German-Lithuanian-Polish colloquium (ORSDCE 2015), 2015.
Choudhry, R. M., Aslam, M. A., Hinze, J. W., Arain, F. M., Cost and Schedule Risk Analysis of Bridge Construction in Pakistan: Establishing Risk Guidelines, DOI: 10.1061/(ASCE)CO.1943-7862.0000857, American Society of Civil Engineers, 2014.
Tamosaitiene, J., Zavadskas, E. K., Turskis, Z., Multi-criteria risk assessment of a construction project, Procedia Computer Science 17 (2013) 129–133.
Karimi Azari, A. R., Mousavi, N., Mousavi, S. F., Hosseini,, S. B., Risk assessment model selection in construction industry, Expert Systems with Applications 38, Pages 9105–9111, 2011.
Purnus, A., Bodea, C. N., Correlation between time and cost in quantitative risk analysis of construction projects, Creative Construction Conference, CC2014, 2014.
Fouzi A. H., Project cost risk assessment: an application of project risk.
Rezaian, A, Time Cost Quality Risk Of Construction And Development Projects Or Investment”, Middle-East Journal of Scientific Research 10 (2), Pages 218-223, 2011.
Toth, T., Sebestyen, Z., Time-varying risks of construction projects, Creative Construction Conference 2015, (CCC2015).