Dynamic risk analysis in construction projects

Abstract

The occurrence of one risk may exacerbate other risks or portfolios of risks due to their highly complex interrelated structures and existing interactions. Hence, the cumulative impact of a chain of risks may be greater than the sum of their individual impacts. Commonly practiced risk analysis approaches do not account for these interactions and face deficiency in providing reliable information regarding the actual impact of the identified risks. This paper presents a new approach to construction risk analysis where the interrelated structure of risks and their interactions have been modeled through the governing feedback loops. The proposed methodology is a system dynamics-based approach for risk analysis and assessment. The full impact of a risk or a set of risks may efficiently be modeled, simulated, and quantified in terms of time and cost by the proposed object-oriented simulation methodology. To evaluate the performance of the proposed methodology, it has been incorporated into a bridge construction project. The interrelated structures of the identified risks have been modeled and their cumulative consequences simulated and quantified as an illustrative example.