Fault tree analysis in a project context

Abstract

This paper introduces the usage of the Fault Tree Analysis (FTA) for the risk assessment of a project. It utilizes this technique, well known to engineers, to obtain quantitative measures of risks that can be encountered during project execution. In order to apply this technique, representation of a project as an engineering system is introduced in this paper. The method is generic and allows modeling of any type of risk but is illustrated with a delay of the project completion. The efficiency of the new method is analyzed using computational system efficiency theory based on functional - reliability measures approach. I. INTRODUCTION. Uncertainty and risk analysis is not new; however, as a tool in business it has historically been of limited use. This is surprising considering that many business decisions are based on a figure that has been calculated from analysis of some kind. FTA has been introduced nearly 40 years ago and from that time has been extensively developed. The main field of application for this method were always complicated engineering systems, e.g. nuclear plants, airplanes, (1, 2) whose failure could potentially lead to catastrophic consequences. The purpose of this paper is to show how the FTA can be used for project risk analysis in order to expand existing methods offering new qualities and features. The method permits a simultaneous analysis of various risks associated with a project. This is in contrast with a common practice, where the various risks are usually assessed separately and a judgment is made playing one risk against another. The FTA approach can also be used to asses a risk in a series of related projects. It is shown in the paper that the method is computationally efficient when several risk factors need to be valuated simultaneously.