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System dynamics approach for quantitative risk allocation
journal contribution
posted on 2013-09-01, 00:00 authored by Farnad NasirzadehFarnad Nasirzadeh, M Khanzadi, M RezaieAllocation of construction risks between clients and their contractors has a significant impact on the total construction costs. This paper presents a system dynamics (SD)-based approach for quantitative risk allocation. Using the proposed SD based approach, all the factors affecting the risk allocation process are modeled. The contractor’s defensive strategies against the one-sided risk allocation are simulated using governing feedback loops. The full-impact of different risk allocation strategies may efficiently be modeled, simulated and quantified in terms of time and cost by the proposed object-oriented simulation methodology. The project cost is simulated at different percentages of risk allocation and the optimum percentage of risk allocation is determined as a point in which the project cost is minimized. To evaluate the performance of the proposed method, it has been implemented in a pipe-line project. The optimal risk allocation strategy is determined for the inflation risk as one of the most important identified risks.
History
Journal
International journal of industrial engineering and production researchVolume
24Issue
3Pagination
237 - 246Publisher
Iran University of Science & TechnologyLocation
Tehran, IranISSN
2008-4889Language
engPublication classification
C Journal article; C1.1 Refereed article in a scholarly journalCopyright notice
2013, IUST PublicationUsage metrics
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