Probability and Risk Management

This article offers a system of risk management and assessment using probabilistic methods, which are necessary to make accurate calculations for complex infrastructure projects. As opposed to simple deterministic calculations, probabilistic risk assessment can incorporate the uncertainties related to project elements like changed ground conditions, lack of funds, increased cost of loans, and political uncertainties. The method produces a probabilistic distribution for the cost of risks. The method uses software developed by the authors. This approach uses values lying within a bandwidth and modeled by a defined distribution density. That permits the information to be preserved throughout the whole process of risk management, rather than using deterministic figures. While commercial products provide density distribution functions for modeling uncertainty, most are too sophisticated and require data that are not easily available. The authors identify three tasks that the risk management software should support: modeling of uncertainties in basic cost estimates, modeling of density distribution for individual risks, and methods for aggregating cost items and cost of risks. Additionally, the system should provide tools for administering risk over the entire life of the project. An example is given to show how the system works. It involves deformation of drilled piles, with the risk characterized through the probability of occurrence and the financial consequences. After analyzing and identifying risks, aggregation is the final step of each cycle. The system also allows for comprehensive documentation in order to track individual risks and the total risk potential over all phases of execution. This permits a solid basis for making budgets and exercising cost control. A subsequent version of the software is expected to include an element to assess the time extension related to risks, in addition to their monetary costs.

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/0041414X
• Authors:
  • Sander, Philip
  • Spiegl, Markus
  • Schneider, Eckart
• Publication Date: 2009-4

Language

• English

Media Info

• Media Type: Print
• Features: Figures; References;
• Pagination: pp 41-42, 44-45
• Serial:
  • Tunnels & Tunnelling International
  • Publisher: Progressive Media Markets, Ltd
  • ISSN: 0041-414X

Subject/Index Terms

• TRT Terms: Cost estimating; Probability; Risk assessment; Risk management; Underground construction; Underground structures
• Subject Areas: Administration and Management; Highways; I10: Economics and Administration; I25: Design of Tunnels;

Filing Info

• Accession Number: 01131576
• Record Type: Publication
• Source Agency: UC Berkeley Transportation Library
• Files: BTRIS, TRIS
• Created Date: Jun 30 2009 8:32AM