Fuzzy Arithmetic Risk Analysis Approach to Determine Construction Project Contingency

AbstractThe use of proper risk analysis techniques and contingency determination procedures in construction projects improves project efficiency and effectiveness. However, the uncertainty inherent in risk and the lack of sufficient related historical data on risks make it difficult to precisely assess a project’s degree of risk exposure using classical deterministic or probabilistic risk analysis techniques. This paper provides an alternative to these techniques that uses fuzzy logic and expert judgment. It proposes a fuzzy contingency determination model (FCDM) that utilizes a novel and transparent fuzzy arithmetic procedure to determine construction project contingency using the α-cut method and the extension principle, based on t-norms. Linguistic scales, represented by fuzzy numbers, enable experts to use natural language to assess the probability and impact of risk and opportunity events instead of depending on historical data. The model expresses contingency either as confidence intervals at differ...

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