Construction Risk: Multiattribute Approach

Abstract

Numerous mathematical decision models have been formulated in an attempt to analyze construction risk. Most such efforts have failed because of the limited scope of their objective functions. This study presents field interview results substantiating the hypothesis that decision-making is multiattributed in nature, contrary to the implicit assumption of these other efforts. A theory is introduced which facilitates analysis of complex decisions and selection of consistent courses of action. An illustrative decision problem is solved, not only to explain the mechanics of the theory, but to demonstrate that construction risk is a function of competitive economics as well as project-related characteristics.