Economic optimization of project risk management efforts Academic Article uri icon

abstract

  • Risk exposure reduction is a recognized stage in project planning. The relevant literature mainly comprises of conceptual models that capture effects of uncertainty on projects, and strategies to reduce the level of risk. Ben-David and Raz1 proposed a generic model that describes the risk abatement actions selection problem. The model opts to allocate risk abatement efforts in the planning stage of a project by integrating the project work breakdown structure (WBS) with the risks generation and effects phenomena. This is achieved by explicitly relating between the project potential risk events, and the impacts of the obtainable risk abatement actions. We extend their work by mathematically formulating their generic model, by adding modeling features (feasibility constraints) and by treating the relevant optimization issues. We solve the problem with an optimal non-efficient branch …

publication date

  • September 1, 2002