Risk Analysis of Construction Project Using Sensitivity Analysis
Construction process is complex and characterized by many uncertainties from beginning to end which inherits huge number of risks at various levels as compared to any other industries. Hence, construction projects fail to achieve their desired outcome of attaining project and business goals. Most stakeholders have developed a series of thumb rule that they apply to analyze the risks. These rules rely mostly on experience and judgment. Rarely do stakeholders quantify uncertainty and systematically assess the risks involved in a project. Furthermore, even if the risks are assessed, they even less frequently evaluate the consequences associated with these risks. This study aims to perform a systematic risk analysis of a construction project qualitatively and quantitatively. A residential project is considered as a case study upon which qualitative analysis is done by probability impact (PI) matrix method and quantitative analysis is done using expected monetary value (EMV) analysis. Sensitivity analysis is used to determine the effect of change in key risk variables that can influence the total expected monetary value of risks and to investigate its consequences.