Risk Management for Design and Construction
Book Details :
LanguageEnglish
Pages284
FormatPDF
Size8.75 MB


Risk Management for Design and Construction



Download PDF of Risk Management for free


Risk Management for Design and Construction by Ovidiu Cretu, Robert Stewart and Terry Berends PDF Free Download.

This book is printed on acid-free paper.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

First and foremost, I’d like to thank my wife, Tamara, for enthusiastically supporting me in all my activities, and my children, Petru and Vlad, for being there and putting up with me.

—Ovidiu

I wish to dedicate this book to my loving wife Judi and to our children, Ty and Charli, for their support and love.

—Terry

Thanks to my girls, Vanessa and Daphne, for heightening my sensitivity to risk.

—Rob

For all of our colleagues in project management who share our passion to build better values.

—All

Main Contents of Risk Management for Design and Construction


  • CHAPTER 1: WHY AND WHAT IS RISK MANAGEMENT?
  • CHAPTER 2: PROJECT COST AND SCHEDULE ESTIMATES
  • CHAPTER 3: THE RISK-BASED ESTIMATE
  • CHAPTER 4: RISK ELICITATION
  • CHAPTER 5: RISK MANAGEMENT
  • CHAPTER 6: RISK-BASED ESTIMATE SELF-MODELING SPREADSHEET
  • CHAPTER 7: RISK-BASED ESTIMATE WORKSHOP

Preface to Risk Management for Design and Construction eBook


Risk management is perhaps the hottest topic of discussion for professionals within the design and construction industry who care about the fate of their endeavors, whatever they may be.

Increasingly, professionals are engaged in risk management even before the project is assigned to them. It is difficult to imagine project management without formal or informal risk management.

The next paragraph presents one more reason why risk management is needed for projects that we want to succeed.

The need to make strategic long-term investment decisions under short-term budget constraints continues to force states to consider risk as a criterion for judging a course of action.

Because perceptions of risk vary, decisions incorporating risk management concepts depend to a large extent on the decision maker’s tolerance for risk.

It is this fact that makes implementing concepts incorporating risk more difficult because it requires decision makers to establish boundaries of acceptability based on political, economic, and engineering constraints, most of which are unknown.

Having clear, well defined, risk analysis methods and procedures is a first step toward helping agency leaders begin to incorporate risk into their decision making process.

Michael Smith
Federal Highway Administration

Whether we acknowledge it or not, risk management is part of our daily life. For the most part, we assess it on an unconscious level, usually out of habit.

For example, consider the ubiquitous nature of the flu. We all know that when the flu strikes, suffering will follow.

The fact that a person may or may not be infected by the flu is anyone’s guess; however, based on historical data, we may say that there is about a 75 percent chance of being exposed to the flu.

Once a person is exposed to the flu, if that person is vaccinated against the flu, he or she still has a 10 percent chance of getting sick, while a person who hasn’t been vaccinated has a much higher chance (85 percent) of getting sick (the percentages are simple assumptions).

We know that people manage the risk of getting the flu differently. Spending a few dollars for a flu shot reduces the chance of being infected to 7.5 percent.

Within the context of risk management, when a person gets immunized we call this action risk mitigation, because it reduces, but does not eliminate, the chance of getting infected.

Another person may elect not to get a flu shot, and he/she is accepting the chance of 67.5 percent of getting sick.

This inaction is referred to as risk acceptance, when a person elects to take action (medication) after being infected.

A third person may elect to avoid leaving his or her house and remain completely isolated from other people. His or her chance of getting sick is close to zero. In this scenario, the decision to take extreme action to ensure that she/he is not going to be infected is called risk avoidance.

The flu example may be expanded further if we consider and compare the effect of the flu on vaccinated persons versus nonvaccinated ones.

The concept of risk impact or consequence explains the second part of the flu story. The flu’s impact on a person may be measured by how much that person is going to suffer and for how long.

As a general rule, a vaccinated person will suffer less than a nonvaccinated person and will also recover in a shorter time period.

The ‘‘suffering’’ may be measured by the time lost from regular activities, the cost of medicine, infecting others, and so on, and can be expressed through a range.

Now things are becoming more complicated so we will end the flu story here since we do not want to expose the Risk Management for Design and Construction book’s secret just yet.

The decision of whether or not to get vaccinated is relatively simple; people usually consider all of the facts presented, but do not perform a formal risk analysis.

Common sense dictates to each person how to manage the risk of getting the flu and, more often than not, their decision is right.

There is an abundance of sophisticated software available on the market today that allows risk to be quantified.

Aside from being expensive, they require specialized training and experience in setting up the models. Further, as most of these are designed to address a wide range of risk modeling scenarios, they include additional features and layers of complexity that are not needed for construction applications.

A good model should be as simple as it needs to be and no simpler. Finding this ‘‘sweet spot’’ is important in both building the model and understanding the output.

To paraphrase Alan Davis, author of Software Requirements—Analysis & Specification, a model simply provides us with a richer, higher level, and more semantically precise set of elements than the underlying wholesome guesstimate.

Using such a model reduces ambiguity, makes it easier to check for incompleteness, and may at times improve understandability.

This Risk Management for Design and Construction book provides a practical framework for managing risk on construction projects, from their inception at the earliest stage of design through the end of construction.

A central element in the presentation of this material is risk modeling software that will allow users a simple means of quantifying project risks in terms of their impacts to both time and cost.

The software is driven by MS Excel, and does not require any prior knowledge of programming or risk modeling.

The information provided in this Risk Management for Design and Construction book is sufficient for any Excel user to get started, run it, and understand and explain the model results.

John Koga CVS-Life, CDT, LEED AP
Member AIA, CSI, USGBC, SAVE International Manager, Value and Lean Process 
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