Dynamic modeling of the quantitative risk allocation in construction projects

Allocation of construction risks between owners and their contractors has a significant impact on the total construction costs. This research presents an integrated fuzzy-system dynamics approach for quantitative risk allocation. All the factors affecting the risk allocation process are modeled using system dynamics approach. Fuzzy logic is integrated into system dynamics modeling structure to account for the existing uncertainties. The values of different factors that have an uncertain nature are determined by fuzzy numbers. The application of Zadehʹs extension principle and interval arithmetic is proposed for the system dynamics to enable the system outcomes to be presented considering uncertainties in the input variables. Using the proposed integrated fuzzy-SD model, the project cost is simulated at different percentages of risk allocation. The optimum percentage of risk allocation is determined as a point in which the project cost is minimized. The performance of the proposed method is assessed by employing the method in a tunneling project.