System dynamics approach for construction risk analysis

Presence of risks and uncertainties inherent in project development and implementation plays significant role in poor project performance. Thus, there is a considerable need to have an effective risk analysis approach in order to assess the impact of different risks on the project objectives. A powerful risk analysis approach may consider dynamic nature of risks throughout the life cycle of the project, as well as accounting for feedback loops affecting the overall risk impacts. This paper presents a new approach to construction risk analysis in which these major influences are considered and quantified explicity. The proposed methodology is a system dynamics based approach in which different risks may efficiently be modeled, simulated and quantified in terms of time, cost and quality by the use of the implemented object oriented simulation methodology. To evaluate the performance of the proposed methodology it has been employed in a bridge construction project. Due to the space limitations, the modeling and quantification process for one of the identified risks namely "pressure to crash project duration" is explained in detail.