Project risk decision model under risk preference and limited resources
Date Issued
2007
Date
2007
Author(s)
Lin, Ro-Sen
DOI
zh-TW
Abstract
During the execution of a project, unexpected events usually cause delay and financial loss, these are termed project risks. As a result, in order to reduce the impact of project risk, effective risk management model becomes an important issue.
This study integrates project risk analysis models proposed by scholars and introduces the concept of risk preference to establish a project risk decision model. Decision makers can evaluate each risk treatment strategy according to their own risk preference. This study establishes a project risk decision model and uses “risk decrease” to replace “effect” as the evaluating index. Furthermore, the utility based-selection decision support problem model (u-sDSP) is employed to evaluate the utility of risk treatment strategies for decision makers. Finally, the principle of integer programming is adopted to determine the optimal set of risk treatment strategies which maximizes effects with limited resources.
Taking a case of Torpedo Development Project as an example, the proposed combined model is employed in the analysis, and the result is compared with those obtained form other models. In conclusion, results obtained from the proposed model of this study is better. The reason is attributed to that the project risk decision model established by this study has taken risk preference into consideration. Thus, in practical application, the proposed model can provide better decision making solutions for decision makers.
Subjects
專案風險管理
風險偏好
效用
風險決策
project risk management
risk preference
utility
risk decision
Type
thesis
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