Mitigation of Risk Factors in Construction Industry - Research Paper Example

The mathematical methods discussed in detail above are the techniques of range estimation based on expert opinion, systems approach using Monte Carlo algorithms, multiple-layer grey evaluation, rough set and informational entropy approaches, and approaches that utilize a combination of fuzzy logic, particle swarm optimization (PSO) and artificial neural networks (ANN), each of which is examined in terms of its characteristics and effectiveness in this report. Risk mitigation is basically the process of bringing risks into an acceptable level so that an organization can respond in a controlled manner.

This first involves the identification and isolation of risks through risk analysis, which in the construction industry may consist of a study of a broad mixture of various technical, business, and socio-political risks that very highly by project and location. Mitigation of risk factors in the construction industry has traditionally been challenging, resulting in many common failures in construction work, including the failure to complete a project adhering to standards or operational guidelines, poor quality of one or more aspects of the project, delays in project completion date, and common cost overruns (Ehsan, Mirza, et al. 16). Because these failures are often costly on many levels, contemporary risk factor mitigation techniques have been developed in order to improve these conditions within the construction industry.

Risk mitigation involves assigning ownership of risks, leaving no risk open-ended or unchecked. This may involve assigning someone within the agency to monitor and address the risk, such as an engineer, construction manager, or agency planner. Some companies may also choose to outsource certain time-consuming or costly risk mitigation projects to third-party companies that are specifically geared to handle certain types of risks, thereby reducing overall costs associated with risk mitigation (Molenaar and Diekmann et al. 5.1).

The risk analysis should be completed in detail prior to completing risk mitigation.