Generally, risk is considered to be a
concept which is difficult to measure.
Uncertainty in cost and risk has always been a complex part of every project. The
purpose of cost analysis is to help decision makers to recognize and represent
different variables affecting investment risk and eventually predict the cost
of the project. The general practice in cost analysis is to divide the project
into smaller cost variables and probabilistically estimate the uncertainty of
each item which ultimately decides the calculation of project cost. However, dependencies
among these items should also be considered otherwise the accuracy of the cost
estimation is jeopardized.
project success is dependent on the careful calculation and organization of uncertainty
and risk. However, uncertainty is usually not effectively calculated during the
analysis of project cost. This paper presents a framework that utilizes the benefit
of Bayesian network (BN) to assist in more accurate estimation of costs, and risk
associated to a project with flexibility regarding changes in circumstances over
time. This paper
considers the trade-offs that may be occur in project risk management, specifically
time, cost and quality. The main goal of this paper is to provide a model which
addresses the overall problems and questions that various project managers
BNs provide a framework for causal modeling
and offer a potential solution to some of the classical modeling problems.
Our paper is a result of the study made
from the paper (Odimabo, Oduoza, & Suresh, 2017). However, the
abstract and ambiguous information has also been extended using various other
sources and softwares.
this paper, a general framework that estimates the costs and the effects of
risk factors in a project by taking both the uncertainty of parameters and the unpredictability
of risks into account is shown.
Project managers use cost analysis in order to make estimates
about the cost of the projects. The difficulty in this type of analysis is that,
when a project becomes complex, there are a lot of items that affects the cost.
Cost analysisalso includes cost uncertainty analysis which helps decision makers
to understand not only the potential funding exposure but also the nature of
risks for a particular project and help to understand possible measure to
mitigate such risks.
The difficulty about project cost uncertainty is that
the dependency between the cost itemsor the effect of cost changes of one cost
item to another is rarely considered. Without considering such factors, there
is always a risk of the over exceeding the initial cost estimation of a
project. Such risk also creates other risks like times delays and performance
issues (Elkjaer, 2000) (Wang, Wang,
& Lai, , 2008).The
success of a project has generally been associated with the achievement of the
goal estimation of time, cost and quality of the project (Atkinson,