Risk Analysis Between Possible And Probable
Free (open access)
M. El-Cheikh, A. H. C. Chan & J. Lamb
Risk analysis is essential to successful risk management plans and to the best accomplishment of mega construction projects. Probability and possibility theories are the main approaches in analysing risks. However, each theory has its own assumptions, inputs and outputs. This study looks in detail at these two theories and presents an analytical argument to explain the probable concept as a special case of the possible context by considering that a probability percentage is the chance of one possible outcome to occur among several limited possible outputs. Simultaneously, it presents a simple evaluation of Monte Carlo simulation as the main application of the probability theory, and fuzzy sets applications as one of the main applications of possibility theory. In addition, this study also considers whether the risk is probable or possible. Determining the reason behind this uncertainty will definitely help in assigning the proper theory, whether it is probability or possibility, in the decision making stage. Furthermore, and even when a decision is built on the probability theory, the existence of other outcomes should always be considered. This research aims to fill in a few missing gaps in the risk analysis system in order to deliver an improved analysis. The authors argue the high importance of characterizing risks according to their sources so that the expert will be able to classify the risk as either a probable or possible risk in order to be able to choose the theory on which the decision should be based. Keywords: risk analysis, qualitative risk assessment, quantitative risk analysis, risk management, possibility theory, probability theory, fuzzy set theory, fuzzy logic, construction project. 1 Introduction Risk analysis remains one of the biggest concerns for most project managers. This process requires expert knowledge to identify the potential risks and then
risk analysis, qualitative risk assessment, quantitative risk analysis,risk management, possibility theory, probability theory, fuzzy set theory, fuzzylogic, construction project.