Modeling Risk Management in Sustainable Construction

417 Pages·2011·3.574 MB·English

by  Maozeng Xu, Qiaoyu Chen, Ligang Cui (auth.), Desheng Dash Wu (eds.)

Computational Risk Management
Series Editors
DeshengDashWu
DavidL.Olson
JohnR.Birge
Forfurthervolumes:
http://www.springer.com/series/8827
.
Desheng Dash Wu
Editor
Modeling Risk Management
in Sustainable Construction
Editor
Prof.DeshengDashWu
UniversityofToronto
RiskLab
Toronto,ONM5S3G3
Canada
[email protected]
ISSN2191-1436 e-ISSN2191-1444
ISBN978-3-642-15242-9 e-ISBN978-3-642-15243-6
DOI10.1007/978-3-642-15243-6
SpringerHeidelbergDordrechtLondonNewYork
LibraryofCongressControlNumber:2010938731
#Springer-VerlagBerlinHeidelberg2011
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Preface
We are living in a risky world, and it is getting riskier and riskier. As one of my
fundamental claims that have been delivered to various audience including scho-
lars, practitioners and government officers, first, risk avoidance system in today’s
worldisbecomingsointerconnected;second,itisfullysupportedbyagreatofrisk
issues thathavebeen addressedinthiseditedvolume.Suchriskissues,tonamea
few,includetypicalfinancialrisksuchascreditriskandmarketrisk,construction
risk management, supply chain risks, energy risk assessment, environmental risk
analysis,riskmanagementandsustainabledevelopment.Theseriskissuesaltogeth-
erformariskchecklistthatcouldsupportmysecondclaim:riskisunavoidableand
businessexiststocopewithrisksintheirareaofspecialization.InWilliamSharpe’s
CAPM(capitalassetpricingmodel)theory,investmentsareevaluatedintermsof
bothriskandreturnrelativetothemarketasawhole;theriskierabusinessstock,
thegreaterprofitpotential.Thusriskimpliesopportunityandbusinessexiststoseek
suchrisk-basedopportunities.
Predictionofextremeriskeventsisalmostunlikely.InTaleb’s2007booktitled
“Blackswan”,extremerisksaresaidtobeunpredictablelikeablackswanthatlies
beyondtherealmofnormalexpectations.Manyfirmsexperienceddifficultiesfrom
blackswanbubbles.Themostspectacularfailureinthelatetwentiethcenturywas
probablythatofLong-TermCapitalManagement[1],butthatwasonlyaprecursor
tothe morecomprehensivefailureoftechnologyfirmsduringthe dot.com bubble
around2001.Theproblemsofinteractingculturesdemonstratedriskfromterrorism
aswell,withnumerousterroristattacks,toinclude9/11intheU.S.
The third claim is that effective risk management needs integration of various
risksfacingtheorganization.NationalResearchCouncilhastworedbooksonrisk
analysis and management: one is from that 1983 titled “Risk Assessment in the
Federal Government: Managing the Process” and the other from 2009 titled “Sci-
ence andDecisions Advancing Risk Assessment”. One ofourobservationsis that
the updated version “Recommends that risk management would become more
integrated with the risk assessment process and focuses attention on improving
theutilityofriskassessmentstobetterinformriskmanagementdecision-making”
v
vi Preface
[2, 3]. Enterprise risk management has been defined as a process that uses inte-
grated, systematic approaches to manage risks that faces the organization. There-
fore,enterpriseriskmanagementhasbeendeemedasaneffectiveriskmanagement
philosophy.
Inthepast,wehavetriedtodiscussdifferentaspectsofrisk,toincludefinance,
informationsystems,disastermanagement,andsupplychainperspectives[4,5,6].
In this edited volume, we present the state-of-the-art views of the perspective of
enterprise risk management, to include frameworks and controls in the ERM
processwithrespecttosupplychains,constructions,andproject,energy,environ-
mentalandsustainabledevelopmentriskmanagement.
The bulk of this volume is devoted to presenting a number of modeling
approaches that have been (or could be) applied to enterprise risk management in
construction from the 1st International Conference on Sustainable Construction
and Risk Management in Chongqing Municipality, P. R China. We include deci-
sion analysis models, auction models to better enable risk managers to trade off
conflictingcriteriaofimportanceintheirdecisions.MonteCarlosimulationmodels
are the obvious operations research tool appropriate for risk management. Rough
Set and fuzzy set theories are employed. Dynamic models such as dynamic AHP
andBayesianNetworksareusedtohandleriskyprojectmanagementwhenachiev-
ing sustainable development purpose. We hope that this book provides some
view of how quantitative models can be applied by more readers faced with
enterpriserisk.
Toronto,ON DeshengDashWu
July2010
References
1. Lowenstein, R. (2000). When Genius Failed: The Rise and Fall of Long-Term Capital
Management.NewYork:RandomHouse.
2. WuD.andOlsonDL.2009.Introductiontothespecialsectionon“optimizingriskmanage-
ment:Methodsandtools,HumanandEcologicalRiskAssessment15(2):220–226.
3. WuD.andJohnsonB.L.2010.HERAemphasizingriskmanagement:Aneditorial,Humanand
EcologicalRiskAssessment.
4. Olson,D.L.andWu,D.(2008a).Enterprise RiskManagement.Singapore:WorldScientific
PublishingCo.
5. Olson,D.L.andWu,D.(2008b).NewFrontiersinRiskManagement.Heidelberg:Springer.
6. Olson,D.L.andWu,D.(2010).EnterpriseRiskManagementModels.Heidelberg:Springer.
Contents
PartI EnterpriseRiskManagementinSupplyChains
AnImprovedApproachforSupplierSelectioninProjectMaterial
BiddingProcurement .......................................................... 3
MaozengXu,QiaoyuChen,andLigangCui
ModelingtheOut-of-StockRiskandtheEOQ–JITCost
IndifferencePoint ............................................................. 11
MinWu
APartnerSelectionMethodBasedonRiskEvaluationUsingFuzzy
SoftSetTheoryinSupplyChain ............................................. 19
ZhiXiaoandWeijieChen
AQuantitativeAnalysisforDegreeofSupplierInvolvement
UnderMarketUncertainty ................................................... 29
Zi-jianZhangandHuaPan
PartII EnterpriseRiskManagementinConstruction
DynamicNetworkPlanningSimulationforSchedulingRisk
AnalysisBaseonHybridSystem ............................................. 39
LinYang,YanlongZhao,andYueyueChen
ResearchontheIntegratedRiskManagementInformation
SystemofConstructionProject .............................................. 47
Yun-liGao
SensitivityAnalysisfortheRelationshipBetweenTollRate
andTrafficVolumeforFreeway ............................................. 55
Lian-yuWei,YiCao,andPeiChen
vii
viii Contents
TheApplicationofDynamicPriorityofAHPonOperationRisk
AssessmentofMetro .......................................................... 65
YunhaoGao,XiuliDu,andMingjuZhang
StudyonConstructionProjectBiddingRiskAssessmentModel ......... 73
GuofengWenandLiwenChen
StudyonProphaseRiskManagementinInformatization
ofChineseConstructionEnterprises ........................................ 81
LuoFu-zhouandWangLa-Yin
ManagingConstructionRiskinSMEs:TheCaseofCoastal
Construction ................................................................... 91
HoseinPiranfar
AStudyonManagementRiskEvaluationSystemofLarge-Scale
ComplexConstructionProjects ............................................. 103
LinlinXieandYuYang
Risk-BasedDeterminationofthePreniumRateofConstruction
WorkSafetyLiabilityInsurance ............................................ 113
HongxiaWang,GuiYe,andChuanjingJu
PartIII EnterpriseRiskManagementinProjects
Multi-criteriaDecisionModelforBOTProjectSelection ................ 123
Min-RenYan
EquitableRiskAllocationinChinesePublic–PrivatePartnership
PowerProjects ................................................................ 131
YongjianKe,ShouQingWang,andAlbertP.C.Chan
DevelopingaConstructionSafetyManagementSystem .................. 139
JianZhangandWengTatChan
AnalysisoftheEquipment’sMaintenancePeriodUnderDifferent
OperationStages ............................................................. 145
JieChiandMiaoChi
AnEvolutionaryGameModelfortheRiskManagementCooperation
AmongtheProjectParticipants ............................................. 153
Guo-junZhangandYun-liGao
Contents ix
ApplicationofIndustrializedHousingSysteminChina:AChongqing
Study .......................................................................... 161
YuhongPan,FrancisK.W.Wong,andEddieC.M.Hui
PartIV EnergyRiskManagement
TheStudyonEnergyConsumptionandPollutantEmission
ofCivilVehiclesinBeijing .................................................. 171
Li-xiangZhao,Yi-longXiong,andFeiYe
AnInvestigationoftheCoalDemandinChinaBasedonVariable
WeightCombinationForecastingModel ................................... 181
GuohaoZhao,ShufenGuo,JingShentu,andYongguangWang
InvestmentCostAnalysisforKeyIndustriesofNewEnergy
BasedonBostonExperienceCurve ......................................... 191
YuanyingChi,BenkunChi,XiangyangLi,andDongxiaoNiu
PartV EnvironmentalRiskManagement
GreenAdaptiveReuse:IssuesandStrategiesfortheBuilt
Environment .................................................................... 199
CraigLangston
RiskAssessmentofRegionalIndustrialClusters .......................... 211
YonghengFangandZhoupingJia
SubwaySystemSafetyRiskAnalysisBasedonBayesianNetwork ...... 219
YingLu,QimingLi,andJimmieHinze
Eco-EfficiencyAssessmentfortheEco-IndustrialParkBased
ontheEmergyAnalysis ...................................................... 229
HuaShangandJiaboLi
TheStudyofGreenRiskAssessmentforConstructionProject
Basedon“AHP–FCE”Method ............................................. 237
DanfengXie,ShurongGuo,andSuleiLi
IntensiveLandUseEvaluationofUrbanDevelopmentZones:
ACaseStudyofXi’anNationalHi-TechIndustrialDevelopment
ZoneinChina ................................................................ 245
WeiXiaoandQingqiWei
x Contents
IndustrialPlanning,Macro-economicControlandGovernment’s
RoleinthePerspectiveofEconomicCrisis ................................ 251
BoCaoandYangYu
EvaluationandSimulationforEcologyRiskofUrbanExpansion
BasedonSERAModel ....................................................... 259
XiaoxiaShi,YueWu,andHanZhang
PartVI FinancialRisk
TheGerber–ShiuDiscountedPenaltyFunctionfortheCreditRisk
ModelwithDependentRatesofInterest ................................... 269
DanPengandZaimingLiu
ARisk-SensitivityAnalysisonNPVModelofInvestmentProjects ...... 277
XianshengQin,XuyaoMa,andHongweiBai
ResearchonAppraisalofHigh-TechEntrepreneurialRisk
BasedonOsculatingValueMethod ........................................ 283
Yan-RongWangandQiao-LingXu
AnApproachtoOverseasIronOreInvestmentRiskAssessment
BasedonFuzzyNeuralNetwork ............................................ 293
LiGuo,CaiwuLu,andZhenYang
AnalysisonStructureRiskandItsCountermeasuresofInternational
TradeCorridorinInlandChina ............................................ 301
Xiao-dongXie,Mao-zengXu,Shun-yongLi,andLiHuang
PartVII SustainableRiskManagementTools
AsphaltPavementSurfacePenetrateRejuvenateRestore
Technology:ApplicationandEvaluation ................................... 313
XiaohongGuoandBangyinLiu
AStudyofConstructionProjectConflictManagementBased
onEvolutionaryGameTheory .............................................. 321
JieDing
StudyontheManagementMechanismofEmergency
TelecommunicationinChina ................................................ 327
ZhenyuJin,XiaoyuWan,andXingmingYang