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Title:

INTEGRATION OF FINANCIAL AND CONSTRUCTION RISKS: A SIMULATION APPROACH

Accession Number:

00675300

Record Type:

Component

Availability:

Find a library where document is available


Order URL: http://worldcat.org/isbn/0309060583

Abstract:

A general approach for quantifying construction and financial risks of a major capital transit project was developed. The methodology relies on Monte Carlo simulation. The technique was used to estimate the probability of time and cost overruns in construction projects. The value of integrating both financial and construction risks into such an analysis was emphasized because these risks are interrelated and, in many cases, cannot be separated. When the two sources of risk are examined in isolation, there is the possibility that some risks at the intersection may be omitted or double counted. With an integrated approach, however, the potential impact of project cost overruns can be assessed consistently and completely. The proposed methodology can be used by the planners and owners of capital transit projects to help them decide on the levels of funding needed to meet construction and design costs, given various uncertainties. Rather than providing a safety factor to guard against unfavorable scenarios, the simulation approach allows the planner to define a consistent confidence level in regard to achieving project objectives. The approach is illustrated with an example involving a hypothetical capital transit project.

Supplemental Notes:

This paper appears in Transportation Research Record No. 1450, Pricing, Economic Development, Cost Analysis, Transportation Impacts, and Transportation Management Processes. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved

Monograph Accession #:

01401282

Language:

English

Authors:

Touran, Ali
Bolster, Paul J

Pagination:

p. 15-22

Publication Date:

1994

Serial:

Transportation Research Record

Issue Number: 1450
Publisher: Transportation Research Board
ISSN: 0361-1981

ISBN:

0309060583

Features:

Figures (3) ; References (10) ; Tables (3)

Uncontrolled Terms:

Capital projects

Old TRIS Terms:

Subject Areas:

Finance; Highways; Public Transportation

Files:

TRIS, TRB, ATRI

Created Date:

Mar 17 1995 12:00AM

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