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Paper Information

Journal:   JOURNAL OF FACULTY OF ENGINEERING (UNIVERSITY OF TEHRAN)   FEBRUARY 2008 , Volume 41 , Number 7 (109); Page(s) 863 To 871.
 
Paper: 

RANKING PROJECT RISKS USING MADM METHODOLOGIES

 
 
Author(s):  JABAL-AMELI M.S., REZAEIFAR A., CHAEI BAKHSH LANGEROUDI A.
 
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Abstract: 

With respect to uncertainties in projects and the need to optimum allocation of resources, Risk management (RM) is considered as an important phase of the project management (PM) process. As well, ranking risk’s (RR) of the project is the critical step of the risk analysis phase in a RM. Risk ranking is the process of prioritizing the risks with the use of some criterions. In most standard methods only two indexes, probability of occurrence and consequence of risks, are being used in the risk analysis and risk ranking. Some other indexes such as “uncertainty of estimates” and “ability to response” have been used by some other researchers. There are both qualitative and quantitative methods to rank different risks of a project. Within this article, various MADM methodologies, as quantitative approaches, are studied in order to rank the risks of the projects. Each MADM methodology has its own limitations and attributes, and the decision maker cannot use them in all decision-making problems. Using MADM methodology to priority different alternatives of a decision problem needs to consider both the characteristics of the chosen methodology and attributes of the problem itself. Despite, reaching to wrong priorities of the alternatives would be unavoidable. Therefore, different MADM methods are studied from point of using them in a RR problem. Appropriate MADM methods for this purpose are discussed in this paper. It is shown that only compensatory methods can be used in a RR problem. Finally, a real world case study, ranking risks of a power plant renovation project, is presented. To solve the problem, four criteria are considered; including probability of occurrence, consequence of risk, ability to response, and uncertainty of estimates. The TOPSIS algorithm is implemented to solve the problem in the case study. It is suggested to implement more studies to find the most suitable MADM method for the purpose of ranking project risks.

 
Keyword(s): DECISION MAKING, RISK RANKING, MADM, PROJECT MANAGEMENT, QUANTITATIVE, RISK MANAGEMENT
 
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