Selecting Appropriate Risk Response Strategies Considering Utility Function and Budget Constraints: A Case Study of a Construction Company in Iran

Abstract

Successful implementation of construction projects worldwide calls for a set of effective risk management plans in which uncertainties associated with risks and effective response strategies are addressed meticulously. Thus, this study aims to provide an optimization approach with which risk response strategies that maximize the utility function are selected. This selection is by opting for the most appropriate strategies with the highest impact on the project regarding the weight of each risk and budget constraints. Moreover, the risk assessment and response strategy of a construction project in Iran as a case study, based on the global standard of the project management body of knowledge (PMBOK) and related literature, is evaluated. To handle the complexity of the proposed model, different state of the art metaheuristic algorithms including the ant lion optimizer (ALO), dragonfly algorithm (DA), grasshopper optimization algorithm (GOA), Harris hawks optimization (HHO), moth-flame optimization algorithm (MFO), multi-verse optimizer (MVO), sine cosine algorithm (SCA), salp swarm algorithm (SSA), whale optimization algorithm (WOA), and grey wolf optimizer (GWO). These algorithms are validated by the exact solver from CPLEX software and compare with each other. One finding from this comparison is the high performance of MFO and HHO algorithms. Based on some sensitivity analyses, an extensive discussion is provided to suggest managerial insights for real-world construction projects.

Keywords

• risk management
• optimization
• utility function
• risk response strategies
• construction projects