A multi-objective optimization and fuzzy prioritization approach for project risk responses selection

Risk response development is the weakest part of the project risk management process; consequently many companies fail to gain the full benefits of risk management. This paper proposes an optimization model that integrates the project work breakdown structure, risk events, risk responses and their effects into a practical framework. This model minimizes total expected loss, which consists of four components: abatement actions costs, expected time loss, expected cost loss and expected quality loss. We use a fuzzy prioritization approach for calculating the coefficients of the objective function. The model can measure consistency index for the fuzzy pair-wise comparison matrix. An exact method and a heuristic algorithm are proposed in order to solve the model. Furthermore, a case study in power plant projects is presented to show the applicability and performance of the model.