Quantitative and qualitative risk in EPCM projects using fuzzy set theory

The importance of risk management for engineering, procurement and construction management (EPCM) projects has been progressively recognized over the last two decades. Researchers and practitioners alike introduced a wide range of methods to analyze and evaluate risks. Several methods were developed using fuzzy set theory in view of its capabilities for modeling projects risk quantitatively and qualitatively, which assists in providing more representative modeling and evaluation of project risk. This research focuses on fuzzy set theory and presents a methodology to analyze the risks associated with EPCM projects quantitatively and qualitatively. The proposed method implements a linguistic representation for risk which gives experts the choice to evaluate the risk linguistically or numerically based on their experience. The proposed method also presents a systematic procedure to convert the linguistic evaluations into numerical evaluations. The converted numerical evaluations should be aggregated using a screening procedure, based on several rules implemented by users, in order to combine the numerical and linguistic evaluations. This combination uses the arithmetic operations of fuzzy set theory in order to calculate the fuzzy mean of identified components of risk (e.g. each risk has one fuzzy representation). The generated fuzzy evaluations of risk are also deffuzzified using one of the defuzzification methods (e.g. Center Of Area) commonly used in literature. A case example is presented to investigate the effectiveness of proposed method followed by a discussion of results and conclusions.