Proactive risk management in construction

[Name of the Institute]

Proactive risk management in construction

Introduction

Risk Management is a structured approach to managing uncertainty related to a threat, through a sequence of human activities including risk assessment, developing strategies to manage and mitigate risk using managerial resources. From the criticality of the risk estimated to be answered the following questions:

Can we eliminate the risk? and if not

Can we reduce the likelihood of occurrence? and if not

Can we reduce the impact on costs / the time / Performance?

On the overall portfolio risk identified, 80% are eliminated or are an acceptable level of criticality for the project (Frenkel, 2005). These will be covered including a contingency provision for pooling risk coverage and integrated investment budget of the project. These contingencies are usually estimated either by experience provisioning a percentage of investment cost and possible increases of time, either by a statistical method using a quantitative analysis of Monte Carlo example.

Discussion

The objective of proactive risk management is to reduce different risks related to a preset level to a level accepted by society. Thus, business risk management is a process conducted by the board of an entity's management and staff of the entity. It is applied in establishing enterprise-wide strategies designed to identify potential events that may affect the entity and manage risk to provide reasonable security and integrity regarding the achievement of objectives.

The quantification of damage in the construction of great complexity due to the necessary mobility that characterizes the activity. Although the basic procedures are more or less the same, change the location, topographical and geological conditions and the type of equipment to be used. Therefore, engineering evaluation is of fundamental importance in determining the likelihood of accidents and their potential costs. It is clear that the greater the experience of the builder greater the certainty with which one can make projections.

Risk Analysis in Construction Industry

The construction industry is an industry that has both substantial risks (project-specific risks, high demand volatility, etc.), but also has traditional risks. It has often a relatively poorly developed risk management. Risk analysis can be done by following a logical process starting with a phase identification and risk assessment and then manage them, analyze and implement the actions of withdrawal, reduction to control the residual risks.

First, it is necessary to note that pure risk analysis for the construction industry must consider the various events that can ...