DEVELOPING A TOOL FOR PROJECT CONTINGENCY ESTIMATION IN A LARGE PORTFOLIO OF CONSTRUCTION PROJECTS
Keywords:project management, contingency, project risk, neural network
To enable the management of project-related risk on a portfolio level in an owner organisation, project contingency estimation should be performed consistently and objectively. This article discusses the development of a contingency estimation tool for a large portfolio that contains similar construction projects. The purpose of developing this tool is to decrease the influence of subjectivity on contingency estimation methods throughout the project life cycle, thereby enabling consistent reflection on project risk at the portfolio level. Our research contribution is the delivery of a hybrid tool that incorporates both neural network modelling of systemic risks and expected value analysis of project-specific risks. The neural network is trained using historical project data, supported by data obtained from interviews with project managers. Expected value analysis is achieved in a risk register format employing a binomial distribution to estimate the number of risks expected. By following this approach, the contingency estimation tool can be used without expert knowledge of project risk management. In addition, this approach can provide contingency cost and duration output on a project level, and it contains both systemic and project-specific risks in a single tool.
How to Cite
LicenseAuthors who publish in the Journal agree to the following terms:
- Authors retain copyright and grant the Journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this Journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the Journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this Journal.