Risk assessment of international construction projects using the analytic network process

Abstract

In this study, an analytic network process (ANP), which can handle the interrelations between risk related factors, is proposed as a reliable technique for measuring the level of risk associated with international construction projects. Within this context, ANP is used to derive the relative priorities of risk factors as an input to a decision support tool, which can be utilized during bidding decisions. The decision support tool may help a decision maker to estimate the level of risk so that alternative projects may be ranked with respect to their risk levels and appropriate contingency values may be defined after a bid decision is given. The tool has a database in which risk information of the rated projects can be stored for future use. The reliability of the tool was tested on eight real cases and satisfactory results were achieved in estimating the risk level.