Decision making under conditions of risk and uncertainty

Abstract

Purpose : the author conducts a grouping the sources of risks in the implementation of construction projects, also determines the consequences and determines the optimal method of decision-making in conditions of uncertainty. Discussion : uncertainty and risks shape the environment for implementing projects in construction. Its assessment is complex and multifactorial, the unknown initial parameters do not allow us to predict the final result, which creates risk and reduces the investment attractiveness of the project. Timely identification of risk sources and appropriate management decisions will help to maintain a balance of bilateral cooperation between stakeholders in the flow of time and at all stages of the project lifecycle. Results : the author considers risk and uncertainty as elements that form the environment for the implementation of a construction project. The author has grouped the sources of risks, considered their impact on the project implementation process, and identified a group of force majeure risks that occur in today's conditions. The author considerd the possibility of reducing the uncertainty level in making management decisions by using flexible planning methods, which are presented as a step-by-step tool for managing a construction project under conditions of risk and uncertainty. In addiction the author proposed a theoretical basis to clarify the source of possible problems, planning probabilistic solutions on the construction site by using certain management methods that allow flexible adaptation of the project and its successful implementation.