Authors: Brokbals, Stefanie
Wapelhorst, Vincent
Čadež, Ivan
Title: Calculation of risk costs in construction projects
Other Titles: empirical analysis of construction risks applying the Monte Carlo method
Language (ISO): en
Abstract: As early as 1971, Schubert made a first contribution to the consideration of risks during the execution of construction projects. In addition to that, he was first to introduce elements of the risk management process to the construction management literature in Germany. By the use of an empirical study of the probability of risk occurrence and the cost amount by risk occurrence, Schubert made among others a statement about the importance of the risks depending on the amount of the risk costs. In an updated study for building construction projects with construction costs ≤2.5 million € and unit price contracts applying the VOB/B primarily the altered risk evaluations are shown; it needs to be emphasized that the sum of the determined risk costs corresponds to Schubert's results. Furthermore, with a variation of the characteristic attributes (response options) of the probability of risk occurrence and the cost amount by risk occurrence, it can be displayed that the risk costs during the execution of building construction projects are even considerably higher. Additionally, a probabilistic risk cost calculation — applying the Monte Carlo method — is used to reveal the bandwidth of risk costs. It can be pointed out that the risk costs range between 2.71% and 8.67% of the construction costs. The results could serve as a benchmark for contractors during the tender calculation to determine the amount of risk costs depending for example, on the market situation, the company-specific risk disposition as well as strategic considerations.
Subject Headings: Construction risks
Cost estimation
Monte Carlo method
Risk costs
Risk management
Subject Headings (RSWK): Bauvorhaben
Issue Date: 2019-08-10
Rights link:
Appears in Collections:Lehrstuhl Immobilienwirtschaft und Bauorganisation

Files in This Item:
File Description SizeFormat 
cend.201900014.pdf946.18 kBAdobe PDFView/Open

This item is protected by original copyright

This item is licensed under a Creative Commons License Creative Commons