Risk Management - Subject i am stusying is Construction Management

A single construction project involve lots of people . During times when specific conditions under review has violated any applicable building codes , and its construction means , methods , or practices are below the standard of care in the building industry , controversies arises creating different kinds of viewpoints of those persons involved in the project construction . Builders , developers , contractors , subcontractors material suppliers , product manufacturers , home-owners and home-owners association are just few of those who are involved in creating such construction defect

Construction defects are those issues that threaten not only the design , structural

integrity , conditions and life span of a building but also of people living and working near or inside a particular structure

With those risks involved , it is therefore important in construction management to achieve balance , proper risk identification and risk analysis with the specific contractual , financial , operational and organizational requirements

Risk management process is a formulation of effective risk management strategies to realize the potential impact of construction risk and other associated risks may have on their business operations . With a holistic risk management approach , all of the organization 's business risks will be identified which will lead to a greater probability of risk mitigation or With this , two research s with regards to risk management will be analysed and critiqued . These are Valuing Flexibility in Infrastructure Developments : The Bogota Water Supply Expansion Plan by Natalia Ramirez and Real Options : Dealing with Uncertainty in Systems Planning and Design by Richard de Neufvill

Aims of Research

Neufvill 's (2001 ) purpose of research is for the public and private operators of major systems to come to recognize !r Large classes of projects as much more valuable than they now seem to be -- these include all those that enable further development without committing to it prematurely , such as research , product development , system modularity , exploratory mining , etc . and

r New classes of design alternatives , specifically those enabling managers to adjust the system as needed when relevant information becomes available , that is design alternatives that involve deferral , acceleration and closure of facilities

As a whole , it attempts to develop and present the nature of the effect that real options will have on engineering systems design

On the other hand , Ramirez (2002 ) objective for her research is to improve the understanding of current valuation practices for infrastructure developments . In particular , the thesis seeks to identify the optimal approach for the financial analysis of these projects choosing between the following capital budgeting techniques : Net Present Value (NPV , Decision Analysis (DA , and Real Options Analysis (ROA The comparison will cover both the theoretical advantages and disadvantages of each approach as well as real-life implementation issues that may arise in a particular context . These approaches will be compared in terms of their treatment of uncertainty , their acknowledgement of flexibility , and their usefulness for strategic decision making

In both Neufvill 's and Ramirez ' research aims or objectives , they emphasized and focused on infrastructure developments , although Ramirez is much more detailed by mentioning the financial analysis and capital budgeting techniques...