Project selection considering risk

A number of procedures have been formulated in recent years for evaluating engineering, procurement and construction projects based on an established set of objectives. These procedures, however, have generally considered either multi-objectives without the risk associated with each objective or a single objective with some form of risk assessment. Decision aid methodologies that permit the consideration of both multi-objectives and risk have generally been associated with complex mathematics and high computational effort. The purpose of this paper is to present a simple, yet comprehensive methodology for the selection of a project under risk, avoiding time consuming analyses. The method considers multi-objective decision criteria and takes into account the uncertainties associated with each individual objective. The method is based on multi-attribute utility theory for modelling the selection criteria and treats uncertainty in a similar way to that used in Program Evaluation and Review Technique (PERT). A numerical example is presented to demonstrate the application of the present method.