Analysis of the probabilistic cost variation ranges according to the effect of core quantitative risk factors for an overseas plant project: Focused on a Middle East gas plant project
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The purpose of this study targets overseas gas plant construction projects with the aim of analyzing the probabilistic cost variation range with consideration of the effect of core quantitative risk factors. C-Project, which is expected to be completed by a domestic construction company in country U, was thus selected as the subject of analysis. By interviewing experts through survey questions, the core quantitative risk factors for the engineering, procurement, and construction phases were derived. Based on these risk factors, the cost variation range, which is caused by the risk factor effects on project cost, was analyzed. Monte Carlo simulation was applied to this quantitative cost variation result, and the probabilistic cost variation range was assessed. The summarized results of this study are as follows: The probabilistic cost variation range for each phase, with consideration of the effect of core quantitative risk factors, is: an engineering cost of -1.95% to 2.49%, procurement cost of -3.07% to 3.91%, construction cost of -2.99% to 3.80%, and a total project cost of -2.58% to 3.50%. The analysis model and analysis result from this study can be used as decision-making tools to help minimize the economic loss resulting from the effect of risk factors during the overseas plant construction process.
Keywordsprobabilistic cost variation ranges quantitative risk factors overseas plant project monte-carlo simulation triangular distribution
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