American Society of Civil Engineers


Infrastructure Development and Expansion under Uncertainty: A Risk-Preference-Based Lattice Approach


by Tong Zhao, A.M.ASCE, (Consultant, Delta Consulting Group, Inc., 310 Commerce St., Occoquan, VA 22125. E-mail: tzhao@delta-cgl.com; and Affiliate Researcher, Bridge Engrg. Software and Technol. Ctr., Dept. of Civ. and Envir. Engrg., Univ. of Maryland, College Park, MD 20742) and Chung C. Fu, (corresponding author), F.ASCE, (Dir./Affiliate Assoc. Prof., Bridge Engrg. Software and Technol. Ctr., Dept. of Civ. and Envir. Engrg., Univ. of Maryland, College Park, MD 20742 E-mail: ccfu@umd.edu)

Journal of Construction Engineering and Management, Vol. 132, No. 6, June 2006, pp. 620-625, (doi:  http://dx.doi.org/10.1061/(ASCE)0733-9364(2006)132:6(620))

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Document type: Journal Paper
Abstract: Optimal infrastructure development and expansion decision making requires taking into account contingent expansion decisions and underlying uncertainty, such as demand, during the planning period. Recent publications on life cycle management have used lattice models and Markov decision models to evaluate infrastructure development and management policies. In this paper, a risk-preference based lattice model is presented, and it provides the optimal contingent decisions in terms of a risk preference that can be other than risk neutrality. The proposed methodology is demonstrated in an example involving constructing and expanding a parking garage.


ASCE Subject Headings:
Decision making
Facility expansion
Infrastructure
Lattices
Optimization
Risk management
Uncertainty principles