Moving Toward a Probability-Based Risk Analysis of the Benefits and Costs of Major Rehabilitation Projects

by Daniel B. Taylor, Virginia Polytechnic Inst and State, Univ, Blacksburg, United States,
Keith D. Hofseth, Virginia Polytechnic Inst and State, Univ, Blacksburg, United States,
Leonard A. Shabman, Virginia Polytechnic Inst and State, Univ, Blacksburg, United States,
David A. Moser, Virginia Polytechnic Inst and State, Univ, Blacksburg, United States,



Document Type: Proceeding Paper

Part of: Risk-Based Decision Making in Water Resources V

Abstract:

By the year 2010, 77% of the U.S. Army Corps of Engineer's projects will be over 40 years old. The Corps wants to allocate its scarce rehabilitation funds in a cost-effective manner. To do so requires the incorporation of risk in their benefit-cost analysis. This paper details their proposed risk analysis procedures. Problems in developing probabilities of unsatisfactory performance and in analyzing complex systems are pointed out. An example of a simple risk-based benefit-cost analysis is presented. The paper ends by pointing out that making risk-based benefit-cost analysis tractable for field personnel will be a difficult task.

Subject Headings: Risk management | Rehabilitation | Benefit cost ratios | Project management | Probability | Construction management | Construction costs | United States

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