Construction material supply risk management using Asian option contracts: the case of a pipeline project

In last decade, the emergence of various risks and hazards in large and infrastructure projects has become a concern for governments and government-affiliated institutions. Thereby, BOT contracts have been set up to prevent these risks at the national level, leaving the design, construction, and operation of the projects with all investments to a foreign or private company. Meanwhile, a multi-phase weighting approach based-collective criteria and DEMATEL methodology is proposed under dynamic intuitionistic fuzzy (DIF) set environment. In this respect, the weight of each criterion is determined by DIF-collective criteria method and also the interdependencies relation between criteria is computed by developed DIF-DEMATEL methodology to tune the criteria weights. In addition, the weights of experts are specified by proposed DIF-utility degree method to reach a precise solution. Moreover, the proposed approach of this study is extended based on last aggregation concept to reduce the data loss. Then, the proposed methodology is implemented to a real case study and also compared with a recent relevant study in literature to ensure the reliability of the results. Finally, a sensitivity analysis is manipulated to find the most effective parameters that can change the obtained results.

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“…Table 4 present the final local calculation standard deviation method weights of the subattributes with Eqs. (19) and (20).…”

Section: Obtained Resultsmentioning

confidence: 99%

“…Moreover, Liu et al [19] manipulated a risk management framework for the BOT bridge construction projects in Istanbul city. Vahdatmanesh and Firouzi [20] analyzed the impact of risk management in the BOT pipeline industry projects in the supply chain in Asian countries.…”

Section: Introductionmentioning

confidence: 99%

An intuitionistic fuzzy multi-class approach for risk assessment in sustainable BOT highway construction projects: A case study

NEZAMI¹,

adlparvar²,

Shahbazi³

2022

Scientia Iranica

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“…In MRG, direct support is designed to alleviate the revenue risk of the concession. With a MRG in place, if the revenue over a specific period falls under the pre-agreed guaranteed amount, the government will reimburse the difference (Vahdatmanesh and Firouzi, 2020).…”

Section: Jfmpc 273mentioning

confidence: 99%

Real options analysis of revenue risk sharing in post-disaster housing reconstruction

Vahdatmanesh

Firouzi²,

Rotimi

2021

JFMPC

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Purpose Post-disaster housing reconstruction (PDHR) demands a considerable percentage of global property investment, yet the post-disaster environment presents intricate challenges to reconstruction financing for governments and at the same time, revenue uncertainty for private investors. The purpose of this study is to develop a methodology for tackling land shortage and the financial challenges of PDHR in the aftermath of a disaster. Design/methodology/approach This study developed a methodology based on a combined minimum revenue guarantee and maximum revenue cap model using a well-established real options analysis (ROA) for revenue risk sharing in PDHR projects and land readjustment (LR) for finance. The applicability of the purported model is demonstrated through an illustrative example. Findings The results show that flexibility in the options could increase the PDHR contractor’s risk profile by increasing the expected value of the contractor investment and reducing the probability of investment loss. On the other side, a cap on the contractor revenue stream would allow the government to benefit from any excess in revenue and would counterbalance the value of the option. Practical implications The framework proposed in this study could serve as a practical risk-revenue sharing in PDHR projects. Governments and policymakers could use the findings to enable the successful delivery of PDHR projects and consequently bring the quality of life of affected people to pre-disaster conditions. Originality/value This study can be considered as a first attempt toward the use of the Australian barrier style options structure, and the trinomial lattice valuation model in PDHR projects, which incorporates LR, public-private partnerships, governmental guarantees and PDHR concepts in one ROA-based framework.

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Evaluation of GBM model performance with barrier options, Asian options and European options based on Tesla

Dong

Xiong

2021

2021 2nd International Conference on Big Data Economy and Information Management (BDEIM)

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Construction material supply risk management using Asian option contracts: the case of a pipeline project

Cited by 3 publications

References 47 publications

An intuitionistic fuzzy multi-class approach for risk assessment in sustainable BOT highway construction projects: A case study

An intuitionistic fuzzy multi-class approach for risk assessment in sustainable BOT highway construction projects: A case study

Real options analysis of revenue risk sharing in post-disaster housing reconstruction

Evaluation of GBM model performance with barrier options, Asian options and European options based on Tesla

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