Developing a Project Portfolio Selection Model for Contractor Firms Considering the Risk Factor

Abstract

Regarding to the high importance of project selection in the project life cycle, solving bid/no-bid problems, especially in the construction industry, is a subject of most recent research. Portfolio selection has been the most interesting area in the last two decades in management research but there is poor investigation in the construction industry. Taking into account the risk, which is inherent in the construction industry and especially in the project selection phase is inevitable. This paper intends to propose a model for project selection and developing two main concepts including company portfolio and risk. The main innovation of this paper is presenting a new framework, which attempts to optimize project selection based on the endurable risk level of a company with regard to the existing portfolio. Considering the user-friendly characteristic of the model, this paper has applied the fuzzy multi criteria decision-making approaches. Finally, the model is implemented in a real case study.

Risk Management in Construction Projects

“…It includes maximisation of the probability and consequences of positive events and minimisation of the probability and consequences of events adverse to project objectives. High importance of project selection in the project life cycle while solving bid/no-bid problems, especially in the construction industry, have been analysed by Abbasianjahromi and Rajaie (2012). Risk can be analysed with the help of the following methods: based on fuzzy TOPSIS bid/no-bid model (Ravanshadnia, Rajaie 2013); in fuzzy environment, applying TOPSIS-F method (Tamošaitienė et al 2013); based on intelligent agents (Smeureanu et al 2012); RAMCAP (Risk Analysis and Management for Critical Asset Protection) by introducing new parameters that affect risk value (Yazdani et al 2011);and Fuzzy Synthetic Model (Abdul-Rahman et al 2013).…”

A state-of-art survey on project selection using MCDM techniques

“…2). In many cases, researchers have considered uncertainty in the form of fuzzy or interval data and proposed more sophisticated method for ranking projects (Abbasianjahromi & Rajaie, 2012;Daneshvar Rouyendegh & Erol, 2012;Hashemkhani Zolfani et al, 2015). We hope this survey could shed light into the applications of MCDM techniques for project selections.…”

Contractor management performance evaluation model at prequalification stage

“…Resource management: Resource management is one of the most important ingredients for competitiveness and profitability in today's construction industry (Abbasianjahromi & Rajaie, 2012;Dolan, Saba, Jackson, & Schuler, 2002). In order to control costs, equipment and labor must be utilized in the most efficient way possible.…”