Research On Risk Management Of Construction Projects Cost Control

Strengthening the cost control of construction project is the basic way to reduce thecost and improve the business effect. However, there are many factors would affect thecost control, which would increase the difficulties of cost control. Therefore, we shouldfind out those risk factors which would affect cost control through rigorous analysis ofrisk factors. And then, risk coping strategies should be put forward avoiding thosepotential risk factors to eliminate cost overruns and then improve the economic benefitsof construction enterprises. Therefore, cost control and risk management are beingconsidered comprehensively in this paper, corresponding risk coping strategies are putforward to control the cost through factors identification、factors evaluation and factorssimulation.Through the analysis of research conditions home and abroad, following problemsare being considered. At first, cost control theories and risk management theories arebeing exploited together. Cost control of construction projects and risk management ofcost control are formulated combining with characteristics of construction projects.According to large sums of practical engineering experiences and literature references,there are mainly twenty-three risk factors which would affect the cost control in theconstruction projects are listed. Influencing data of such twenty-three risk factorsprovided by specialists from this career is collected through questionnaires. And then,SPSS software is employed in factor analysis on these data, in which principalcomponent analysis is viewed as the main method to reshuffle those risk factorsaccording to different properties. Finally, seven major types of risk factors areidentified. What’s more, several kinds of staple methods of risk evaluation quantitativeanalysis are introduced, including Analytic Hierarchy Process、Fuzzy ComprehensiveEvaluation、Sensitive Analysis and Monte Carlo, and their applying features are alsodescribed briefly. Combining with the case analysis, overall risk conditions of costcontrol are analyzed through AHP and FCE. Computer simulation technique isformulated in the paper, the application instructions of Crystal Ball Monte CarloSimulation software is also briefly described. Considerate the cost conditions of realcases, Crystal Ball is employed in the risk simulation on the four separate projects.Corresponding risk coping measures are concluded, there are mainly four methods tocontrol the risk. They are risk avoidance, risk transfer, loss control and risk retention.