INTERNATIONAL JOURNAL Of ACADEMIC RESEARCH Vol. 3. No. 1.

January, 2011, Part II

RISK ASSESSMENT OF CONSTRUCTION PROJECTS

USING NETWORK BASED ADAPTIVE FUZZY SYSTEM
1* 2
Mehdi Ebrat , Reza Ghodsi
1
Department of Industrial and Mechanical Engineering, Qazvin Islamic Azad University
2
Department of Industrial Engineering, College of Engineering, University of Tehran (IRI)
*Corresponding author: mehdi.ebrat@gmail.com

ABSTRACT

The main aim of this paper is determining the key risk factors of construction projects in Iran and
developing an intelligent system to assess them. In this research, first the risks involved in construction projects
has been identified and arranged in a systematic hierarchical structure. Questionnaire surveys and literature review
were used for data collection. Next, based on the obtained data a network was based on the adaptive fuzzy system
has been designed for the evaluation of project risks. The results show that the ANFIS models are more promising
in the assessment of construction projects risks. The designed adaptive fuzzy system can learn from experience
and past knowledge, can induce knowledge to future conditions by learning and updating itself and it can be
applied to quantitative and qualitative factors.

Key words: risk evaluation, construction projects, project planning, fuzzy systems, neural network.

1. INTRODUCTION

Construction projects have numerous risks due to different factors such as weather changes, cultural
differences of involved people, instability in politics, possibility of governmental policies changes, and financial and
economical issues. The number and importance of such risks depend on the size and complexity of the project.
These risks lead to costs and time overruns in construction projects (Zavadskas et al, 2010). Construction projects
in macro scale have risky factors. Obviously during decision making all aspects of work are not known. Therefore,
the potential risks that can influence the results should be considered.
The nature of construction projects accompanies with imposed uncertainties and depends on the person’s
thinking prototype in the process of risk analysis. This issue prevents the application of many of risk evaluation
methods. The fuzzy inference technique is very useful in tackling the complex problems which have not defined
well. For instance, Tah and Carr (2000) have applied fuzzy logic in risk assessment of construction projects.
Another research in risk evaluation of construction projects is paper by Kuchta (2001). He by use of fuzzy numbers
has assessed the risks of construction projects. As another example, Baloi et al (2003) have used sets in the risk
management. Zheng and Ng (2007) using fuzzy set theory, have evaluated the performance of cost and time in
management of construction projects, risk management and utilization.
Tah and Carr (2000) have used from hierarchical break down structure representation of risk to form a
model for qualitative risk evaluation of construction projects. They have used the common language of explanation
of risks based on probabilities and influences. They presented the relations between risk factors, risks, and their
outcomes in form of causality diagrams by using fuzzy sets. Dikmen et al (2007) have presented a fuzzy
methodology for assessment of risk for international construction projects. Their proposed methodology uses the
influence diagrams for creating the risk model and uses a fuzzy risk assessment approach for estimation of risk
priorities based on costs excess of budget. Lee and Lin (2010) in their research have introduced a novel method
for fuzzy risk assessment. Their method uses was using directly the fuzzy numbers instead of using linguistic
variables for evaluation of risks. Zeng et al (2007) have used the concept of fuzzy inference for stating the
uncertainties and AHP method for creating structure and prioritizing of different factors risks included in the
construction projects. Wang and Elhag (2007) have used grouped fuzzy decision making approach for assessment
of risks in bridge construction project. Chen and Wang (2009) have used the fuzzy AHP method for evaluation of
risks within global construction projects. However, in their work, some defects related to not considering the
experts’ mistakes in giving their opinion can be seen. Artificial intelligence techniques can have broad applications
in risk management. Neural networks and fuzzy modeling are two systemic patterns which can be used in this field
well. Neural networks can be viewed as the black box in processes which are not known but there are many
observations and data regarding to this. On the other hand, fuzzy models can be viewed as white box in which
human knowledge can be used for modeling the system with no need to data. Many of problems in the real world
have the gray status which both observations and human knowledge are accessible. A new technique called
neuro-fuzzy can combine the concepts of neural network with fuzzy inference systems to create an efficient method
which is known nowadays as soft computing. Three main features of comparative systems than to other methods
of risk evaluation are as follows:
 Monitoring the organization in order to finding of risk
 Flexibility in reaction to risk
 Comparative Learning ability of organization resources in reaction to risk
The first study in neural network in the risk literature is work done by McKim (1993). He used the neural
network for identification risk. Wenxi (2007) used back-propagation neural network (BP neural network) algorithm
for assessment of risks in the highway management corporations in China. Wenxi and Danyang (2009) used neural

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fuzzy network for risk evaluation of highway corporations in China. Their model to some extent can facilitate the
process of decision making and reaching the optimum solution for managers. Elhag and Wang (2007) presented
an application of artificial neural networks in bridge risk assessment, in which back-propagation neural networks
are developed to model bridge risk score and risk categories. Wang and Elhag (2008) developed an adaptive
neuro-fuzzy system (ANFIS) using 506 bridge maintenance projects for bridge risk assessment.

2. RISK FACTORS IDENTIFICATION

As mentioned, in this research, by use of literature review and combining of it with field survey, we will
identify different risks of construction projects. Many researches are done on identification and evaluation of risks of
construction projects. The best example of research on risk factors identification, Assaf and Al-Hejji (2006)
mentioned the risk factors as the delay factors in construction projects in Saudi Arabia. One of the comprehensive
researches done on identification of risk factors is of Saqib et al (2008). They introduced 77 factors as risks in
construction projects in Pakistan.
After the above literature review, the following risks are identified: break-down structure can be proposed
that is comprehensive and has the least overlap between different factors. Diagram 1 shows this structure.

3. DATA COLLECTION

The knowledge data base includes knowledge of 100 managers and experts in the field of construction
projects. As this knowledge is usually stated linguistically, to convert this knowledge to data and variables which
are able to be processed in fuzzy systems, a preprocessing is required.

Diagram 1. Risk breakdown structure of construction projects

As mentioned, in collection of initial data, the questionnaire was used in which experts stated their
opinions as the probability of occurrence of risks and the severity of risk in the form of 5-choice scale of (very
unlikely, unlikely, even, likely, very likely) and (very low, low, medium, high, Catastrophic), respectively. As well as
data related to probability of occurrence and risk severity, we need to data of risk value of each factor. For
obtaining the value of risk for each factor (in terms of a linguistic variable), we use the table of fuzzy values
originated from PMBOK (version 2004). Table 1 shows the fuzzy values of risk. As can be seen, risk is a function of
probability of occurrence and its severity.

Table 10. Risk matrix

Severity
Very low low Medium High Catastrophic
Probability

Very Unlikely Low Low Medium Significant Significant

Unlikely Low Low Medium Significant High
Even Low Medium Significant High High
Likely Medium Significant Significant High High
Very Likely Significant Significant High High High

By use of this technique, data of probability of occurrence, severity, and risk of each factor are gathered in
form of linguistics data. In the next step, these data should be converted to fuzzy data. In conversion of linguistic

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data to fuzzy data, triangular fuzzy numbers have been used. The fuzzy values of each of these linguistic variables
in term of probability of occurrence, severity, and risk have been shown in Table 2. Also, graphical diagram of fuzzy
data has been indicates in this table as well.
After converting the linguistic variables into triangular fuzzy numbers, the center of area (COA) method
(Zhao and Govind, 1991) was performed for defuzzifying the triangular fuzzy numbers into corresponding best non-
   a , a , a  shows a triangular fuzzy number, its
fuzzy performance (BNP) values. In the BNP method, if A l m u
deterministic value is calculated from Equation (1).
( au  al )  (am  al )
A +al (1)
3

Table 11. Linguistic values and fuzzy values of the probability, severity, and risk

Linguistic value Fuzzy value Graphical presentation

Linguistic variables (probability of risk occurrence) veryunlikely unlikely even likely verylikely
1
Very Unlikely (0, 0.125, 0.25)
Unlikely (0.05, 0.275, 0.5) 0.8

Degree of membership
Even (0.25, 0.5, 0.75) 0.6

Likely (0.5, 0.725, 0.95) 0.4

(0.75, 0.875, 1) 0.2

Very Likely 0

0 0. 1 0.2 0. 3 0. 4 0.5 0. 6 0. 7 0.8 0. 9 1

probability

Linguistic variables (severity of risk occurrence) very little little medium high catasrophic
1
Very Little (0, 1.25, 2.5)
Little (0.5, 2.75, 5) Degree of membership
0.8

Medium (2.5, 5, 7.5) 0.6

High (5, 7.25, 9.5) 0.4

(7.5, 8.75, 10) 0.2

Catastrophic 0

0 1 2 3 4 5 6 7 8 9 10
severity

Linguistic variables (risk value) low medium significant high

Low (0, 0.165, 0.33) 1

Medium (0.05, 0.355, 0.66) 0.8

Degree of membership

Significant (0.33, 0.64, 0.95) 0.6

(0.66, 0.83, 1) 0.4

0.2

High
0

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

riskoffactor10

By doing these steps for all 100 experts, the knowledge data base of this fuzzy system for evaluation of
risks of construction projects is created.

Risk Assessment
As mentioned, the goal of quantitative risk analysis is the numerical analysis of probability of occurrence
of each risk and its outcomes on project objectives. Based on this definition, the value of each risk is a function of
probability of occurrence of risk and severity and effect of that on project objectives. Hence, in systematic design of
fuzzy systems by neural network, we consider the probability of occurrence of risk and its severity as the inputs of
system and the value of risk as the output of system to be able to measure the quantity of risk. Diagram 2 shows
this fuzzy system as schematic presentation.

Diagram 2. Proposed fuzzy system for risk assessment

In despite of positive points that this system have, one of shortcomings is that there is not a systematic
method for design of fuzzy systems. Hence, in this paper, we will use a neural network based method for design of
fuzzy systems. This type of fuzzy systems was introduced by Jang (1993). These systems are designed
intelligently and based on on-hand data. Intelligent design of these systems originates from this fact that system
parameters and fuzzy rules are estimated by neural network intelligently. In other words, neuro-fuzzy system

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solves the problem of TS and fuzzifier and defuzzifier systems. As mentioned, this problem is that there is not a
systematic design method. Also, neuro-fuzzy can interpret the human knowledge in a mathematical formulae well.
In continue, we will explain neuro-fuzzy systems and their parts in detail.
In neuro-fuzzy systems, for determining the relation between inputs and outputs, there are 2 algorithms,
hybrid learning and error back-propagation. The neuro-fuzzy systems use learning of neural network for
determination of input and output spaces. The most important problem of this system is the long time that these
systems need to be trained. In fact, neural network leads to ability of learning in fuzzy systems. We will explain the
way that a based on Sugeno neuro-fuzzy system works. As mentioned, in Sugeno system, the results of each of
fuzzy rules are in a linear function form (Takagi and Sugeno, 1985). This linear relation is in 2 forms of first order
and zero order. In the second form, this linear relation becomes a constant number. Finally, outputs of each of
rules are summed in the weighted manner. In this system, 2 inputs are used. The linear relation between these
inputs would be:
if  x is A1  AND  y is B1  THEN  f1  p1 x  q1 y  r1  (2)
Here, x and y are numerical inputs while A and B are numerical variables. These variables are identified
by membership functions. Also, p, q, and r are parameters that determine the relation between input and output.
This system formed by five layers which is shown in Diagram 3.

A1
x y

A2
w1 w1


B1 
w2 w2

x y
B2

Diagram 3. Neuro-fuzzy system with two inputs and one output

The first layer: this layer indicates how much each numerical input belongs to different fuzzy set. The
output of the first layer is calculated by equation (3).
Oi   Ai ( x ) ; i  1, 2;
 (3)
Oi   Bi2 ( y ) ; i  3, 4;
Where,  A ( x) and  B ( y ) are the membership functions for fuzzy sets of A and B.
i i

The second layer: in this layer, operators” AND“ and “OR“ are used for achieving the output which is
called firing strength. This value determined how much a special rule is true in different values of inputs. The
output of this layer or firing strength is obtained by multiplying of the earlier results. These outputs are shown by w
which can be calculated by equation (4).
Oi  wi   Ai ( x ). Bi ( x ) ; i  1, 2 (4)
The third layer: in this layer, each of the outputs of the previous layer is divided to all of outputs of that rule
(equation (5)).
wi
Oi  wi  (5)
 wii
The forth layer: in this layer, involvement of each rule for calculation of model output is computed by
equation (6).
Oi  wi fi  wi  pi x  qi y  ri  ; i  1, 2 (6)
Here, wi is the output of the previous layer.
The fifth layer: this layer is named as output layer. In this layer, the outputs of the previous neurons are
summed with each other and finally, by defuzzification, fuzzy outputs are converted to numerical outputs. Equation
(7) shows how this conversion is done.
w1 f1  x, y   w2 f 2  x, y  w1 f1  w2 f 2
f  x, y    (7)
w1  x, y   w2  x, y  w1  w2
In this state, the network learns the rules based on the supervised learning rules. Now, the neural network
should be trained that each of values of a, b, c, p, q, r changes and finally, the best values for parameter are
obtained. With assumption a, b, and c are constant, equation (8) would be,
f  w1  p1 x  q1 y  r1   w2  p2 x  q2 y  r2 
f   w1 x  p1   w1 y  q1  w1r1   w2 x  p2   w2 y  q2  w2 r2 (8)

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Here, the least square method is used to obtain the best parameters. If the membership functions of
inputs are unknown as well, the solution space would be very large and convergence will take more time. This
needs a forward step and backward step. In the forward step, errors are calculated and in the backward step,
operations are done on the parameters.

Performance evaluation
In the previous sections, we explained how to create different units of fuzzy inference system for risk
assessment of construction project in great details. In this section, we explain how risk is going to be assessed and
how performance evaluation of system is designed. To do so, as an example, we do evaluate the performance of
designed system for risk in technical skill and knowledge.
The existed data on technical skill and knowledge in the data base of this system are used for train of
neural network which sets the systems parameters. We will use 80% of these data for train of system and
remaining 20% will be used for testing the system. In other words, the first 80 rows of this data base are related to
train and the last 20 rows are considered as test data.
Regarding to mentioned issues on ANFIS, a code has been programmed in MATLAB software. The
outputs of program which includes the optimum membership functions for probability of occurrence, risk severity,
errors of train and test, procedure of inference rules, and correlation between predicted data by network and train
data and test data, are obtained. All of these issues for technical skill and knowledge will be examined.
Regarding to selection of the best membership function, different scenarios have been performed and the
scenario with the minimum error is chosen. Related to performance of designed fuzzy system, there are 2 types of
error RMSE and MAPE.
Where, At , Ft , N represent real data, predicted data, and the number of data, respectively. Also,
N N

A
 t 1
At
and F 
.  t 1
Ft
N N
Different performed scenarios with their errors have been presented in Table 3.

Table 12. Various scenarios and their related RMSE, MAPE, and R

Scenario Membership Function Equation RMSE MAPE R

1
f ( x; a, b, c)  2b
1 gbellmf xc 0.1117 3.0096 0.9169
1
a
1
2 dsigmf f ( x; a , c )   a ( x c )
0.1109 2.9881 0.9180
1 e
2
( x c )

3 gaussmf 2
2 0.1113 2.9992 0.9174
f ( x;  , c )  e
2
( xc )

4 gauss2mf 2
2 0.1108 2.9845 0.9182
f ( x;  , c)  e
1
5 psigmf f ( x; a , c )   a ( x c )
0.1109 2.9880 0.9181
1 e

0, xa
x-a
 , a xb
b - a

6 trapmf f ( x; a, b, c , d )  1 bxc 0.1109 2.9882 0.9180
d  x
 , cxd
d c
0, dx

0, xa
x-a
 , a xb
b - a
7 trimf f ( x ; a , b, c )   0.1106 2.9804 0.9185
c  x , b  x  c
c  b
0, cx

8 pimf Spline 0.1109 2.9882 0.9180

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As can be seen, triangular membership function is the best one because it has the minimum errors of
MAPE and RMSE and the maximum correlation coefficient. Membership functions of probability of occurrence and
risk severity have been shown in Diagram 4.

Diagram 4. Probability and severity membership functions

Diagrams 5 and 6 represent train and test errors related to technical skill and knowledge factor.

Diagram 5. Plot of train error against epochs Diagram 6. Plot of test error against epochs

As can be observed, train error increases with an unstable trend increase. However, with increase of the
number of epochs, error reduces and error fluctuations reach to steady state. Error values of MAPE and RMSE for
6 8
training are 2.8947  10 and 1.5489  10 at the end of epoch 500. These low values indicate that the
network works well. Also, the low value of test error indicates the reliability of system for risk assessment
( MAPE  2.9804 / RMSE  0.1106 ).
Correlation between test data and data predicted by ANFIS is 0.9185. Closeness of this value to 1
indicates the fitness of designed system for risk evaluation.
Diagram 10 presents a 3-D diagram (surface) of rules in the fuzzy system. As mentioned, these rules have
been developed based on Sugeno. In addition, as can be seen in the ANFIS structure of Diagram 7, the logic
operator used in combining the inputs states is AND.

Diagram 7. 3D surface of the rules

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In a general view, it can be inferred from 3-D diagram that with increase in probability and risk severity,
risk value increases which is a logical conclusion. For other risk factors of construction projects, such this
procedure is doable.

4. CONCLUSION

Most of traditional methods in risk assessment are based on statistical or computing techniques. Many of
these methods cannot cover data related to quality factors which have high effect on risk evaluation. Thus,
because of high abilities of artificial neural network in the prediction, learning, and modeling of human knowledge,
an adaptive neuro-fuzzy inference system (ANFIS) was applied based on experts’ opinions for risk assessment of
construction projects. Briefly, advantages of ANFIS in prediction and evaluation of risks can be stated as follows:
 An adaptive neuro-fuzzy inference system can learn from experience and past knowledge.
 It can induce knowledge to future conditions by learning and updating itself.
 It can be applied to quantitative and qualitative factors.
Some other approaches like hierarchical analysis or multi-criteria decision making have high computing
efforts when the number of experts is high. Also, these approaches cannot match with current conditions of project.
The approach of this study in the risk assessment process can be extended for ranking and prioritizing the risk
factors of construction projects and can be used to design a decision support system to assess them.

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