Methods of analysing risk exposure in the cost estimates of high quality offices

Abstract

The paper considers two non-deterministic methods of analysing the risk exposure in a cost estimate. Both methods are applied to the same data sample of eight high quality office buildings. An assessment of each method is made in the context of this practical application. The common practice of allowing for risk through an all-embracing contingency sum or percentage addition is challenged. Rather than excluding conventional, deterministic methods, they are here presented as possibly the only effective foundation on which to base risk management in cost estimating.

Keywords:

• Risk analysis
• risk exposure
• cost estimating
• simulation