Risk assessment of the investment decision in the system "time constraints-cost"(by the example of construction)

Authors

  • Ирина Валериевна Поповиченко Prydniprovs’ka State Academy of Civil Engineering and Architecture, st. Chernyshevsky, 24a, Dnepropetrovsk, Ukraine, 49005, Ukraine https://orcid.org/0000-0003-3443-9356

DOI:

https://doi.org/10.15587/2312-8372.2014.31470

Keywords:

risk, probability, scenario, investment decision, fixed and variable costs, marginal effect

Abstract

The approach to risk assessment in the process of optimizing the structure of costs and terms of realization investment decisions at presence resource constraints has been proposed. It was clarified the notion of operational risk of an investment decision on the example of the construction project. Based on the scenario-probabilistic approach on a concrete example investigated the dependence of the size of the predicted operational risk of the project on the timing of its implementation and the magnitude of the fixed and variable costs of the project. Quantitatively the level of operational risk is assessed as the possibility of exceeding factual variable costs of the project over the planned project variable costs in the optimistic and pessimistic scenarios.

Revealed that the decrease of the construction period and, accordingly, the intensification of the average monthly total costs expedient as long as the average monthly increase (relative and absolute) of volume of construction works is ahead of the monthly growth the level of fixed costs, that is, until you reach the famous in the economy marginal effect. The duration of the construction at which occurs this effect is less favorable to the forecast of operational risk (the risk is greatest, marginal income is minimal).

The dependence found we recommend to take into account at formation of temporal and cost characteristics of investment decisions (projects) in contracting.

Author Biography

Ирина Валериевна Поповиченко, Prydniprovs’ka State Academy of Civil Engineering and Architecture, st. Chernyshevsky, 24a, Dnepropetrovsk, Ukraine, 49005

Doctor of Economic Sciences, Associate Professor, Professor the Department of Management, Project Management and Logistics

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Published

2014-12-11

How to Cite

Поповиченко, И. В. (2014). Risk assessment of the investment decision in the system "time constraints-cost"(by the example of construction). Technology Audit and Production Reserves, 6(2(20), 28–35. https://doi.org/10.15587/2312-8372.2014.31470

Issue

Vol. 6 No. 2(20) (2014): Economics and management of enterprise. Mathematical methods, models and information technologies in economics

Section

Economics and Enterprise Management: Original Research

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Copyright (c) 2016 Ирина Валериевна Поповиченко

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