Development of a computer model for evaluating the alternative options of an investment and construction project under conditions of uncertainty and risk

Authors

DOI:

https://doi.org/10.15587/1729-4061.2019.184376

Keywords:

quantitative analysis of risks, decision tree, investment project, decision making under conditions of risk

Abstract

The paper reports the proposed method of quantitative analysis of risks in investment construction projects, which uses a probabilistic approach. The specific feature of this approach is a multistage evaluation process and complex accounting of indicators for decision making regarding the investment attractiveness of sites under conditions of uncertainty.

Based on this approach, an automated computer model for evaluating investment attractiveness of construction projects was developed. The indicators of investment efficiency and risks for various options of construction project implementation were explored, the alternative for a project development was selected and the best investment project was determined with the use of the computer model.

The reliability of the results was proved by studying the stability of decisions and by their errors.

The results were obtained in order to improve the efficiency of managerial decisions in the sector of investment in construction sector of economy. The developed computer model makes it possible, based on statistical data of demand for residential real estate, to perform a quantitative analysis of risks of investment in construction projects, to make a choice of a construction project by profitability and risk indicators, as well as by the criteria of decision making under conditions of risk and uncertainty.

Numerical experiments with a computer model showed the need to invest in additional research in order to clarify the environmental parameters and to invest in the construction of a multi-storey building.

The obtained results are relevant due to a high degree of turbulence in the environment in the construction sector, as well as in connection with the importance of attracting investments from the position of competitiveness. The computer model developed in the process of research is universal regarding the type of a residential real estate construction object

Author Biographies

Natalia Sizova, Kharkiv National University of Civil Engineering and Architecture Sumska str., 40, Kharkiv, Ukraine, 61002

Doctor of Physical and Mathematical Sciences, Professor

Department of Computer Science and Information Technology

Olha Starkova, Kharkiv National University of Civil Engineering and Architecture Sumska str., 40, Kharkiv, Ukraine, 61002

Doctor of Technical Sciences, Associate Professor, Head of Department

Department of Computer Science and Information Technology

Ganna Solodovnik, Kharkiv National University of Civil Engineering and Architecture Sumska str., 40, Kharkiv, Ukraine, 61002

PhD, Associate Professor

Department of Computer Science and Information Technology

Natalya Dolgova, Kharkiv National University of Civil Engineering and Architecture Sumska str., 40, Kharkiv, Ukraine, 61002

PhD, Associate Professor

Department of Computer Science and Information Technology

References

  1. Vitlinskyi, V. V. (2004). Ryzykolohiya v ekonomitsi ta pidpryiemnytstvi. Kyiv: KNEU, 480.
  2. Vitlinskyi, V. V., Verchenko, P. S. et. al. (2000). Ekonomichnyi ryzyk, ihrovi modeli. Kyiv: KNEU, 120.
  3. Yaremko, I. Y. (2005). Metody otsinky budivelnykh kontraktiv v umovakh ekonomichnoi intehratsiyi. Naukovi zapysky, 8, 34–39.
  4. Bartashevska, Yu. M. (2014). Otsinka ryzyku investytsiynykh proektiv pidpryiemstva v protsesi yikh realizatsiyi. Yevropeiskyi vektor ekonomichnoho rozvytku. Ekonomichni nauky, 2 (17), 15–21.
  5. Koshechkin, S. A. Kontseptsiya riska investitsionnogo proekta. Korporativnyy menedzhment. Available at: http://www.cfin.ru/finanalysis/koshechkin.shtml
  6. Kazak, A. Yu., Slepuhina, Yu. E. (2013). Sovremennye metody otsenki proektnyh riskov: traditsii i innovatsii. Vestnik UrFu. Seriya ekonomika i upravlenie, 2, 13–36.
  7. Doroshenko, M. (2012). Peculiarities of investment project risk calculation. Visnyk Kyivskoho natsionalnoho torhovelno-ekonomichnoho universytetu, 5, 66–75.
  8. Bernoulli, D. (1954). Exposition of a New Theory on the Measurement of Risk. Econometrica, 22 (1), 23–36. doi: https://doi.org/10.2307/1909829
  9. Molins, J., Vives, E. (2016). Model risk on credit risk. Risk and Decision Analysis, 6 (1), 65–78. doi: https://doi.org/10.3233/rda-150115
  10. Guégan, D., Hassani, B., Li, K. (2017). Measuring risks in the tail: The extreme VaR and its confidence interval. Risk and Decision Analysis, 6 (3), 213–224. doi: https://doi.org/10.3233/rda-170128
  11. Osadchaya, N. A., Murzin A. М., Torgayan, E. E. (2017). Assessment of Risks of Investment and Construction Activities: Russian Practice. Journal of advanced research in law and economics, 8 (2), 529–544.
  12. Shelepov, A. (2018). MDBs’ Approaches to Mobilizing Private Investment for SDGs: Opportunities and Risks. International Organisations Research Journal, 13 (4), 144–159. doi: https://doi.org/10.17323/1996-7845-2018-04-07
  13. Olkhov, V. (2017). Quantitative description of financial transactions and risks. ACRN Oxford Journal of Finance and Risk Perspectives, 6 (2), 41–54.
  14. Mohamed Ihab, K. I. R. A. (2017). Pricing implications of assessing risk of relative wealth outcomes. ACRN Oxford Journal of Finance and Risk Perspectives, 6 (2), 55–76.
  15. Garnier, J., Papanicolaou, G., Yang, T.-W. (2017). A risk analysis for a system stabilized by a central agent. Risk and Decision Analysis, 6 (2), 97–120. doi: https://doi.org/10.3233/rda-160117
  16. Belás, J., Vojtovič, S., Ključnikov, A. (2016). Microenterprises and Significant Risk Factors in Loan Process. Economics & Sociology, 9 (1), 43–59. doi: https://doi.org/10.14254/2071-789x.2016/9-1/3
  17. Aliu, F., Pavelkova, D., Dehning, B. (2017). Portfolio risk-return analysis: The case of the automotive industry in the Czech Republic. Journal of International Studies, 10 (4), 72–83. doi: https://doi.org/10.14254/2071-8330.2017/10-4/5
  18. Karas, M., Srbová, P. (2019). Predicting bankruptcy in construction business: Traditional model validation and formulation of a new model. Journal of International Studies, 12 (1), 283–296. doi: https://doi.org/10.14254/2071-8330.2019/12-1/19
  19. Solodovnyk, H. V. (2018). Modeliuvannia pryiniattia bahatoetapnykh rishen. Yevropeiskyi vektor modernizatsiyi: kreatyvnist, prozorist ta stalyi rozvytok, 207–220.
  20. Novozhylova, M. V., Solodovnyk, H. V. (2016). Modeliuvannia upravlinnia komertsiynym ryzykom. Kharkiv: KhNUBA, 81.
  21. Rynok pervichnogo zhil'ya Har'kova v 2018 godu. Available at: http://idcmproject.com.ua/novostrojki_itogi_2018/
  22. Vitlinskyi, V. V. (2010). Quantitative measurement of the level of economic risk. Visnyk ZhDTU. Seriya: Ekonomichni nauky, 1 (51), 159–162. Available at: http://ven.ztu.edu.ua/article/view/69230/64976
  23. Vysochina, M. V. (2009). Analiz metodiv otsiniuvannia efektyvnosti upravlinnia diyalnistiu pidpryiemstva. Kul'tura narodov Prichernomor'ya, 161, 86–89.
  24. Sizova, N. D., Solodovnik, G. V., Perun, M. U. (2016). Analysis of the methods of assessment of investment appeal of construction objects in term of uncertainty and risk. Young Scientist, 10 (37), 417–420.
  25. Labsker, L. G., Yanovskaya, E. V. (2002). Obshchaya metodika konstruirovaniya kriteriev optimal'nosti resheniy v usloviyah riska i neopredelennosti. Finansoviy menedzhment, 5, 58–74.
  26. Brumnik, R., Klebanova, T., Guryanova, L., Kavun, S., Trydid, O. (2014). Simulation of Territorial Development Based on Fiscal Policy Tools. Mathematical Problems in Engineering, 2014, 1–14. doi: https://doi.org/10.1155/2014/843976
  27. Sizova, N. D., Petrova, O. O., Solodovnik, G. V., Perun, M. U. (2017). Evaluation of investment attractiveness using information system. Young Scientist, 4.4, 90–93.
  28. Guryanova, L., Klebanova, T., Trunova, T. (2017). Modeling the financial strategy of the enterprise in an unstable environment. Economic Studies journal, 3, 91–109.
  29. Guryanova, L. S., Klebanova, T. S., Gvozdytskiy, V. S. (2015). Econometric modelling of the financial regulation mechanism in regional development. Actual Problems of Economics, 11, 408–421.
  30. Piskun, O. I., Klebanova, T. S. (2014). Analysis of current organizational forms of integrated structures. Actual Problems of Economics, 2, 201–210.
  31. Daradkeh, Y., Guryanova, L., Kavun, S., Klebanova, T. (2012). Forecasting the cyclical dynamics of the development territories: Conceptual approaches, models, experiments. European Journal of Scientific Research, 74 (1), 5–20.

Downloads

Published

2019-11-20

How to Cite

Sizova, N., Starkova, O., Solodovnik, G., & Dolgova, N. (2019). Development of a computer model for evaluating the alternative options of an investment and construction project under conditions of uncertainty and risk. Eastern-European Journal of Enterprise Technologies, 6(3 (102), 66–76. https://doi.org/10.15587/1729-4061.2019.184376

Issue

Vol. 6 No. 3 (102) (2019): Control processes

Section

Control processes

License

Copyright (c) 2019 Natalia Sizova, Olha Starkova, Ganna Solodovnik, Natalya Dolgova

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

The consolidation and conditions for the transfer of copyright (identification of authorship) is carried out in the License Agreement. In particular, the authors reserve the right to the authorship of their manuscript and transfer the first publication of this work to the journal under the terms of the Creative Commons CC BY license. At the same time, they have the right to conclude on their own additional agreements concerning the non-exclusive distribution of the work in the form in which it was published by this journal, but provided that the link to the first publication of the article in this journal is preserved.

A license agreement is a document in which the author warrants that he/she owns all copyright for the work (manuscript, article, etc.).
The authors, signing the License Agreement with TECHNOLOGY CENTER PC, have all rights to the further use of their work, provided that they link to our edition in which the work was published.
According to the terms of the License Agreement, the Publisher TECHNOLOGY CENTER PC does not take away your copyrights and receives permission from the authors to use and dissemination of the publication through the world's scientific resources (own electronic resources, scientometric databases, repositories, libraries, etc.).
In the absence of a signed License Agreement or in the absence of this agreement of identifiers allowing to identify the identity of the author, the editors have no right to work with the manuscript.
It is important to remember that there is another type of agreement between authors and publishers – when copyright is transferred from the authors to the publisher. In this case, the authors lose ownership of their work and may not use it in any way.