Risk Assessment and Mitigation Model for Overseas Steel-Plant Project Investment with Analytic Hierarchy Process—Fuzzy Inference System

Min-Sung Kim, Eul-Bum Lee, In-Hye Jung and Douglas Alleman
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Min-Sung Kim: POIST Task-force Team, POSCO (Pohang Iron and Steel Company), 6261 Donghaean-ro, Nam-gu, Pohang 37666, Korea
Eul-Bum Lee: Graduate Institute of Ferrous Technology & Graduate School of Engineering Mastership, Pohang University of Science and Technology (POSTECH), 77 Cheongam-ro, Nam-gu, Pohang 37673, Korea
In-Hye Jung: Graduate Institute of Ferrous Technology & Graduate School of Engineering Mastership, Pohang University of Science and Technology (POSTECH), 77 Cheongam-ro, Nam-gu, Pohang 37673, Korea
Douglas Alleman: Construction Engineering and Management, Department of Civil, Environmental and Architectural Engineering, University of Colorado, Boulder, CO 80309, USA

Sustainability, 2018, vol. 10, issue 12, 1-17

Abstract: This paper presents an analytic hierarchy process (AHP)-fuzzy inference system (FIS) model to aid decision-makers in the risk assessment and mitigation of overseas steel-plant projects. Through a thorough literature review, the authors identified 57 risks associated with international steel construction, operation, and transference of new technologies. Pairwise comparisons of all 57 risks by 14 subject-matter experts resulted in a relative weighting. Furthermore, to mitigate human subjectivity, vagueness, and uncertainty, a fuzzy analysis based on the findings of two case studies was performed. From these combined analyses, weighted individual risk soring resulted in the following top five most impactful international steel project risks: procurement of raw materials; design errors and omissions; conditions of raw materials; technology spill prevention plan; investment cost and poor plant availability and performance. Risk mitigation measures are also presented, and risk scores are re-assessed through the AHP-FIS analysis model depicting an overall project risk score reduction. The model presented is a useful tool for industry performing steel project risk assessments. It also provides decision-makers with a better understanding of the criticality of risks that are likely to occur on international steel projects.

Keywords: Natural resource development; Risk assessment and mitigation; Analytic Hierarchy Process (AHP); Fuzzy Inference System (FIS); steel plant; Investment Sustainability; Engineer Procure and Construct (EPC) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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