Fuzzy Randomness Simulation of Long-Term Infrastructure Projects

Attarzadeh, Meghdad, Chua, David KH, Beer, Michael ORCID: 0000-0002-0611-0345 and Abbott, Ernest LS (2017) Fuzzy Randomness Simulation of Long-Term Infrastructure Projects. ASCE-ASME Journal of Risk and Uncertainty in Engineering Systems, Part A: Civil Engineering, 3 (3). 04017002-04017002.

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Abstract

The conventional simulation model used in the prediction of long-term infrastructure development systems such as public-private partnership (PPP)-build-operate-transfer (BOT) projects assumes single probabilistic values for all of the input variables. Traditionally, all the input risks and uncertainties in Monte Carlo simulation (MCS) are modeled based on probability theory. Its result is shown by a probability distribution function (PDF) and a cumulative distribution function (CDF), which are utilized for analyzing and decision making. In reality, however, some of the variables are estimated based on expert judgment and others are derived from historical data. Further, the parameters' data of the probability distribution for the simulation model input are subject to change and difficult to predict. Therefore, a simulation model that is capable of handling both types of fuzzy and probabilistic input variables is needed and vital. Recently fuzzy randomness, which is an extension of classical probability theory, provides additional features and improvements for combining fuzzy and probabilistic data to overcome aforementioned shortcomings. Fuzzy randomness-Monte Carlo simulation (FR-MCS) technique is a hybrid simulation method used for risk and uncertainty evaluation. The proposed approach permits any type of risk and uncertainty in the input values to be explicitly defined prior to the analysis and decision making. It extends the practical use of the conventional MCS by providing the capability of choosing between fuzzy sets and probability distributions. This is done to quantify the input risks and uncertainties in a simulation. A new algorithm for generating fuzzy random variables is developed as part of the proposed FR-MCS technique based on the α-cut. FR-MCS output results are represented by fuzzy probability and the decision variables are modeled by fuzzy CDF. The FR-MCS technique is demonstrated in a PPP-BOT case study. The FR-MCS results are compared with those obtained from conventional MCS. It is shown that the FR-MCS technique facilitates decision making for both the public and private sectors' decision makers involved in PPP-BOT projects. This is done by determining a negotiation bound for negotiable concession items (NCIs) instead of precise values as are used in conventional MCS results. This approach prevents prolonged and costly negotiations in the development phase of PPP-BOT projects by providing more flexibility for decision makers. Both parties could take advantage of this technique at the negotiation table.

Item Type:	Article
Depositing User:	Symplectic Admin
Date Deposited:	23 Apr 2018 06:51
Last Modified:	19 Jan 2023 06:35
DOI:	10.1061/AJRUA6.0000902
Related URLs:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3020470