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Risk identification and assessment of modular construction utilizing fuzzy

analytic hierarchy process (AHP) and simulation

Article  in  Canadian Journal of Civil Engineering · December 2013

DOI: 10.1139/cjce-2013-0013

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 1184

ARTICLE
Risk identification and assessment of modular construction utilizing
fuzzy analytic hierarchy process (AHP) and simulation
Hong Xian Li, Mohamed Al-Hussein, Zhen Lei, and Ziad Ajweh

Abstract: Modular construction brings improved safety and mitigates risks of hazard and injury. However, modular construc-
Can. J. Civ. Eng. Downloaded from www.nrcresearchpress.com by 52.2.249.46 on 09/09/15

tion technology is also challenged with a degree of uncertainty resulting from such internal and external factors as engineering,
occupational, cultural, socio-economic, and financial. Since modular construction is by nature distinct from conventional
construction, existing risk management research for onsite construction cannot be directly applied to modular construction.
This paper describes research on the risk management associated with modular construction, focusing on: (1) identifying risk
factors and (2) assessing the impacts of the identified risk factors on project cost and duration. The primary risk factors associated
with modular construction are identified, and fuzzy analytic hierarchy process (AHP) is utilized to rank these factors; simulation
techniques are employed to assess the risks of projects. The risk identification and ranking are evaluated by a focus group of
experts from the modular construction industry; t-distribution and chi-squared distribution are applied to analyze the results.
The case of a project in Edmonton, Canada is presented to illustrate application of the proposed methodology.

Key words: modular construction, risk management, AHP, fuzzy logic, simulation.

Résumé : La construction modulaire améliore la sécurité et atténue les risques de dangers et de blessures. Toutefois, la
technologie de construction modulaire présente également un certain niveau d’incertitude découlant de facteurs internes et
externes tels que les aspects d’ingénierie, d’usage, de culture, socioéconomiques et financiers. La construction modulaire étant
For personal use only.

par nature différente de la construction conventionnelle, la recherche existante sur la gestion des risques pour la construction
sur place ne peut être directement appliquée à la construction modulaire. Le présent article décrit la recherche sur la gestion des
risques associés à la construction modulaire, plus particulièrement : (1) l’identification des facteurs de risques et (2) l’évaluation
des impacts des facteurs de risque identifiés sur le coût et la durée d’un projet. Les principaux facteurs de risque associés à la
construction modulaire sont identifiés. La méthode de hiérarchie multicritère floue (AHP) est utilisée pour classer ces facteurs et
des techniques de simulation sont utilisées pour évaluer les risques des projets. L’identification et le classement des risques sont
évalués par un groupe de consultation composé d’experts provenant de l’industrie de la construction modulaire. La loi de
Student et la distribution chi carré sont utilisées pour analyser les résultats. Le cas d’un projet à Edmonton, en Alberta, Canada,
est présenté afin d’illustrer l’utilisation de la méthode proposée. [Traduit par la Rédaction]

Mots-clés : construction modulaire, gestion des risques, méthode de hiérarchie multicritère (AHP), logique floue, simulation.

1. Introduction
Modular construction is widely accepted as an efficient con-
struction method, particularly in North America for residential
building construction. Processes such as offsite module prefabri-
cation, shipping of modules to the site, and onsite installation are
involved in modular construction, making it distinct from con-
ventional onsite construction. The significant offsite work of
modular construction results in considerable construction time
reduction, quality control, waste reduction, safety improvement,
and hazard and injury mitigation; however, modular construc-
tion also entails a degree of risk. A systematic risk management
approach is thus needed for modular construction so that con-
struction project stakeholders can consider project risks and plan
accordingly to avoid budget overruns and schedule delays.
The Project Management Institute (2000) (PMI) has introduced a
uniform methodology for risk management in the Project Man-
agement Body of Knowledge (PMBOK), which consists of the fol-
lowing processes: (1) plan risk management; (2) identify risks;
(3) perform qualitative risk analysis; (4) perform quantitative risk
analysis; (5) plan risk responses; and (6) monitor and control
risks. The PMI methodology also designs a blueprint for project
risk management, which will be utilized in this research. The
Construction Industry Institute (2012) (CII), meanwhile, has out-
lined a three-level risk analysis process: identification, determin-
istic, and probabilistic. Based on risk identification, probabilities
and consequences are utilized for second-level risk analysis,
whereas advanced analytical techniques, such as simulation mod-
elling, are utilized for third-level analysis. Most of the other re-
search on construction risk has focused on the current practice of
onsite construction projects. Tah et al. (1993) applied fuzzy set
theory to assess risk for contingency allocation; the relevant risk
factors were identified, and the risk was assessed accordingly us-
ing fuzzy set theory for the purpose of allocating contingencies.
Other research has sought to identify construction industry risk
factors in a region-specific context. Tang et al. (2007) conducted a
survey in the Chinese construction industry about the overall
aspects of risk management from the perspectives of various proj-
ect participants, including client, contractor, and superintendent.
The study revealed that the industry has shifted from risk transfer
to risk reduction; it also underscored that the lack of a joint risk

Received 14 January 2013. Accepted 20 June 2013.

H.X. Li. Hole School of Construction Engineering, Department of Civil and Environmental Engineering, University of Alberta, Edmonton, AB T6G 2W2, Canada; Business School, Hohai
University, Nanjing 211100, PR China.
M. Al-Hussein, Z. Lei, and Z. Ajweh. Hole School of Construction Engineering, Department of Civil and Environmental Engineering, University of Alberta, Edmonton, AB T6G 2W2, Canada.
Corresponding author: Hong Xian Li (e-mail: ho8@ualberta.ca).

Can. J. Civ. Eng. 40: 1184–1195 (2013) dx.doi.org/10.1139/cjce-2013-0013 Published at www.nrcresearchpress.com/cjce on 21 June 2013.
 Li et al.
management mechanism is a key barrier to the application of risk
management. Choudhry and Iqbal (2013) carried out an empirical
survey-based study on risk management in the construction in-
dustry in Pakistan. The resulting analysis supported the notion
that the industry generally tries to avoid or transfer financial and
economic risk. Subramanyan et al. (2012) conducted an empirical
research study in India, based on surveys of contractors, owners,
and project management experts. The research identified the risk
factors and proposed a risk assessment model for risk manage-
ment within the context of the construction industry in India.
Naderi (2008) studied risk management systematically utilizing
fuzzy logic, where the severity of risk was computed by multiply-
ing the likelihood with the impact. More recently, computer tech-
nology has been applied to construction risk management. An
integrated methodology for planning construction projects under
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uncertainty has been developed, which is incorporated into a
computer-supported risk management system for risk identifica-
tion, analysis, and quantification (Schatteman et al. 2008). Imbeah
and Guikema (2009) utilized an advanced programmatic risk anal-
ysis and management model (APRAM) for managing scheduling
and cost and quality risks in the construction industry. A modified
APRAM was proposed that considers potential risks during the
entire project life cycle to support decision making in the housing
industry (Zeynalian et al. 2013). Karakas et al. (2013) developed a
multi-agent system (MAS) to simulate risk allocation and the cost
sharing process in construction projects. Among risk manage-
ment methodologies, analytic hierarchy process (AHP) and fuzzy
logic are often implemented for quantification. Thomas L. Saaty
(1977) developed AHP, which has been extensively applied and
For personal use only.
studied for decision making; AHP is a traditional approach to
comparing and ranking elements, and is often used in risk assess-
ment. In addition, Zadeh (1965) developed fuzzy set theory, which
was introduced as an extension of classical set theory. For the
purpose of expressing fuzziness and uncertainty of difference,
fuzzy set theory is combined with AHP. Liu et al. (2011) used AHP
and fuzzy logic to evaluate the geological hazard susceptibility of
pipelines. Cao et al. (2011) implemented uncertain AHP on a mul-
tistage synthesis fuzzy assessment of a pipeline using the princi-
ple of uncertain judgment. Liou and Wang (1992) proposed a
method of ranking fuzzy numbers with integral values, which
serves to convert each fuzzy number to a crisp number consider-
ing ␣-cut and optimistic and pessimistic views. Fuzzy AHP has also
been implemented in other industries; for example, Khorasani
and Bafruei (2011) proposed a fuzzy AHP approach to evaluating
and selecting suppliers in the pharmaceutical industry. Although
there are many existing studies in risk management for conven-
tional construction, a gap exists in the scholarship with regard to
risk management for modular construction in specific.
Unlike conventional onsite construction, modular construction
technology involves prefabricating modules offsite and shipping
them to the site for installation. Murtaza et al. (1993) addressed
the advantages of modular construction, including time savings,
cost savings, and the learning-curve benefit; and a decision-making
methodology was proposed to determine whether or not to utilize
modular construction for a specific project. Lawson et al. (2012)
demonstrated the application of modular construction for high-
rise buildings, and also indicated the benefits in terms of both
economics and sustainability. Furthermore, a number of research
initiatives have incorporated virtual construction automation for
modular construction operations. Olearczyk et al. (2009) proposed
a methodology to optimize the crane selection process for onsite
erecting of five three-storey modular buildings using 4 D model-
ling. Lu and Korman (2010) discussed the benefits and challenges
of implementation of BIM in modular construction.
Despite the many advantages of modular construction outlined
in the literature, modular construction still involves risks, and
these risks differ from those for conventional project delivery due
to the unique activities that modular construction involves. Gen-
1185
erally, the following distinct risks are encountered in modular
construction: (1) engineering: modular construction increases re-
liance on the use of machinery, automated design and drafting,
and production line, since most tasks are completed in a factory
setting; (2) occupational and cultural: due to the nature of factory-
based construction and the tasks involved, the demographic com-
position of the workforce varies from conventional construction
in that it could include to a greater extent women, older adults,
and in some cases persons with physically disabilities; (3) socio-
economic: modular construction is affected by the degree of
acceptance among consumers of this type of construction;
(4) financial: construction process and payment schedules which
differ from conventional construction introduce financial issues
to builders. Furthermore, some factors have impacts on modular
versus conventional construction to varying degrees: e.g., the
weather affects conventional construction more than it does mod-
ular construction. In summary, while a number of studies have
investigated risk management for conventional construction,
there is a lack of scholarship examining the associated risks for
modular construction.
2. Research objective and methodology
The aim of this research is to address risk management for
modular construction within the context of project cost and du-
ration. The risk management procedure introduced in the PMI
PMBOK has been adopted in this research, and the main compo-
nents of the PMBOK risk management procedure — the risk factor
identification and risk assessment — are the focus of this paper.
Other components, such as risk responses, monitoring, and con-
trol, can be addressed based on the identified risk factors and
their impacts. The research objective involves: (1) identifying and
ranking risk factors in the context of project duration and cost,
based on the characteristics of modular construction; (2) quanti-
fying risk factor variations and their impact on projects; and
(3) assessing the cost and duration risks for a modular construc-
tion project. To achieve the objective, the research methodology is
proposed as Fig. 1., in which the input of parameters include:
(1) modular construction processes and characteristics, which de-
termine the risk factors; (2) expert opinions about risk factor rank-
ing and the variation of factors for a project; (3) project baseline
information, including the precedence relationship, and the cost
and duration of each process; and (4) project variation informa-
tion, which is described in terms of risk factors for a specific
project. In this paper, it should be noted, “experts” refers to pro-
fessional engineers, plant or site managers, superintendents, and
academic staff who have acquired sufficient engineering experi-
ence to evaluate the identified risks. Expert opinions were col-
lected from experts who attended the 2012 Modular and Offsite
Construction (MOC) Summit in Edmonton, Alberta, and from per-
sonnel from the authors' industry partners in the modular and
panelized construction sector in Alberta, Canada.
The main process follows four steps:
(1) Identify risk factors in the context of project cost and dura-
tion for modular construction, and classify these risk factors
into qualitative and quantitative factors: risk factor identifi-
cation is based on existing research and construction industry
experience.
(2) Determine risk factor weightings on project cost and dura-
tion. The expert opinions and fuzzy AHP are implemented
during this phase to rank the identified risk factors. Tradi-
tional AHP uses crisp numbers (1, 3, 5, 7, and 9) to distinguish
between two elements; however, it is challenging to express
ambiguity to account for the difference between two ele-
ments. To express the fuzziness of the difference, fuzzy logic
is combined with traditional AHP. Based on the theories of
AHP and fuzzy logic, a fuzzy scale of fuzzy AHP, shown in
Table 1, is proposed to determine the weights of risk factors.
Published by NRC Research Press
 1186
Fig. 1. Research methodology.
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Table 1. Fuzzy AHP ranking scale.
Linguistic variable Fuzzy number Fuzzy number scale
Identical 1 (1, 1, 1)
For personal use only.
A little more important 3 (2, 3, 4)
More important 6 (5, 6, 7)
Much more important 9 (8, 9, 10)
A little less important 1/3 (1/2, 1/3, 1/4)
Less important 1/6 (1/5, 1/6, 1/7)
Much less important 1/9 (1/8, 1/9, 1/10)
Following the fuzzy ranking, the method proposed by Liou
and Wang (1992) is used to convert fuzzy numbers to crisp
numbers, considering ␣-cut and optimistic or pessimistic views
subject to the precision of the paired comparison.
(3) For a specific project, quantify risk factor variations and im-
pacts on a project using function fitting and expert opinions.
(4) Develop a simulation model of project cost and duration
based on the project baseline information and related quan-
tification: as a modelling and analytical tool, simulation has
been utilized by the construction industry for operation and
process improvement (AbouRizk and Halpin 1990; AbouRizk
et al. 2011). In this research, a simulation tool, Simphony.
NET4.0, is utilized as a risk simulation and quantification
method.
The proposed methodology is subject to the following criteria:
triangular fuzzy membership function, trapezoidal function,
t-distribution, and chi-squared distribution, of which t-distribution
and chi-squared distribution are used for output analysis. The
output involves the project cost and duration profiles, and the
quantified project cost and duration risks for specific project cost
and duration expectations. Based on the risk factor weightings in
terms of project cost and duration, the primary risk factors will be
monitored subsequently; the simulated project cost and duration
profiles serve as the base line for project risk monitoring and
control.
3. Risk factor identification and ranking
The primary risk factors, which have a major impact on project
cost and duration, will be analyzed in this research. Based both on
interviews with plant managers and other industry personnel and
Can. J. Civ. Eng. Vol. 40, 2013
on reviews of related research, the primary risk factors for mod-
ular construction have been identified and categorized into three
types: (1) general risk factors: these are the risk factors typical of
most construction projects, whether onsite or offsite; (2) in-plant
risk factors: these are the factors associated with offsite prefabri-
cation of modules and panels; and (3) onsite risk factors: these
factors have an impact on onsite preparation and installation. The
detailed items for each category are listed in Table 2. It is noted
that the factors listed in Table 2 are subjective and may vary for
different experts; however, it is the factors which are most com-
monly identified by experts that are regarded as primary. Each
factor listed in Table 2 has a different impact on project duration
and cost; in this paper, these impacts are measured and ranked
using expert opinions. The collected data are processed using
fuzzy AHP to obtain the weightings of risk factors as follows:
(1) The minimum value (L), the maximum value (U), and the
mean value (M) of the expert opinions are calculated satisfy-
ing eqs. (1), (2), and (3), respectively, using the method pro-
posed by Buckley (1985); the calculation results are listed in
Table 3.
(1) Lij ⫽ min(Bijk)
冪兿
n
(2) Mij ⫽ n Bijk
1
(3) Uij ⫽ max(Bijk)
where Lij is the minimum value of expert opinions for the
element at row i and column j; Mij is the mean value of expert
opinions for the element at row i and column j; Uij is the
maximum value of expert opinions for the element at row i
and column j; and Bijk is the relative importance of factor i
compared to factor j from the view of expert k.
The empty cells in Table 3 have been left blank since their
values are simply the reciprocals of the values in the symmet-
rically corresponding cells in the same table. For instance, in
Table 3, “economic condition” has a stronger impact on proj-
ect cost than does “political & social condition”. The mini-
mum value (L) in the cross-cell of row “economic condition”
Published by NRC Research Press
 Li et al. 1187

Table 2. Risk factors and explanations.

Risk category Risk factor Explanation Notation
General risk factors Economic condition Economic boom in terms of construction GDP contribution, EC
which affects both construction cost and productivity
Political & social condition Change of government policies, change of political support due to PSC
change in political environment, and worker strike etc.
Construction planning Project planning for construction CP
Construction coordination & control Project coordination and control during construction CCC
Change in design or scope of work Change of project design or scope CDS
In-plant risk factors Drawings supply time Supply time of shop drawings to plant DST
Drawings quality Errors and clarity of shop drawings DQ
Material supply time Material supply on time to plant MST
Material quality Quality and type of material MQ
Labour availability Labour quantity available for plant LA
Labour skills Skills and experiences of labour LS
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Fabrication equipment condition Production line condition in factory FEC

Onsite risk factors Temperature Temperature degree, which affects the productivity of onsite T
construction, especially in winter
Wind speed Wind speed, which affects the productivity of onsite erection, and WS
can cause construction cancellations
Site condition Ground condition and neighbourhood environment SC
Construction equipment condition Heavy equipment (mainly crane) condition for lifting and installation CEC

and column “political & social condition” is 2; correspond-
ingly, the minimum value (L) in the cross-cell of row “political
& social condition” and column “economic condition” is the
reciprocal of 2, which is 0.5. After the data processing, the
maximum eigenvalue is calculated to test the consistency of
For personal use only.
are usually measured as percent change from the original scope.
Temperature and wind speed can be measured using different
indices, since they are considered quantitative factors. Factors
that cannot be measured as quantitative data, such as “construc-
tion planning”, “construction coordination & control”, “supply of

the expert opinions.
(2) Once the minimum, mean, and maximum fuzzy values have
been calculated, the method proposed by Liou and Wang
(1992) is employed to convert the fuzzy number to a crisp
number using a triangular fuzzy membership function as il-
lustrated in Fig. 2. In our research, with a moderate value of
0.5 applied for ␣ and ␤, eq. (4) is used to convert fuzzy num-
bers in Table 3 into crisp numbers; then conventional AHP is
used to generate the weightings in Table 4.
drawings”, “supply of labour & material”, “fabrication equipment
condition”, “site condition”, and “construction equipment condi-
tion”, are considered qualitative factors.
For a specific project, each of the factors listed above has a
potential variation which can be described as a change range, and
the variation will have a resultant impact on the project. To quan-
tify these variations and impacts, various quantitative methods
are applied to the quantitative factors, and expert opinion is used
to analyze the qualitative factors.

(4) g␣,␤(ãij) ⫽ [␤ × f␣(Lij) ⫹ (1 ⫺ ␤)f␣(Uij)], 0 ≤ ␣, ␤ ≤ 1 4.1. Quantitative factors

where ãij is the element at row i and column j in the fuzzy
matrix; g␣,␤共ãij兲 is the crisp value for the cell at row i and
column j in the ã fuzzy matrix with ␣ and ␤-cut value; ␣ is the
left-end ␣-cut value for element ãij; ␤ is the left-end ␤-cut value
for element ãij; Lij is the minimum value of expert opinions for
the element at row i and column j; Uij is the maximum value of
expert opinions for the element at row i and column j; f␣(Lij) is
the left function of the triangular membership function in
Fig. 2; f␣(Uij) is the right function of the triangular member-
ship function in Fig. 2. For example, expert opinion about the
impact of “political & social” vs. “economic” conditions on proj-
ect cost is calculated as follows: the minimum is 2, the average is
3, and the maximum is 4; the crisp number corresponding to the
fuzzy set is calculated as 0.5 × [(3−2) × 0.5 + 2] + 0.5 × [4−(3−2) ×
0.5] = 3.
(3) These converted crisp numbers are processed using conven-
tional AHP, and the results are listed in Table 4.
4. Risk factors’ variation and impact quantification
In Table 2, such risk factors as “economic condition”, “change
in design or scope of work”, “temperature”, and “wind speed” can
be measured quantitatively. In this paper, economic condition is
measured in terms of the construction industry's contribution to
GPD (referred to subsequently in this paper as “construction
GDP”), since construction GDP is regarded as the key indicator of
the construction economy. Changes to the design or scope of work
4.1.1. Economic condition
Construction GDP as an indicator of the construction economy
reflects both productivity and construction prices. As a result, the
variation of construction GDP entails certain risks in terms of
project duration and cost. Meanwhile, according to industry prac-
tice, construction productivity will decrease during an economic
boom, since fewer skilled workers are available and there is less
competition in the labour market. As a result, construction prices
increase along with lower productivity during economic boom
times, in turn resulting in higher costs and a longer duration.
In this paper, the variation in construction GDP is measured as
a range of potential change percentage compared to the baseline
GDP, which is the initial construction GDP for a project, satisfying
eq. (5). To measure the impact of economic variation on a project,
a linear function is applied to correspond symmetrically to the
fitting function; however, the accuracy of the impact may be im-
paired. The impact of the economic situation, denoted as Fe, can
be calculated satisfying eq. (6).
(5) Ve ⫽ 共 MinB⫺ B, Max ⫺ B
B 兲
where Ve is the economic variation; Min is the minimum construc-
tion GDP during the construction period of a project; Max is the
maximum construction GDP during the construction period of a
project; and B is the baseline GDP.

Published by NRC Research Press

 1188
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Table 3. Fuzzy AHP ranking of risk factors on project cost and duration.
EC PSC CP CCC CDS DST DQ MST MQ LA LS FEC T WS SC CEC
L M U L M U L M U L M U L M U L M U L M U L M U L M U L M U L M U L M U L M U L M U L M U L M U
EC 1 1 1 2 3 4 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6 4 5 6 6 7 8 7 8 9 8 9 10 5 6 7 5 6 7
1 1 1 1 2 3 0.2 0.3 0.4 0.3 0.4 0.5 0.1 0.2 0.3 0.1 0.2 0.3 0.2 0.3 0.4 0.1 0.2 0.3 0.2 0.3 0.4 0.1 0.2 0.3 0.2 0.3 0.4 0.4 0.5 0.6 0.7 0.8 0.9 0.7 0.8 0.9 0.3 0.4 0.5 0.3 0.4 0.5
PSC 1 1 1 2 3 4 2 3 4 2 3 4 2 3 4 2 3 4 4 5 6 4 5 6 4 5 6 4 5 6 2 3 4 4 5 6 7 8 9 2 3 4 4 5 6
1 1 1 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 2 3 4 4 5 6 5 6 7 2 3 4 4 5 6
CP 1 1 1 1 2 3 1 2 3 1 2 3 5 6 7 4 5 6 5 6 7 4 5 6 5 6 7 4 5 6 4 5 6 5 6 7 5 6 7 5 6 7
1 1 1 1 2 3 3 4 5 1 2 3 3 4 5 1 2 3 3 4 5 1 2 3 3 4 5 5 6 7 5 6 7 5 6 7 5 6 7 5 6 7
CCC 1 1 1 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 4 5 6 4 5 6 5 6 7 6 7 8 6 7 8
1 1 1 2 3 4 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 5 6 7 5 6 7 2 3 4 2 3 4
CDS 1 1 1 4 5 6 3 4 5 4 5 6 3 4 5 4 5 6 3 4 5 3 4 5 4 5 6 5 6 7 4 5 6 4 5 6
1 1 1 1 1 1 2 3 4 1 2 3 2 3 4 1 2 3 2 3 4 2 3 4 6 7 8 6 7 8 4 5 6 4 5 6
For personal use only.

DST 1 1 1 1 1 1 1 2 3 1 2 3 1 2 3 1 2 3 0.7 0.8 0.9 4 5 6 5 6 7 4 5 6 4 5 6

1 1 1 2 3 4 1 2 3 3 4 5 1 2 3 3 4 5 2 3 4 5 6 7 5 6 7 4 5 6 4 5 6
DQ 1 1 1 2 3 4 1 2 3 2 3 4 1 2 3 1 2 3 4 5 6 5 6 7 2 3 4 2 3 4
1 1 1 0.6 0.7 0.8 1 2 3 0.6 0.7 0.8 1 2 3 1 2 3 5 6 7 5 6 7 2 3 4 2 3 4
MST 1 1 1 0.7 0.8 0.9 1 1 1 0.7 0.8 0.9 0.7 0.8 0.9 4 5 6 5 6 7 3 4 5 3 4 5
1 1 1 3 4 5 1 1 1 3 4 5 3 4 5 5 6 7 5 6 7 3 4 5 3 4 5
MQ 1 1 1 1 2 3 1 1 1 3 4 5 4 5 6 5 6 7 1 2 3 1 2 3
1 1 1 0.4 0.5 0.6 1 1 1 3 4 5 5 6 7 5 6 7 1 2 3 1 2 3
LA 1 1 1 0.7 0.8 0.9 0.7 0.8 0.9 4 5 6 5 6 7 3 4 5 3 4 5
1 1 1 3 4 5 3 4 5 5 6 7 7 8 9 3 4 5 3 4 5
LS 1 1 1 3 4 5 4 5 6 5 6 7 1 2 3 1 2 3
1 1 1 3 4 5 5 6 7 5 6 7 1 2 3 1 2 3
FEC 1 1 1 2 3 4 3 4 5 1 2 3 1 2 3
1 1 1 5 6 7 4 5 6 0.7 0.8 0.9 0.7 0.8 0.9
T 1 1 1 1 2 3 0.7 0.8 0.9 0.7 0.8 0.9
1 1 1 1 2 3 0.7 0.8 0.9 0.7 0.8 0.9
WS 1 1 1 0.7 0.8 0.9 0.7 0.8 0.9
1 1 1 0.6 0.7 0.8 0.6 0.7 0.8
SC 1 1 1 3 4 5
1 1 1 3 4 5
CEC 1 1 1
Published by NRC Research Press

1 1 1

Can. J. Civ. Eng. Vol. 40, 2013

Notes: The numbers in empty cells are the reciprocals of the corresponding symmetrical cells in the same table. For each factor in one row, the number in the cell above is for cost, and in the one below is for duration.
 Li et al. 1189

Fig. 2. Triangular fuzzy membership function. 4.1.3. Temperature

Within the possible temperature (°C) range for construction
activities there is a range of preferable temperatures within
which construction productivity peaks; outside of the range, pro-
ductivity decreases to some extent. In this paper, a trapezoidal
function is used to account for temperature such that the function
f(x) represents the preferable degree of temperature. The differ-
ence between the actual and the preferable temperature is calcu-
lated as ⌬Ft, satisfying eq. (9) (see Fig. 3). Assuming the impact to
the preference degree difference is linear, the impact of temper-
ature (Ft) is calculated satisfying eq. (10) and shown in Fig. 3b.

再 冎
(x ⫺ a)
1⫺ a≤x≤b
(b ⫺ a)
(9) ⌬Ft ⫽ 1 ⫺ f(x) ⫽ 0 b≤x≤c
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(d ⫺ x)
1⫺ c≤x≤d
Table 4. Risk factor weights on cost and duration. (d ⫺ c)
Risk factors Cost weight Duration weight
where ⌬Ft is the preference degree difference between a specific
Economic condition 0.214 0.030
Political & social condition 0.135 0.115 temperature and the preference one; f(x) is the preference degree
Construction planning 0.105 0.142 function; x is the temperature value; a is the lower-bound value of
Construction coordination & control 0.081 0.096 temperature; d is the upper-bound value of temperature; b is the
Change in design or scope of work 0.102 0.095 lower-bound value of preference temperature; and c is the upper-
Drawings supply time 0.054 0.101 bound value of preference temperature.

再 冎
Drawings quality 0.056 0.057
Material supply time 0.038 0.082 1 ⫹ (1 ⫺ f(x)) ⫽ 2 ⫺ f(x) a ≤ x ≤ b
Material quality 0.043 0.048 (10) Ft ⫽ 1 ⫹ ⌬Ft ⫽ 1 b≤x≤c
Labour availability 0.038 0.079 1 ⫹ (1 ⫺ f(x)) ⫽ 2 ⫺ f(x) c ≤ x ≤ d
Labour skills 0.042 0.047
For personal use only.

Fabrication equipment condition 0.030 0.031

Temperature 0.014 0.015 where Ft is the impact of temperature; f(x) is the preference degree
Wind speed 0.011 0.013 function; x is the temperature value; a is the lower-bound value
Site condition 0.021 0.028 of temperature, –25° in this research; d is the upper-bound value of
Construction equipment condition 0.016 0.022 temperature, 35° in this research; b is the lower-bound value of
Total 1 1 preference temperature, 22° in this research; and c is the upper-
bound value of preference temperature, 25° in this research.

4.1.4. Wind speed

(6) Fe ⫽ 1 ⫹ Ve
where Fe is the impact index of the economy and Ve is the eco-
nomic variation.
4.1.2. Change in design or scope of work
Project design or scope variation is usually measured by percent
change in project quantity. Theoretically the uniform measure of
project change is project cost; however, after considering the im-
Wind speed affects onsite erecting in modular construction in
the following manner: the lower the wind speed, the higher the
productivity. In this paper, the semi-trapezoidal function is em-
ployed to account for wind speed, in which the function f(x) rep-
resents the preference degree of wind. The preference degree
difference between the actual and the preference wind speed is
calculated as ⌬Fw, satisfying eq. (11) (see Fig. 4). Assuming the
impact is linear to the preference degree difference, the impact of
wind (Fw) is calculated satisfying eq. (12) (see Fig. 4b).

再 冎
pact on project duration, a general project quantity is found to be 0 0≤x≤a
more versatile. This allows for the use of building floor area, for (11) ⌬Fw ⫽ 1 ⫺ f(x) ⫽ (b ⫺ x)
example, to be input as the measure of project percent change, 1⫺ a≤x≤b
(b ⫺ a)
which may be more useful for some projects. The project change
variation is quantified satisfying eq. (7); assuming the impact is
linear to the variation, the impact of project change, denoted as where ⌬Fw is the preference degree difference between actual and
Fc, can be calculated satisfying eq. (8). preference wind speed; f(x) is the preference degree function; x is
the wind speed; a is the turning point of wind speed, 36 km/h in

共 Min WW ⫺ W, 兲
Max W ⫺ W this research; and b is the construction cancellation point of wind
(7) Vc ⫽ speed, 50 km/h in this research.
W

where Vc is the project change variation; Min W is the minimum

work of a project; Max W is the maximum work of a project; and
(12) Fw ⫽ 1 ⫹ ⌬Fw ⫽ 再 1
2⫺
(b ⫺ x)
(b ⫺ a)
0≤x≤a
a≤x≤b 冎
W is the Initial work of a project.

(8) Fc ⫽ 1 ⫹ Vc where Fw is the impact of wind speed; ⌬Fw is the preference degree
difference between actual and preference wind speed; x is the
wind speed; a is the turning point of wind speed, 36 km/h in this
where Fc is the impact index of change and Vc is the change vari- research; and b is the construction cancellation point of wind
ation. speed, 50 km/h in this research.

Published by NRC Research Press

 1190 Can. J. Civ. Eng. Vol. 40, 2013

Fig. 3. Trapezoidal function fitting.

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Fig. 4. Semi-trapezoidal function fitting.

For personal use only.

4.2. Qualitative factors
For qualitative risk factors, including “construction planning”,
“construction coordination & control”, “supply of drawings”,
“supply of labour & material”, “fabrication equipment condition”,
“site condition”, and “construction equipment condition”, the
variations cannot be predicted directly as quantitative ranges.
Thus, the expert opinion method is necessary to quantify the
variations. In this paper, “good”, “ordinary”, and “poor” are ad-
opted to describe the variation, corresponding to quantified num-
the impact indices and weights of risk factors, satisfying eqs. (13)
to (18). However, RC and RD cannot be calculated directly, since the
impact index of each factor (Fi) is a range; simulation is applied to
address this problem. The modelling and simulation tool, Sim-
phony.NET4.0, is utilized in this research, and the mean value
and the variance of the simulation results are analyzed using
t-distribution and chi-squared distribution, satisfying eqs. (19) and
(20).
k

兺F × w
ber ranges: [0.8, 1], [0.6, 0.8], and [0.5, 0.6]. Furthermore, all of the
qualitative risk factors have reverse impacts on the project cost (13) RC ⫽ i
C
i
i⫽1
and duration compared to the variations. Taking “political and
social condition” as the example, the project cost and duration k
tend to be lower and shorter if the political and social conditions
are promising. The impact index of each qualitative risk factor is
(14) RD ⫽ 兺F × w
i⫽1
i
D
i

thus calculated in this paper as the reciprocal of the variation.

m
5. Cost and duration risk simulation
Theoretically, project cost and duration (C and D, respectively)
(15) C⫽ 兺C × R
j⫽1
j
0
C

can be calculated by combining cost and duration baselines with

their risk indices (RC and RD, respectively), which are derived from (16) D ⫽ T m ⫹ Dm
0 × R
D

Published by NRC Research Press

 Li et al.
Fig. 5. Compassion House 3D model.
Can. J. Civ. Eng. Downloaded from www.nrcresearchpress.com by 52.2.249.46 on 09/09/15
(17) T s ⫽ Max共T r ⫹ Dr0 × RD兲
(18) T0 ⫽ 0
where RC is the project cost risk index; RD is the project duration
risk index; Fi is the impact index of risk factor i; wiC is the cost
weight of risk factor i; wiD is the duration weight of risk factor i; C
is the project cost; D is the project duration; Cj0 is the cost baseline
of activity j; Dm m
0 is the duration baseline of last activity m; T is start
For personal use only.
s
time of last activity; T is the start time of any activity in the
project; Tr is the start time of predecessor r of any activity s; Dr0 is
the duration baseline of predecessor r of any activity s; T0 is the
start time of first activity; i is the risk factor number; j is the
activity number; k is the number of risk factors; and m is
the number of activities.
S duration baselines as inputs, and the results are presented in
(19) Y ⫽ X ± t(n⫺1),(1⫺(␣/2))
兹n
where Y is the confidence interval of mean value with a 95% con-
fidence level; X is the mean value of project cost/duration of
simulation results; t is the value of t-distribution with the corre-
sponding confidence interval and simulation times; S is the stan-
dard deviation of project cost/duration of simulation results; and
n is the simulation running times.
(20) Z⫽ 冋 (n ⫺ 1)S2 (n ⫺ 1)S2
␹(1⫺(
2
, 2
␣/2)),(n⫺1) ␹(␣/2),(n⫺1)
册 mean project duration is [59.36, 59.38], and the confidence inter-
where Z is the confidence interval of variance with a 95% confi-
dence level; ␹2 is the value of chi-squared distribution with the
corresponding confidence interval and simulation times; S is the
standard deviation of project cost/duration in simulation results;
and n is the simulation running times.
6. Case study
6.1. Project information
The proposed methodology is demonstrated in a case project,
Compassion House in Edmonton, Alberta, Canada, which in-
volves the expansion and renovation of an existing building; the
expansion floor area is 855.36 m2, while the existing floor area is
695.57 m2. The stakeholders in this case were interested in imple-
menting a modular construction approach to build this project;
the corresponding 3 D model for the project and the modules are
presented in Fig. 5. Based on the assumptions that there are two
independent production lines in the module fabrication plant,
1191
and that there is sufficient workforce to accomplish parallel ac-
tivities, the project is scheduled as presented in Table 5. The con-
struction process involved in this project is illustrated in Fig. 6,
and Table 6 lists the risk factors with their corresponding base-
lines and quantified variations. The estimated amount without
contingency is $1 043 900, as shown in Table 6, and the total ex-
pected budget is $1 180 000; the target project duration for this
project is 60 days.
6.2. Simulation model and results
The modular construction process (as shown in Fig. 6) is simu-
lated using Simphony.NET, a simulation environment developed
at the Hole School of Construction, University of Alberta. The
built simulation model is presented in Fig. 7; in this model, two
production lines are considered. The simulation model incorpo-
rates the risk factor weights, risk factor variations, and cost and
terms of probability density function (PDF) and cumulative distri-
bution function (CDF).
The cost and duration variations, which are quantified using
function fitting or expert opinions, are listed in Table 6. Based on
the proposed methodology, the simulation results show that the
mean project cost is $1 148 891 (see Fig. 8), and the mean project
duration is 59 days (similar to Fig. 8). The 95% confidence level
interval of mean project cost is [$1 148 553, $1 149 228], and the
confidence interval of variance within the same confidence level
is [288779072, 305241598]. The 95% confidence level interval of
val of variance within the same confidence level is [0.15, 0.16]. The
simulation results indicate that the probability of completing the
project within a budget of $1 180 000 is about 92%, and the prob-
ability of completing the project within 60 days is about 95%.
According to the results, it is demonstrated that in addition to
“economic condition” and “political & social condition”, such fac-
tors as “construction planning”, “project change”, and “construc-
tion coordination & control” are primary controllable risk factors
for project cost; also “drawing supply time” is an important factor
with respect to project duration. Due to their effect on project cost
and duration, these primary factors are given particular attention
in terms of monitoring and control during the construction pro-
cess. The simulation results (cost and duration profiles) in turn
can be used as the benchmarks for project cost and duration
control during the monitoring and control process.
7. Conclusions
Although applications of modular construction result in improved
safety and mitigated hazards and injury, modular construction tech-
nology is still challenged with the degree of associated uncertainties.
Published by NRC Research Press
 1192 Can. J. Civ. Eng. Vol. 40, 2013

Table 5. Compassion House project information.

Task Task Duration Cost
No. name (Days) Predecessors (Dollars)
I Module fabrication
1 Module-1 for 1st floor 21 None 42 600
2 Module-2 for 1st floor 23 Module-1 of 1st floor (SS = 2 days) 84 000
3 Module-3 for 1st floor 22 Module-2 of 1st floor (SS = 2 days) 85 000
4 Module-4 for 1st floor 22 Module-3 of 1st floor (SS = 2 days) 82 500
5 Module-5 for 1st floor 16 Module-4 of 1st floor (SS = 8 days) 26 500
6 Module-6 for 1st floor 12 Module-5 of 1st floor (SS = 6 days) 15 600
7 Roof manufacturing 18 Module-6 for 1st floor (SS = 2 days) 15 000
8 Module-1 for 2nd floor 21 None 42 600
9 Module-2 for 2nd floor 23 Module-1 for 2nd floor (SS = 2 days) 84 000
10 Module-3 for 2nd floor 22 Module-2 for 2nd floor (SS = 2 days) 85 000
11 Module-4 for 2nd floor 22 Module-3 for 2nd floor (SS = 2 days) 82 500
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12 Module-5 for 2nd floor 16 Module-4 for 2nd floor (SS = 8 days) 26 500
13 Module-6 for 2nd floor 12 Module-5 for 2nd floor (SS = 6 days) 15 600
II Panels fabrication
14 Lift pit & Basement wall fabrication 6 Module-1 of 1st floor (SS = 15 days) 38 000
III Site preparation and footing
15 Mobilization 1 Module-1 of 1st floor (SS = 20 days) 15 000
16 Demolishing existing house 4 Mobilization 10 000
17 Excavation 2 Demolishing existing house 6 500
18 Footing casting 2 Excavation 10 000
19 Backfilling and compaction 1 Footing casting 4 000
20 Utility connections (including trenching 4 Backfilling and compaction 8 000
and backfilling)
IV Module shipping
21 Lift pit & Basement wall shipping 1 Lift pit & Basement walls fabrication 10 000
22 Module shipping for 1st floor 1 Module fabrication for 1st floor 9 000
For personal use only.

23 Module shipping for 2nd floor 1 Module fabrication for 2nd floor 9 000
24 Roof shipping 1 Module shipping for 2nd floor, Roof manufacturing 6 000
V On-site construction
25 Lift pit & Basement wall installation 2 Lift pit & Basement wall shipping, 10 000
Utility connections floor cast
26 Module installation for 1st floor 1 Lift pit & Basement installation, 4 000
Module shipping for 1st floor
27 Module installation for 2nd floor 1 Module installation for 1st floor, 4 000
Module shipping for 2nd floor
28 Roof installation 1 Roof shipping, Module installation 8 000
for 2nd floor
29 Basement floor casting 3 Roof installation 20 000
VI Finishing
30 Interior finishing 6 Roof installation 30 000
31 Exterior finishing 8 Roof installation 45 000
VII Renovation
32 Existing house renovation 4 Exterior finishing 35 000
33 Opening 1 Existing house renovation 15 000
VIII Landscaping
34 Landscaping 5 Exterior finishing 60 000
Total 1 043 900

Fig. 6. Modular construction processes.

Published by NRC Research Press

 Li et al. 1193

Table 6. Risk factor variation and impact quantification.

Risk factor Project construction condition Quantified variation Impact on project
Economic condition Ordinary (Baseline point is $73 467M*) [$72 000M, $75 000M] [0.98, 1.02]
Political & social condition Good [0.8, 1] [1, 1.25]
Construction planning Good [0.8, 1] [1, 1.25]
Construction coordination & control Good [0.8, 1] [1, 1.25]
Change in design or scope of work Small [−1.5%, 1.5%] [0.985, 1.015]
Drawings supply time Good [0.8, 1] [1, 1.25]
Drawings quality Good [0.8, 1] [1, 1.25]
Material supply time Good [0.8, 1] [1, 1.25]
Material quality Good [0.8, 1] [1, 1.25]
Labour availability Good [0.8, 1] [1, 1.25]
Labour skills Good [0.8, 1] [1, 1.25]
Fabrication equipment condition Good [0.8, 1] [1, 1.25]
Temperature [25 °C, 30 °C] [0.5, 1] [1, 1.5]
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Wind speed [0, 30 km/h] [1, 1] [1, 1]

Site condition Poor [0.5, 0.6] [1.67, 2]
Construction equipment condition Good [0.8, 1] [1, 1.25]
*http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/econ41-eng.htm.

Fig. 7. Simulation modeling.

For personal use only.

Previous research related to risk management has mainly focused on
conventional onsite construction technology, which cannot be di-
rectly applied to modular construction. A generic method for risk
management of modular construction has thus been presented in
this research.
As an initial step, risk factors associated with the modular con-
struction process were identified as follows: (1) General risk fac-
tors: these are the common risk factors that affect both onsite and
offsite construction, including economic conditions, political &
social conditions, construction planning, construction coordina-
tion & control, changes in the design and scope of the work.
(2) In-plant risk factors: these are the factors involved in offsite
prefabrication of modules and panels, including drawings supply
time, drawings quality, material supply time, material quality,
labour availability, labour skills, and fabrication equipment con-
dition. (3) Onsite risk factors: these are the factors that have an
impact on onsite preparation and installation, including temper-
ature, wind speed, site condition, and construction equipment
condition. Based on the risk factor identification, expert opinions
and fuzzy AHP have been utilized to determine the weightings of
risk factors on project cost and duration. For specific modular
construction projects, function fitting and expert opinions have
been employed to quantify risk factor variations and their im-
pacts on the given project. Subsequently, simulation (Simphony.
NET) has been implemented as a modelling and computation ap-
proach to calculate project risks. The case of a building project in
Edmonton, Alberta, Canada, Compassion House, has been consid-
ered to illustrate the application of the proposed methodology. In
terms of verification and validation of this research, the expert
opinions and the mutual confirmation provided the validation for
the risk identification. For the risk quantification, the simulation
tool was utilized to quantify the project risks and generate the
project cost and duration profiles; the results can be compared
with the daily risk management as validation of the proposed
methodology.
This research has proposed a generic risk management frame-
work for modular construction; the innovative contribution of
this paper comprises two aspects: (1) the specific risk factors are
identified based on the unique activities involved in modular con-
struction, accommodating both offsite and onsite construction

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 1194
Fig. 8. Simulation result (Cost).
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environments; and (2) the method of quantifying the risk factors'
variation and impacts is generic; the quantification results assist
in subsequently controlling and mitigating risk. In addition, this
research has proposed a unique and reasonable fuzzy AHP rank-
ing scale. This research has been conducted with the assistance of
a residential builder operating in Edmonton, Alberta, Canada,
which has adopted modularization as their main construction
method, and the identified risks are based on the daily experience
For personal use only.
of practitioners from this residential builder. Although the possi-
bility for some marginal regional variation in risk factors exists, it
is reliable to apply the identified risk factors and assess risk im-
pact for modular construction on the basis of the experience of
these practitioners. The proposed methodology benefits stake-
holders by identifying the specific risk factors and quantifying
their impact on modular construction, e.g., stakeholders can ob-
tain better understandings of the risks involved in both offsite
and onsite construction, apply the methodology to evaluate the
risk impacts, and consequently take action to avoid or mitigate
those risks. The research has also laid a foundation for modular
construction risk management upon which future researchers
can develop more complicated methodologies or algorithms for
modular construction risk management. The following points
should be considered in future research: (1) the assumption that
the impacts of risk factors are linear to the variation, which may
impair quantification accuracy, is one of the limitations of this
research; and (2) the in-depth integration of risk management
processes, from risk management planning to risk monitoring
and controlling for modular construction, should be considered
in future research.
Acknowledgements
The authors are grateful for support from NSERC, and to those
who have contributed their time and resources to this research
(Mr. Jonathan Tomalty, Dr. Gunnar Lucko, Dr. Ahmed Bouferguène,
Mr. Gurjeet Singh, and Mr. Hexu Liu). Also, financial support from
the Fundamental Research Funds for the Central Universities in
China (No. 2011B03714) is much appreciated.
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