FUZZY STOCHASTIC COST AND SCHEDULE RISK ANALYSIS:

MOB CASE STUDY

Andrew Nyakaana Blair, Bilal M. Ayyub
University of Maryland at College Park1
William J. Bender
Central Washington University2

ABSTRACT feasibility study of a Mobile Offshore Base (MOB).

The Office of Naval Research in a feasibility study of
a Mobile Offshore Base (MOB) has proposed several
concepts for very large ocean structures and will make
risk informed assessments of alternative concepts.
Using the MOB as a case study, this paper provides a
methodology for cost and schedule risk-based decision
analysis of alternative MOB hull construction concepts.
During risk analysis, cognitive, vague or aleatory
uncertainty can be handled using fuzzy sets and logic in
many modeling scenarios. Stochastic modeling and
analysis is mandated in cases of probabilistic,
ambiguous or epistemic uncertainty. This paper uses a
methodology for fuzzy-stochastic risk-based decision
analysis of alternative MOB hull construction concepts
and demonstrates fuzzy set quantification of MOB
subjective information. The use of Bayes Theorem for
updating the state-of-knowledge of MOB cost and
schedule information as it is piecewise accumulated is
also discussed.
1. INTRODUCTION
1.1 Overview
Risk management decisions are among the most
conceptually difficult ones faced by managers (see [1]).
Many projects have schedule risks inherent in their
execution which require appropriate modeling, analysis
and assessment.
Risk analysis can be defined as a technique for
identifying, characterizing, quantifying, and evaluating
hazards (see[2]). In risk analysis, the consequences
must somehow be evaluated even if qualitatively, and
the definition of the number or quantity assigned to a
particular consequence clearly given.
Several very large ocean structures have been
proposed as part of the Office of Naval Research
The MOB platform is about 1500m (1mile) by 120m
(400feet), which is unprecedented in size and
operations compared to any floating structure to date.
This paper uses the MOB hull construction as a case
study to demonstrate risk-based decision analysis
methodology.
1.2 Objective
The objectives of this paper are to provide
methodologies for the implementation of fuzzy-
stochastic risk-based analysis of alternative MOB hull
construction concepts and to demonstrate fuzzy set
quantification of MOB subjective information. A
further objective is to discuss the use of Bayes Theorem
for updating the state-of-knowledge of MOB cost and
schedule information as it is piecewise accumulated.
Discrete event simulation of a Critical Path Method
(CPM) network provides information for risk-based
decision analysis. A fuzzy logic inference system is
used to capture both quantitative and subjective
information in the form of numerical and linguistic data
entry. Fuzzy based costing and scheduling enables use
of approximate MOB data. The results are incorporated
in simulation program to perform fuzzy stochastic
modeling. A decision tree is fed both outputs of the
fuzzy logic inference system and the network
simulation. Sensitivity analysis is performed on the
decision analysis results. The application of Bayes'
Theorem to up-date information obtained from the
results of the risk-based decision analysis is discussed.
2. RISK ANALYSIS
2.1 Definition of Risk
The concept of risk is used to assess and evaluate
uncertainties associated with an event. Risk can be

1
Center for Technology and Systems Management, University of Maryland at College Park, MD 20742, USA
E-Mail: blair@eng.umd.edu and ayyub@umail.umd.edu
2
400 E 8th Avenue, Ellensburg, WA 98928, USA. E-Mail: benderw@cwu.edu
defined as the potential for loss as a result of a system
failure. Risk can be measured as a pair of the
probability of occurrence of an event, and the outcomes
or consequences associated with the event’s occurrence.
This paring is not a mathematical operation, a scalar or
vector quantity but a matching of an event’s probability
of occurrence with the expected consequence.
uncertainty
4. Fuzzy stochastic analysis for cases with both
cognitive and non-cognitive types of uncertainty
where the fourth case can be developed by combining 2
and 3. The MOB has activities whose durations and
costs can be analyzed as deterministic, stochastic, fuzzy
or fuzzy stochastic.

2.2 Uncertainty Modeling And Analysis 3. FUZZY STOCHASTIC RISK–BASED

2.2.1 Need for Uncertainty Treatment
A kernel element of risk is uncertainty represented
by plural outcomes and their future likelihoods (see[3]).
There has been a paradigm shift in science concerning
the treatment of uncertainty. Not only is this
considered from the statistical treatment of ambiguity
but also more applications are available, for example
fuzzy sets and logic, for the treatment of vagueness.
Vagueness is often encountered in linguistic
expressions which do not crisply place a given subject
matter in one class. As such, the degree of membership
of each variable with in the class can be defined by
fuzzy sets and logic. It has been affirmed that most of
infrastructure investment problems exhibit properties of
multiobjectivity and fuzziness in real nature (see[4]).
This nessicates fuzzy treatment of uncertainty.
DECISION ANALYSIS METHODOLOGY
3.1 Fuzzy Stochastic Risk Analysis
Software is available that includes automation of
fuzzy set computations and interactive graphical fitting
of various distribution. In the estimation of the cost and
schedule of activities, either historical data are available
and may be used to categorize a statistical distribution,
or complete data are not available and the underlying
distribution has to be based on the subjective
information provided by an “expert.” The second
possibility is frequently encountered and can be
modeled fuzzy stochastically (see[11]) by following
the steps which are given in the Fig. 1.
Subjective
Information Input

2.2.2 Treatment of Uncertainty

A review of the literature finds a variety of
treatments of uncertainty. Uncertainties can be Fuzzy Set
Quantification
classified into two broad categories, namely:
probabilistic and cognitive uncertainties (see [5]).
Others (see[6]) generally classify uncertainties Estimated Parameters
including :
concerning engineering systems as ambiguity and 1. Maximum and minimum
values
vagueness. These are also referred to these as 2. Mean and variance
epistemic and aleatory uncertainties, respectively (see
[7], [8]). Uncertainty measures can be classified into
the following three major categories (see [6]): No Is fit in graphical display of
(i) Information measures based on crisp sets and distribution satisfactory?

probability theory
(ii) Uncertainty and information measures based on
fuzzy sets and possibility theory.
(iii) Uncertainty measures within the framework of
belief and plausibility based on the theory of
evidence.
Uncertainty can be attributed to vagueness where
there are ill defined boundaries and ambiguity where
there are several choices for a given situation (see [9]).
In structural and reliability analyses the following
methods for cognitive and noncognitive types of
uncertainty are recognized (see [10]): 1.
1. Deterministic analysis for cases without 2.
uncertainty in basic variables 3.
2. Stochastic analysis for cases with noncognitive
type of uncertainty
3. Fuzzy analysis for cases with cognitive type of 4.
Yes
Stochastic duration estimate
Input into Simulation
module
Figure 1: Fuzzy Stochastic Application
Collect and input subjective information
Quantify subjective information using fuzzy sets
Estimate various parameters of distributions,
including maximum and minimum values, and the
mean and variances of the parameters
Examine graphical display of distributions. The
 fitted distribution is affected by selection and
membership values of the linguistic variables. If fit
is unsatisfactory, update estimated parameters.
5. From satisfactory fit obtain stochastic estimate of
the duration
6. Input results into simulation module
Quantification of subjective information using fuzzy
sets is done using the following steps:
Step1: Variable definition
Step 2: Rule composition
Step 3: Translation
Step 4: Execution
This quantification creates the fuzzy inference system
depicted in Fig. 2.
Specify system Macro-level
structure and debugging and
variables analysis
Fuzzy Inference
System
Specify
membership
Micro-level
debugging and
functions for each
variable
analysis
Specify fuzzy rules
Figure 2: Fuzzy Inference System
Linguistic variables can be translated into
mathematical measures by fuzzy sets and systems
theory and conventional procedures like the Program
Evaluation and Review Technique (PERT) can be used
if updated probabilistic input is used to obtain the
required information (see[12]). The simulation module
uses updated probabilistic input. Application of the
following steps results in risk estimates:
1. CPM is performed on a project to identify critical
and near critical paths
2. Critical and near critical paths are modeled using
PERT procedures
3. Continuous or discrete event simulations are run.
The number of simulations to meet accuracy and
stability requirements is determined statistically.
4. Risk-based decision analysis is performed on
simulation results to give fuzzy stochastic risk
assessment.
The central limit theorem, when used in MOB
construction simulation, implies that no matter what the
underlying distribution are, the simulated schedule
duration or cost mean will tend to a normal distribution
(see[13]) as long as the assumption of the theorem are
met of large number of input variables without a
dominating distribution type. This theorem is applied
to each MOB concept and scenario combination critical
path for schedule duration and all activities for cost. In
simulating total schedule duration, only activities on the
critical path are considered while in simulating total
cost, all activities are considered. Schedule duration is
approximated by a probability distribution with mean
and variance the sums of the means and variances of
the activities on the critical path, respectively. Total
cost is approximated by a normal distribution with
mean and variance the sums of the means and variances
of all activities, respectively. The probability
associated with completing the project within certain
time or cost limits can be computed using standard
normal distribution formulae. The central limit
theorem is used as a basis to justify computed schedule
and cost risk probability.
3.2 Risk-Based Decision Analysis
Performing risk analysis may require making various
decisions in order to reduce the risk of the MOB.
Engineering decisions involving risk need to be made
using a systematic framework that considers many
facets of a decision problem. The decision framework is
called the decision model. In order to construct a
decision model (see[14]), the following elements of the
decision model need to be defined: (1) objectives of
decision analysis, (2) decision variables, (3) decision
outcomes, and (4) associated probabilities and
consequences.
3.2.1 Objectives of Decision Analysis
Engineering decision problems can be classified into
single- and multiple-objective problems. Decision
analysis requires the definition of these objectives. For
cases of multiple objectives, the objectives need to be
stated in the same units, and weight factors that can be
used to combine the objectives need to be assigned.
3.2.2 Decision Variables
The decision variables for the decision model need
also to be defined. The decision variables are the
feasible options or alternatives available to the
decision-maker at any stage of the decision-making
process. Also, ranges of values that can be taken by the
decision variables should be defined. Assigning a value
to a decision variable means making a decision at that
point of a decision-making process. These points within
the decision-making process are called decision nodes.
3.2.3 Decision Outcomes
The decision outcomes for the decision model need
also to be defined. The decision outcomes are the
events that can happen as a result of a decision. They
are random in nature, and their occurrence cannot be
fully controlled by the decision-maker. The decision
outcomes with the associated occurrence probabilities
need to be defined. The decision outcomes can occur
after making a decision at points within the decision-
making process called chance nodes.
3.2.4 Associated Probabilities and Consequences
The decision variables take values that can have
associated costs. These costs can be considered as the
direct consequences of making these decisions. The
decision outcomes have both consequences and
occurrence probabilities. The probabilities are needed
due to the random (chance) nature of these outcomes.
3.2.5 Decision Trees
Decision trees are systematic models that are used to
examine the information in decision making. Branches
formed from decision or chance nodes construct a
“tree”. A decision node splits into two or more paths,
based on number of possible decisions. These paths can
be chosen by the decision-maker and have costs
associated with them. Chance nodes split into two or
more paths and follow the decision nodes. The chance
nodes are followed by possible outcomes that can occur
without the control of the decision-maker. These
outcomes have both probabilities and consequences
associated with them. Each split in both decision and
chance nodes form a line from left to right that is called
a tree branch. Each branch represents a possible
outcome of what can happen. Appropriate decisions
with the lowest expected costs may be chosen.
3.3 Bayesian Updating of Information
Accurate estimates of risk-based decision analysis
parameters require substantial amount of data. When
observed data is limited , statistical estimates can be
supplemented (or even superceded) by judgemental
information using the Bayesian Approach (see[15]). Its
been shown that Bayes, Theorem is an effective tool for
updating prior probabilities (see[16]).
Bayes' theorem gives the rule for updating belief in a
hypothesis (i.e. its probability) given additional
evidence , and background information (context).
Bayes theorem can be extended using the Product Rule
from probability to multiple sequential updates and
applied to the conditional probabilities obtained after
decision analysis to update results as additional
information is collected.
Since Bayes theorem is an effective tool for updating
prior probabilities and since subjective information can
be analyzed using fuzzy set theory, the two theories can
be combined, called fuzzy-Bayesian to compute
posterior probabilities (see[16]). Fuzzy-Bayesian can
similarly be used to measure the value of additional
information.
The value of additional information (VI) can be
measured by (see[17]):
VI = E ( AI ) − E ( BI ) (1)
Where E(AI) is the utility or expected value of the
optimal alternative in the analysis after acquisition of
additional information and E(BI) is utility or value
before acquisition of additional information. If prior to
obtaining information, VI exceeds the cost of
information acquisition then the additional information
should not be acquired.
The value of the additional information however is
bounded by a limit referred to as the "value of perfect
information" (see[17]). The value of perfect
information (VPI) can be calculated in the using
Equation 1 but substituting VPI for AI. VPI represents
the maximum cost a decision maker can allow for
acquiring additional information.
3.4 Fuzzy Sets and Logic
One of the ideas of fuzzy sets and logic is that
artificial logic system can be developed to emulate the
linguistic way humans think and judge, yet achieve
consistency by following accountable rules (see[18]).
The power of fuzzy set theory is that it allows a
formalization of vague data, a representation of their
fuzziness that can be entered into computation and a
possibility theoretic interpretation (see[19]).
Fuzzy logic provides a means of performing
linguistic computations. One of the basic ideas of
fuzzy logic is that any statement employed in reasoning
will have a corresponding confidence level. Fuzzy
logic also provides rules for the truth of complex
statements. The confidence in a statement involving
AND is the minimum of the confidences in the
individual statements which make up the complex
statement. If the complex statement involves OR, the
confidence in the complex statement is the maximum of
the confidences in the individual statements.
Fuzzy sets and logic can be used to capture
qualitative domain expert opinion for an achievable and
affordable schedule. Although this technique cannot
substitute for deterministic scheduling methods, it does
complement the set of modeling methods thus enabling
a better and more extensive risk assessment in cases of
vague and incomplete project information.
4. MOB CASE STUDY
4.1 MOB Model Building
Risk-based MOB decision analysis is performed
using hierarchical modeling techniques to present
discrete event simulations for potential construction
concepts and scenarios (5 five separate concepts and
2 different scenarios , (see[20], [21]). One of these
concepts is used in this paper to demonstrate
application of methodology.
 Several software vendors provide programs available
for both discrete and continuous event simulations.
One such software product is Extend™ by Imagine
That, ® Inc. which is used herein. Extend is a general-
purpose graphically oriented, discrete event, and
continuous simulation software product.
The model layout for the rigid concept afloat
scenario is shown in Fig. 3 .
increase in total cost and schedule output variable is set
from 0% to 10%.
IF-THEN rules are composed for the fuzzy inference
engine to map input variable to output variable.
These rules are translated and executed with inputs
for 10 to 20 shipyards. The results from this fuzzy
analysis are given in Figure 4 and are used in
simulations.

Erect Erect Erect

Percent Increase in Total Cost

Blocks Blocks 10
Blocks Blocks
for GB1 for GB3
for GB1 for GB2
Assemble 8
Assemble

and Schedule
GB3
GB1
Blocks Blocks Assemble
Lower 6
GB2
Hulls for GB2 for GB3

4
Start 1st 2nd 3rd
Column Outfit
Column Column 2
set set set
0
1st Brace 2nd 3rd Brace 10 12 14 16 18 20
set Brace set set
Number of Shipyards in Concept and Scenario

Figure 3: Rigid Concept Afloat Scenario Model Figure 4: Fuzzy Assessment of Construction
Layout Management Conditions

The network layout in Fig. 3 is the basis for the
model produced with the Extend software. The heavy
lines signify the critical path. Each MOB concept and
general scenario has some common components and
input distributions. There were a total of 9 concept
scenario combinations (see[20], [21]). Only details of
one, the rigid concept with afloat assembly is given in
this paper.
4.2 Fuzzy Assessment of Construction Management
Conditions
Construction management conditions impact a given
concept cost and schedule due to the complexity and
dependence of integrating components from several
facilities. The uncertainty involved is subjective and
thus incorporated into simulation using fuzzy analysis.
FUZZLE 3.0 a fuzzy logic inference shell for
development of rule-based system applications to
control, diagnostics and decision aid system is used.
Two variables are defined for this fuzzy analysis.
The input variable is the number of shipyard involved
in a given concept and scenario which is a measure of
the complexity involved. The output variable is the
percentage increase in total cost and schedule.
Membership functions for the variables are
formulated by a possibility distribution function taking
values between 0 and 1. Three triangular membership
functions, small, medium, and large are defined per
variable. The range of the number of shipyard input
variable is set from 10 to 20. The range of the percent
For example, there are 12 shipyards involved in the
rigid afloat concept and scenario, thus the simulated
results for cost and schedule are increased by 1.3 % to
account for construction management conditions.
4.3 MOB Design of Experiments
Design of experiments for MOB construction
simulation involves the determination of the number of
simulation cycles that meet precision and accuracy
requirements. To determine the accuracy of simulation
results the number of cycles necessary to achieve an
acceptable error level in the estimate of a given MOB
concept and scenario schedule duration and cost are
computed from the results of an initial 50 cycle run. A
standard 95% confidence level is assumed. Use is
made in this design of experiments of cost and schedule
estimates that are preliminary with a precision in the
15% order of magnitude. In simulating based on this
data, a simulation accuracy (e) equal to 1% of the cost
and schedule of any given MOB concept and scenario
module is specified which is one order of magnitude
more than the precision of the input data and should
improve results.
With a 95% confidence level and a specified
accuracy (e), the minimum number of cycles (n) per
simulation run are given by:
σ2
n = 2 (1.96) 2 (2)
e
Simulations with 50 cycles are run for each concept
and scenario combination and equation 2 is applied to
 765

Mean Schedule Duration

determine the minimum number of simulations for 760
755
assumed confidence levels and specified accuracy. For 750

(Days)
the rigid concept is found that a minimum of 47 and 15 745
740
runs for schedule and cost respectively are required. 735
Thus the minimum required runs for both cost and 730
725
schedule is 47. 0 1000 2000 3000 4000 5000
Having found the minimum number of cycles Number of Simulation Cycles

required per simulation, the stability of the results from Figure 7: Mean Schedule Duration as a Function of the
simulation to simulation are investigated. Convergence Number of Simulation Cycles
tests of the coefficient of variation of the mean are done
to determine the number of cycles required to obtain
stable results. For 2000 cycles, the simulation results for all concept
The variation of coefficient of variation of the mean and scenario combinations are obtained (see[21]).
with number of cycles for the rigid concept afloat These results which apply the central limit theorem and
scenario is shown in Fig. 5. The variation of the mean use the normal distribution are used in the decision
of cost and schedule with number of cycles rigid model for decision analysis.
concept afloat scenario is shown in Fig. 6 and 7
respectively. 5. DECISION ANALYSIS

5.1 Objective of Decision Analysis

0.02 The main objectives applicable to the MOB
Coefficient of Variation Of

construction are minimizing total cost, minimizing total

0.015
schedule duration, optimizing total MOB length,
Mean

Cost
0.01
Schedule minimizing labor and safety impact, and minimizing
0.005 environmental impact. As such MOB construction
requires multiple objective decision-making. MOB
0
0 1000 2000 3000 4000 5000 objectives need to be stated in the same units, and
Number of Simulation Cycles weight factors that can be used to combine the
objectives need to be assigned. This requires
Figure 5: Coefficient of Variation of Mean Cost and
determination of objective weighting and utility for
Schedule as a Function of the Number of Simulation
multiple objective decision making.
Cycles
5.2 Objective Weighting
306 The relative weighting shown in Fig. 8 are assigned
Mean Cost (Millions $)

305
304
to the various MOB objectives.
303
302
301
300
299 Total MOB
Construction
298
297
0 1000 2000 3000 4000 5000
Number of Simulation Cycles Cost Schedule Length Labor and Safety Environmental
(35) Duration (20) Impact Impact
(25) (10) (10)

Figure 6: Mean Total Cost as a Function of the Number

of Simulation Cycles L e g e n d : Objective (weighting out of 100 total)

Figure 8: Weighting factors for MOB objectives

Figures 5 through 7 show that the simulation results
stabilize after 2000 cycles and no significant change in In setting the relative weights assigned to the various
coefficient of variation of the mean or mean cost or objectives in Fig. 8, a three step ranking procedure is
schedule is obtained with increased number of used (see [17]). First, ordinal ranking is performed,
simulation cycles. As such, 2000 cycles are adapted for whereby the 5 objectives are listed in decreasing order
use in all concept and scenario combinations. of importance. In Fig. 8, the objectives are ranked from
left to right in decreasing order of importance. Next,
the cardinal ranking of each of the objectives is
established. In this step, the relative importance of each
objective with respect to the other objectives is
evaluated by assigning numerical weights to each of the
objectives. Lastly, the weights are normalized such that
the sum of the weights equals 100 as shown in Fig. 8.
These weight factors can also be developed using
decision techniques such as the analytic hierarchy
process (see [22]) through pairwise comparisons of
objectives and solving the resulting matrix of
comparisons for its eigenvalues
5.3 MOB Objective Utility Functions
Taking into consideration the weighting factors given
to the various objectives, utility functions are derived.
The utility functions represent a decision makers
preference for various possible outcomes over the entire
range of possible future outcomes.
5.3.1 Cost Utility
The MOB is a U.S. Government funded venture and
the Government can be assumed to be risk neutral.
This is because the Governments subjective value of
the next dollar of saving or expenditure is the same as
the subjective value to the Government of the previous
dollar of saving or expenditure. The utility function is
therefore a straight line with the x-axis ranging from
$1,500 million to $6,000 million representing the
estimated range of MOB construction costs and the y-
axis ranging from 0 to 35 utility units to conform to the
weights given in Fig. 8.
5.3.2 Schedule Utility
It is estimated that, given concepts currently under
consideration, it is not possible to construct an entire
MOB in less than 4 years. As such, maximum utility is
derived from a 4-year schedule. It is also assumed that
any schedule greater than 12 years would have less than
zero utility to the owner. Schedule utility between 12
and 4 years is assumed to change proportionately. In
this utility function, the x-axis ranges from 0 to 12
years and the y-axis is shown from 0 to 25 utility units
to conform with the weights given in Fig. 8.
5.3.3 Length Utility
To meet operational requirements, MOB concepts up
to 1500 m (1 mile) in length are being considered.
Various concepts have module design such that the
physical configuration of the total MOB as a
combination of a given number of modules results in
total MOB length that varies with concept. In
establishing length utility, it is assumed that for the
envisaged operational requirements, a length less than
2000 feet would have no utility while a MOB total
length of 5000 feet or greater would have maximum
utility. In this utility function, the x-axis varies from
2000 to over 5000 feet while the y-axis is shown from 0
to 20 utility units to conform to the weights given in
Fig. 8.
5.3.4 Labor, Safety and Environmental Impact Utility
From an owner’s perspective, a MOB that has
acceptable labor and safety impact and that does not
adversely impact the environment is required. As such,
the owner has maximum utility for a MOB that meets
these requirements and no utility for a MOB that does
not. If the objective of labor, safety and environmental
impact are acceptable, the maximum utility is obtained.
If not acceptable, zero utility is perceived. Therefore, a
discrete assignment is used herein.
5.4 Definition of Decision Variables
The decision variables are the feasible options or
alternatives currently envisaged for the MOB. These
include Concept, Scenario, Labor and Safety Impact
and Environmental Impact. For the Concept variable
the ranges are Rigid, Hinged, Independent, Flexible, or
Concrete and Steel. For the Scenario variable the ranges
are Afloat Assembly or Terrestrial Assemble. For the
Labor and Safety Impact variable the ranges are
Acceptable or Unacceptable. And for the Shipyard site
environmental impact variable the ranges are
Manageable or Prohibitive.
5.5 Definition of Decision Outcomes, Associated
Probabilities and Consequences
5.5.1 Fuzzy Assessment of Labor, Safety, and
Environmental Impact
The uncertainty involved in assessing labor, safety,
and environmental impacts is subjective and thus
incorporated into simulation using fuzzy analysis. Two
fuzzy inference models are set up. One for labor and
safety impact analysis and one for environmental
impact analysis.
In labor and safety impact analysis three variables
are defined for fuzzy analysis. The input variables are
the expense and the time required for a given concept
and scenario which are an indicator of the strain on the
site labor market and possibility of safety hazards. The
output variable is labor and safety impact acceptability.
In environmental impact analysis three variables are
defined for fuzzy analysis. The input variables are the
size of the principle shipyard involved in lower hull
construction in a given concept and scenario and the
scenario itself which are measures of the requirements
for site modification with resultant environmental
impact. The output variable is an environmental impact
rating
Membership functions for the variables are
formulated. Triangular membership functions are
defined and the range variables is set. For output
variables, two membership functions are defined. The
range of the impact ratings given by the output
variables is set from 0 to 1. Rules, composed for the
fuzzy inference engine to map input variable to output Ingalls Shipyard
Figure 11 Total Expected Utility
variable, are developed. Six rules are developed for Alabama Shipyard
Similar to Figure 11 Total Expected Utility
both labor and safety impact analysis and five Afloat Assembly
Cost Utility = 33 Avondale Shipyard
environmental impact analysis. For example, one of Schedule Utility = 8
Similar to Figure 11 Total Expected Utility

the rules developed for environmental impact analysis Newport News Shipyard
Similar to Figure 11 Total Expected Utility

is: Kvaerner Shipyard

Similar to Figure 11 Total Expected Utility
RULE 1:IF { Shipyard Size is tiny OR Shipyard Size NASSCO
Similar to Figure 11 Total Expected Utility
is very small OR Shipyard Size is small } AND
Concept is Terrestrial THEN Environmental Impact is Newport News Shipyard
Similar to Figure 11 Total Expected Utility
Terrestrial Assembly
prohibitive Cost Utility = 32
Schedule Utility = 6

Figure 10: Portion of Decision Tree for Rigid Concept

5.5.2 Fuzzy Translation and Utility Mapping
Scenario and Shipyard Selection
These rules are translated and executed and the
possibility given by the fuzzy inference engine for the
occurrence of a given output is obtained. This Manageable Environmental Impact
possibility represents a subjective degree of confidence Acceptable Labor and Safety Impact P=0.8 , U=10
in the truth of the proposition that a given outcome will P=0.6 , U=10 P=0.2 , U=0
occur. The possibility value is a subjective Prohibitive Environmental Impact
interpretation of probability. The possibility value is Manageable Environmental Impact
normalized and is used as the probability in the decision P=0.4 , U=0 P=0.8 , U=10
trees. Unacceptable Labor and Safety Impact P=0.2 , U=0
The cost and schedule results obtained from concept Prohibitive Environmental Impact
and scenario simulations are mapped to the respective
Figure 11: Portion of Decision Tree for Rigid Concept
utility function to obtain the utility of the results. The
Labor, Safety and Environmental Impact Outcome for
total lengths of the various MOB concepts are mapped
Ingalls Shipyard
to the length utility function to obtain the utility of each
concepts total length (see [21]). The utilities are
incorporated into decision trees.
Fig. 9 through Fig. 11 are used to illustrate how the
total expected utility is computed. The expected branch
5.6 Decision Trees
utility is computed for the end of the right-most
Selected parts of the decision tree for the MOB are
decision node in Fig. 11. At decision nodes, the branch
depicted in Fig. 9 through Fig. 11. The decision nodes
with the highest utility is chosen while at chance nodes,
are identified in the model using a square symbol and
the expected utility is computed.
the chance nodes are identified with a circle symbol.
For example, the total expected utility for the Ingalls
Shipyard, utilized for afloat assembly of the rigid
Rigid Concept : Length Utility = 12 concept is obtained as follows:
Figure 10
Length Utility = 12 (From Fig. 9)
Hinged Concept : Length Utility = 20
Similar to Figure 10 Cost Utility = 33 (From Fig. 10)
Independent Concept : Length Utility = 19
Schedule Utility = 8 (From Fig. 10)
Similar to Figure 10 Labor and Safety Impact Utility = 6 (From Fig. 11)
Environmental Impact Utility = 16 (From Fig. 11)
Similar to Figure 10
Flexible Concept : Length Utility = 20 Total Expected Branch Utility = 75
Similar to Figure 10 This procedure is used to compute expected branch
Concrete and Steel Concept: Length Utility = 15
utilities for the entire MOB (see[21]).
Figure 9: Decision Tree for MOB Concept and
Scenario Selection 5.7 Sensitivity Analysis
The utility values for the various concepts and
scenarios as obtained from the decision trees are based
Only a portion of the decision tree required to on various parameters and assumptions, which are
represent the information for the MOB in this report is subject to change. One such parameter is the total
shown in Fig. 9 through Fig. 11. The entire decision MOB length necessary to meet operational
tree (see[21]) consists of Fig. 9, 5 figures similar to Fig. requirements. It is assumed that a MOB length of 5000
10 (one for each concept) and 25 figures similar to Fig. feet or greater has maximum length utility. A
11 (one for each shipyard in each concept). sensitivity analysis is done to examine the change of
concept and scenario total utility with a different
maximum utility MOB overall length. Due to changes When additional information is obtained, the
in scope of MOB operational requirements, a total probabilities used in the decision trees obtained from
MOB length of 6000 feet or greater may be appropriate. simulation and fuzzy analysis can serve as prior
Under this scenario, in establishing length utility, it is probabilities. These probabilities can then be updated
assumed that for the envisaged operational using Bayes' Theorem to obtain posterior probabilities.
requirements, a length less than 3000 feet would have In cases where some of the probabilities are fuzzy,
no utility while a MOB total length of 6000 feet or fuzzy-Bayesian updating is applied.
greater would have maximum utility.
In the resultant straight line utility function, the x- 6. CONCLUSIONS
axis varies from 3000 to over 6000 feet while the y-axis
is shown from 0 to 20 utility units to conform with the A fuzzy logic inference system is used to capture
weights given in Fig. 8. both quantitative and subjective information. This
A sensitivity analysis on these results with respect to information is used in discrete event simulation
increasing the entire MOB length to 6,000 feet yields networks to perform fuzzy stochastic modeling. A
the results given in Table 1 (see [21]). decision tree is fed both outputs of the fuzzy logic
inference system and the network simulation.
The decision analysis process combines the potential
Table 1. Sensitivity Analysis Results effects of cost, schedule, length, labor, safety and
Concept Scenario Utility Utility environmental impact to produce utilities to guide
(type of with 5000 with 5000 decision-makers. The sensitivity analysis results
assembly) foot MOB foot MOB demonstrate the effect on utility of specified changes in
required required selected inputs. Other variations may be examined as
Rigid Afloat 72 43 required by the decision-maker. For example the
Terrestrial 69 43 decision-maker may require that the results of the
Hinged Afloat 60 59 decision model be analyzed for sensitivity to variation
Terrestrial 62 61 in choice of cost and schedule probability of occurrence
Independent Afloat 66 62 and objective weighting. Not only could the factors
given be varied but also additional factors can be taken
Flexible Afloat 62 49
into account. For example, the decision-maker could
Bridge Terrestrial 63 51 request inclusion of an additional factor such as
Steel & Afloat 65 65 shipyard availability since the larger shipyards have
Concrete Terrestrial 48 46 greater utility but may not be available.
At the decision-makers discretion further
investigation may be done to obtain more discerning
This analysis is based on mean simulation results. results. Acquisition of further information has to
Table 1 shows that the rigid afloat concept has the balance investigation costs with the value of additional
greatest utility when the required MOB length is 5,000 of information. Any new information can be used to
feet while the steel and concrete afloat assembly has the update the risk-based decision analysis using Bayesian
greatest utility when the required MOB length is 6,000 or fuzzy-Bayesian updating.
feet. The independent, steel and concrete afloat Methodologies for the implementation of fuzzy-
assembly and hinged terrestrial assembly concept and stochastic risk-based analysis of alternative MOB hull
scenario total utilities are found to be insensitive to construction concepts are given. Fuzzy set
required length variation within the 5,000 to 6,000 foot quantification of MOB subjective information is
range. demonstrated. The use of Bayes Theorem for updating
The variation from shipyard to shipyard and from the state-of-knowledge of MOB cost and schedule
concept to concept is not large. The highest ranked and information as it is piecewise accumulated is discussed.
the next highest ranked concept, scenario and shipyard
have less than a 5% difference in utilities. This is an References
indication of the need for further investigation to obtain
more discerning results. Acquisition of further [1] R. J. Engemann,, H. E. Miller and R. M. Yager.
information has to balance investigation costs with the “A Decision Making Model Under Uncertainty
value of sample of information. The value of the Applied to Managing Risk” Uncertainty Modeling
additional information however is bounded by a limit and Analysis, Theory and Applications, Ayyub,
referred to as the value of perfect information as B.M. and Gupta, M.M., Editors , Elsevier, New
previously described. York, pp. 221-232, 1994.
[2] M. Modarres. What Every Engineer Should Know
About Reliability and Risk Analysis, Marcel
Dekker, Inc., New York, Basel, Hong Kong, 1993.
[3] H. Kumamoto and E. J. Henley. Probablistic Risk
Assessment and Management for Engineers and
scientists, IEEE Press, New York, 1996.
[4] G.-H. Teng and J.-Y. Teng. "Multiobjective
decision making with fuzzy problems for
infrastructure investment planning; a case of
transportation investment” Analysis and
Management of Uncertainty, Theory and
Applications, Ayyub, B.M., Gupta, M.M., and L.N.
Kanal Editors , Elsevier, New York, pp. 303-318,
1992.
[5] M. M. Gupta. “Intelligence, uncertainty and
information” Analysis and Management of
Uncertainty, Theory and Applications, Ayyub,
B.M., Gupta, M.M., and L.N. Kanal Editors ,
Elsevier, New York, pp. 3-12, 1992.
[6] A. Ibrahim and B. M. Ayyub. “Uncertainties in
Risk-Based Inspection of Complex Systems”
Analysis and Management of Uncertainty, Theory
and Applications, Ayyub, B.M., Gupta, M.M., and
L.N. Kanal Editors , Elsevier, New York, 247-262.
[7] E. M. Pate’-Cornell. “Uncertainties in Risk
analysis: Six levels of treatment” Reliability
Engineering and System Safety, Vol. 54, pages 95-
111, 1996.
[8] E. M. Pate’-Cornell. “Global Risk Management”
Journal of Risk and Uncertainty, Vol.12, pages 239-
255, 1996.
[9] M. H. M. Hassan and B. M. Ayyub. “Multi-
attribute Fuzzy Control of Construction Activities
Uncertainty Modelling and Analysis, Theory and
Applications, Ayyub, B.M. and Gupta, M.M.
Editors , Elsevier, New York, pp. 271-285, 1994.
[10] B. M. Ayyub and R.-J. Chao. “Uncertainty
Modeling in Civil Engineering with Structural and
Reliability Applications,” Uncertainty Modeling
and Analysis in Civil Engineering, Ayyub, B.M.
Editor , CRC Press, Washington, D.C., pp. 3-32,
1998.
[11] S. M. AbouRizk, D. W. Halpin and A. Sawhney.
“Modeling Uncertainty in Construction Simulation"
Uncertainty Modeling and Analysis, Theory and
Applications, Ayyub, B.M. and Gupta, M.M.,
Editors , Elsevier, New York, pp. 287-304, 1994.
[12] B. M. Ayyub and A. Haldar. “Project Scheduling
Using Fuzzy Set Concepts” J. Constr. Engrg. and
Mgmt., ASCE Vol.110 No.2, pages 189-204, 1984.
[13] G. Smith. Statistical Reasoning, Allyn and Bacon,
Needham Heights, Massachusetts, 3rd edition, 1991.
[14] B. M. Ayyub and R. H. McCuen. Probability,
Statistics and Reliability for Engineers, CRC Press,
Washington, D.C, 1997.
[15] A. H.-S. Ang and W. H. Tang. Probability
Concepts in Engineering Planning and Design,
Volume I Basic Principles, John Wiley and Sons,
New York, 1975.
[16] K. C. Chou and J. Yuan. Fuzzy-Bayesian
Approach to Reliability of existing Structures"
Journal of Structural Engineering, Vol. 119, No.
11, pages 3276-3290, 1993.
[17] A. H.-S. Ang and W. H. Tang. Probability
Concepts in Engineering Planning and Design,
Volume II Decision, Risk and Reliability, John
Wiley and Sons, New York, 1984.
[18] L. Chao and M. J. Skibniewski. “Fuzzy Logic for
Evaluating Alternative Construction Technology” J.
Constr. Engrg. and Mgmt., ASCE Vol. 124, No. 4,
pages 297-304, 1998.
[19] T. Fetz, M. Oberguggenberger, J. Jager, D. Koll, G.
Krenn, H. Lessman and R. F. Stark. “Fuzzy Models
in Geotechnical Engineering and Construction
Management” Computer-Aided Civil and
Infrastructure Engineering, Vol. 14, pages 93-106,
1999.
[20] W. J. Bender, B. M. Ayyub, and A. N. Blair.
Assessment Of The Construction Feasibility Of The
Mobile Offshore Base. To appear in Proce. Int.
workshop on Very Large Floating Structures, VLFS
’99, Honolulu, HI, 1999.
[21] B. M. Ayyub, W. J. Bender, and A. N. Blair.
"Assessment Of The Construction Feasibility Of
The Mobile Offshore Base: Part III - Construction
Risk Analysis," Office of Naval Research and Naval
Facilities Engineering Service Center, Code ESC
51, 1100 23RD Avenue, Port Hueneme, CA, 1999
[22] T. L. Saaty. The Analytic Hierarchy Process. RWS
Publications, Pittsburgh, PA, 1996.