Modeling Measures of Float Allocation for Quantitative Risk Management of Construction Projects
Risk is ever present and manifests itself in different ways in construction projects of all sizes and complexities. Its most recognizable and quantifiable form is schedule risk, which is related to float within a project, i.e. its flexibility to absorb delays. Allocating, owning, valuing, and expending such float in network schedules has been debated since the inception of the critical path method. This research investigates the first element of a three part approach that models how float may be mitigated by allocating, correlating, and valuing it so that it may eventually become traded as a commodity, an unrequited concept in construction engineering and management. Mathematical voting models that are based on the power of a single entity to change the outcome of an election are explored as analogies for the interactions of participants in construction projects: Disparate entities, here subcontractors, participate in a complex decision making process subject to constraints and uncertainties as to whether the project will be on time. Risk measurement is explored through the Penrose Banzhaf 'square root law' which allocates voting power based on the square root of the population where voting rights are not equally divided. It newly adapts this theory to allocate float among participants and their activities, who likewise have unequal individual durations, values, and positions in the network, based on the square root of their respective population elements: Schedule duration or contract value. Recognizing the impact of each entity on the project outcome represents the first element of the model allocating tradable float.