Publications / 2000 Proceedings of the 17th ISARC, Taipei, Taiwan
The decision to invest in construction automation rests upon the financial and intangible benefits. Although a selection of associated costs may be obtained from suppliers or estimated using managerial judgement there is an inherent level of uncertainty surrounding the annual cash flows. Analysis of investment risk may play an important role in the introduction of automated construction technology to UK construction engineering. Stochastic risk simulation may be applied to analyse the uncertainty surrounding the investment decision faced by UK contractors and plant hire firms. Using Monte Carlo sampling techniques, risk profiles have been generated for a tele-operated system from a financial model replacing discrete estimations with a range of subjective probability density functions. It is concluded that there appears to be downside financial risk associated with the decision to invest in the chosen example system and that additional objective data is essential for accurate financial risk analysis. In opposition with the down-side risk associated with the chosen system, the nontangible rewards appear to favour investment in automated construction technology.