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The purpose of the chapter is to study the possibility of applying modern intellectual methods and technologies of decision-making for managing complex poorly structured systems.

The methodology of the chapter includes fuzzy cognitive approach, analysis of causal connections, dynamic modeling with application of the impulse processes tools, sustainability analysis of the studied system, and scenarios analysis.

The authors offer fuzzy cognitive approach to modeling the risk management system of commercial Bank POS-loaning processes. The simulated system is represented as a fuzzy-oriented weighted multigraph with a pulse action transmitted through it. The modeling process is implemented in the form of successive execution of the following stages: determining the goal, formation of fuzzy cognitive map, dynamic modeling with application of impulse processes tools, and scenarios analysis of development situation and selection the best.

The developed model of management system is a basis for analyzing the tendencies of various situations development that appear during work of banks in the express loaning segment. It allows forecasting and modeling the strategies of behavior as a reaction to external influences and to determine trajectories of management that allow reducing the internal risks of commercial Bank POS-loaning processes. Fuzzy cognitive approach is an effective tool for decision support during risk management in activities of a commercial bank and could be used for modeling and analysis of functioning and other poorly structured socioeconomic systems.

Several different simulation techniques, such as discrete event simulation (DES), system dynamics (SD) and agent-based modelling (ABM), have been used to model complex construction systems such as construction processes and project management practices; however, these techniques do not take into account the subjective uncertainties that exist in many construction systems. Integrating fuzzy logic with simulation techniques enhances the capabilities of those simulation techniques, and the resultant fuzzy simulation models are then capable of handling subjective uncertainties in complex construction systems. The objectives of this chapter are to show how to integrate fuzzy logic and simulation techniques in construction modelling and to provide methodologies for the development of fuzzy simulation models in construction. In this chapter, an overview of simulation techniques that are used in construction is presented. Next, the advancements that have been made by integrating fuzzy logic and simulation techniques are introduced. Methodologies for developing fuzzy simulation models are then proposed. Finally, the process of selecting a suitable simulation technique for each particular aspect of construction modelling is discussed.

Due to the increasing size and complexity of construction projects, construction engineering and management involves the coordination of many complex and dynamic processes and relies on the analysis of uncertain, imprecise and incomplete information, including subjective and linguistically expressed information. Various modelling and computing techniques have been used by construction researchers and applied to practical construction problems in order to overcome these challenges, including fuzzy hybrid techniques. Fuzzy hybrid techniques combine the human-like reasoning capabilities of fuzzy logic with the capabilities of other techniques, such as optimization, machine learning, multi-criteria decision-making (MCDM) and simulation, to capitalise on their strengths and overcome their limitations. Based on a review of construction literature, this chapter identifies the most common types of fuzzy hybrid techniques applied to construction problems and reviews selected papers in each category of fuzzy hybrid technique to illustrate their capabilities for addressing construction challenges. Finally, this chapter discusses areas for future development of fuzzy hybrid techniques that will increase their capabilities for solving construction-related problems. The contributions of this chapter are threefold: (1) the limitations of some standard techniques for solving construction problems are discussed, as are the ways that fuzzy methods have been hybridized with these techniques in order to address their limitations; (2) a review of existing applications of fuzzy hybrid techniques in construction is provided in order to illustrate the capabilities of these techniques for solving a variety of construction problems and (3) potential improvements in each category of fuzzy hybrid technique in construction are provided, as areas for future research.

There is a growing interest in fuzzy time series (FTS) forecasting, and several improvements are presented in the last few decades. Among these improvements, the development of causal models (i.e., multiple factor FTS) has sparked a particular literature dealing with the causal inference and its integration in the FTS framework. However, causality among variables is usually introduced as a subjective assumption rather than empirical evidence. As a result of arbitrary causal modeling, the existing multiple factor FTS models are developed with implicit forecasting failure. Since post-sample control (unknown future, as in the business practice) is usually ignored, the spurious accuracy gain through increasing factors is not identified by scholars. This paper discloses the use of causality in the FTS method, and investigates the spurious causal inference problem in the literature with a justification approach. It invalidates the contribution of dozens of previously published papers while justifying its claim with illustrative examples and a comprehensive set of experiments with random data, as well as real business data from maritime transportation (Baltic Dry Index).

This chapter discusses the application of fuzzy cognitive map (FCM) modelling to construction management (CM) challenges and problems. It focuses on the critical issue of managing the complexity and uncertainty inherent in CM by providing a new intelligent layer that enhances classical approaches to construction modelling and management. It investigates how the myriad types of internal and external factors affecting the feasibility and performance of construction projects can be modelled using a fuzzy hybrid method that explores the complex relationships among many contributing factors and assesses and evaluates their impacts on past and future projects. This chapter proposes a hybrid modelling approach in the traditional context of cost, schedule and risk management and describes how augmenting and enhancing existing state-of-the-art tools and processes in CM can assist construction managers. This chapter provides a background on the theory of FCMs, presents foundational and current research, and explains how to apply this approach in the CM domain. This chapter also provides a detailed description of how to develop, modify and employ interactive models to specific CM challenges and problems. It includes a customisable, interactive base model and demonstrates how the model has been applied to specific CM events and issues. Examples are presented that highlight the interplay between project-specific goals and characteristics and the way these impact the interrelated and often opposing triad of cost, schedule and risk. The presented examples and practical applications make this state-of-the-art approach useful to both academic and industry practitioners.

The robust appraisal of exploration drilling concepts is essential for establishing the economic viability of a prospective recovery field. This study evaluates the different concept selection methods that were considered for drilling operations at the Trym field in Norway. The construction of drilling rigs is a capital-intensive process, and it involves high levels of economic risk. These risks can be broadly categorised as aleatoric (i.e. those related to chance) and epistemic (i.e. those related to knowledge). Evaluating risks in the investment appraisal process tends to be a complicated process. Project risks are evaluated using Monte Carlo simulation (MCS) and are based on the fuzzy analytic hierarchy process (AHP). MCS provides a useful means of evaluating variabilities (i.e. aleatoric risks) in oil drilling operations. However, many of the economic risks in oil drilling processes are unanticipated, and, in some cases, are not readily expressible in quantitative values. The fuzzy AHP is therefore used to appraise the qualitatively defined indirect revenues comprising risks that affect future flexibilities, schedule certainty and health and safety performance. Both the Monte Carlo technique and the fuzzy AHP technique found that a cumulative revenue variation of up to 30% is possible in any of the considered drilling options. The fuzzy AHP technique estimates that the chances of profitability being less than NOK 1 billion over a five-year period is 0.5%, while the Monte Carlo technique estimates suggest a more conservative proportion of 10%. Overall, the fuzzy AHP technique is easy to use and flexible, and it demonstrates increased robustness and improved predictability.

Construction is a highly dynamic environment with numerous interacting factors that affect construction processes and decisions. Uncertainty is inherent in most aspects of construction engineering and management, and traditionally, it has been treated as a random phenomenon. However, there are many types of uncertainty that are not naturally modelled by probability theory, such as subjectivity, ambiguity and vagueness. Fuzzy logic provides an approach for handling such uncertainties. However, fuzzy logic alone has some limitations, including its inability to learn from data and its extensive reliance on expert knowledge. To address these limitations, fuzzy logic has been combined with other techniques to create fuzzy hybrid techniques, which have helped solve complex problems in construction. In this chapter, a background on fuzzy logic in the context of construction engineering and management applications is presented. The chapter provides an introduction to uncertainty in construction and illustrates how fuzzy logic can improve construction modelling and decision-making. The role of fuzzy logic in representing uncertainty is contrasted with that of probability theory. Introductory material is presented on key definitions, properties and methods of fuzzy logic, including the definition and representation of fuzzy sets and membership functions, basic operations on fuzzy sets, fuzzy relations and compositions, defuzzification methods, entropy for fuzzy sets, fuzzy numbers, methods for the specification of membership functions and fuzzy rule-based systems. Finally, a discussion on the need for fuzzy hybrid modelling in construction applications is presented, and future research directions are proposed.

Fluctuations in the tender price index have an adverse effect on the construction sector and the economy at large. This is largely due to the positive relationship that exists between the construction industry and economic growth. The consequences of these variations include cost overruns and schedule delays, among others. An accurate forecast of the tender price index is good for controlling the uncertainty associated with its variation. In the present study, the efficacy of using an adaptive neuro-fuzzy inference system (ANFIS) for tender price forecasting is investigated. In addition, the Box–Jenkins model, which is considered a benchmark technique, was used to evaluate the performance of the ANFIS model. The results demonstrate that the ANFIS model is superior to the Box–Jenkins model in terms of the accuracy and reliability of the forecast. The ANFIS could provide an accurate and reliable forecast of the tender price index in the medium term (i.e. over a three-year period). This chapter provides evidence of the advantages of applying nonlinear modelling techniques (such as the ANFIS) to tender price index forecasting. Although the proposed ANFIS model is applied to the tender price index in this study, it can also be applied to a wider range of problems in the field of construction engineering and management.