Calculating the Risk

674.3

CALCULATINGTHECAUXJLATEDRISK

David Stuhlbarg

Senior Project Engineer

The Fluor Corporation, Ltd.

2500 South Atlantic

Boulevard

Loa Angeles, California

90022

Presented At

AMERICAN ASSOCUTION COST

OF

ENGINEW

UTH NATIONAL MEETING, CLEVELAND, OHIO

JULY10-12, 1967

- 301 -

The

function

sign,

but to

fashion.

This

paper

nique

which

calculated

technique.

First,

of an engineer

design

in the

discusses

will

give

risk

as an

though,

what

is not

optimum

the engineering

such

a design,

integral

part

do we

individuals

whenever,

we think

the word

3.

Time,

too,

is important.

time

in severai

ways:

as

man

hours,

and as calendar

techand the

of this

risk?

1. As engineers,

we think

immediately

money,

which

enters

as both

capital

ment

and operating

costs.

2.

As

safety

just

to deeconomic

of

invest-

of personal

“risk”

is used.

We

personal

time.

4.

We can also

risk

reputation.

engineers

and to many

business

tions,

reputation

is almost

as

time,

money

or safety.

can risk

time

or

To most

organizaimportant

as

A consulting

engineering

firm,

for

example,

is very

leary

of taking

risks

which

might

seriously

damage

its reputation,

regardless

of

apparent

savings

or superficial

advantages.

However,

this

does

not mean

that

such

firms

do not or should

not take

justified

risks.

It

merely

means

the risk.to

reputation

must

be

minimized.

At Fluor,

we often

consider

alternate

designs.

If, after

adequate

study,

we

feel we are on fairly

solid

ground

and the savings

or advantages

to our

client

are

great

enough

to justify

a calculated

risk,

we will

point

these

out to him,

along

with

the nature

of the risk

involved.

If the risked

plan

fails,

damage

to reputation

is minimal

since

all

parties

were

aware

in advance

that

there

was

a risk.

If, on the other

hand,

the...