Consideration of Uncertain Future Demand and Decision Flexibility in the Determination of Intervention Programs for Buildings
Esders, Miriam Carolin
- Doctoral Thesis
Rights / licenseIn Copyright - Non-Commercial Use Permitted
One task of building managers is to ensure that their buildings function as required over a deﬁned period of time, while the ability of buildings to meet demands changes over time due to two reasons: (1) The change of the ability of the building to meet ﬁxed demands, normally through deterioration, and (2) the change of demands for the building. Building managers want to determine what they should do with their buildings at present to maximize their net-beneﬁt in the long term. This requires determining the intervention to be executed immediately and estimating the ones that might be executed in the future, i.e. determining an intervention program. This decision making process is supported through the modelling of deterioration and the determination of the optimal intervention program. The used models and methods often do not consider the uncertain future demands on the buildings. Although the assumption of non-changing demands is convenient from a mathematical modelling point of view, it is rarely true in the real world. Uncertain changes in demand make it undesirable to attempt to evaluate intervention programs now and then determine exactly which one to follow over the remaining planning horizon. Instead, uncertain changes in demand can make it desirable to ﬁnd ﬂexible solutions that consider the possibility to postpone decisions on the actual intervention program to implement to a later moment when more information will be available. Taking into consideration this ﬂexibility of management to decide which intervention program to follow is believed to be a cornerstone of any method to be used to determine optimal intervention programs in management systems where there is uncertainty with respect to future demand. To make a decision about whether to introduce decision ﬂexibility in intervention planning, it is necessary to evaluate the beneﬁts that the ﬂexibility can bring to the building management, in light of the uncertainty it is exposed to. In conditions characterized by high uncertainty, interventions programs developed with consideration of decision ﬂexibility enable building manager to adapt the system to new information and thus avoid losses or even seize opportunities. The main objective of this research is to investigate how to consider the decision ﬂexibility of the decision maker in the determination and evaluation of intervention programs with consideration of the uncertainty in future demand and to identify a method that can support a decision maker in the determination and evaluation of such intervention programs. In this thesis, a Real Options Method for the evaluation of intervention programs with consideration of decision ﬂexibility under uncertainty in changes in demand is presented and applied to a simple example of a ﬁctive oﬃce building and a real world example, a clinic of a Swiss university hospital. This method is based on Real Option Analysis and Decision Tree Analysis. To identify eligible intervention projects where the consideration of decision ﬂexibility is relevant, a methodology for the identiﬁcation and evaluation of intervention projects with consideration of decision and building ﬂexibility is presented and applied to the real world example. The Real Options Method for the evaluation of intervention programs with consideration of decision ﬂexibility and the methodology for the identiﬁcation and evaluation of intervention projects with consideration of decision and building ﬂexibility are applied by analysing the situation, building adequate models of the uncertain key parameters, establishing the static and dynamic evaluation models, identifying possible intervention projects, and evaluating these intervention projects with the method for the evaluation of intervention programs with consideration of decision ﬂexibility. The decision ﬂexibility about the interventions to be executed over the investigated time period is the focus of this thesis. For the real world example, however, three diﬀerent design alternatives are also considered, providing diﬀerent levels of decision ﬂexibility over the investigated time period. This design ﬂexibility can also be evaluated with the presented method for the evaluation of intervention programs with consideration of decision ﬂexibility. The ramiﬁcations of the results from the application of both the method and the methodology are analysed. The use of the method for the determination and evaluation of intervention programs with consideration of decision ﬂexibility shows that the method allows for appropriate consideration of decision ﬂexibility and, therefore, can lead to an increased beneﬁt for building managers. The expected net beneﬁts and optimal intervention program determined with the method with consideration of decision ﬂexibility are closer to reality, and thus enable better budget planning. The application of the method on this example showed that the Real Options Method required more eﬀort than the Traditional Method without the consideration of decision ﬂexibility before and during the evaluation for the deﬁnition of the ﬂexible decision making, the deﬁnition of the consequences of the decision making at these decision points and values over the investigated time period, and the calculation of the probabilities of execution for each possible time and value where a decision of execution is beneﬁcial. The method with consideration of decision ﬂexibility does not lead to better intervention programs for all components of a building, and thus should only be applied if management ﬂexibility is a possibility, the uncertainty of key parameters is high, and the intervention costs are high compared to the beneﬁts. The use of the methodology for the identiﬁcation and evaluation of intervention projects on the real world example shows that it can be applied to a real world situation and can deliver meaningful results. It strongly relies on stakeholder knowledge and requires good and extens-ive stakeholder communication throughout the complete process. Considerable simpliﬁcations regarding the selection of key parameters and models must be made throughout the process, to keep the complexity at a manageable level, though the methodology can be adapted to take in the level of complexity that is required for diﬀerent projects. The results from the application of the method on the simple and the real world example show that, even though the expected net beneﬁts from the evaluation with the method with consideration of decision ﬂexibility are higher than the ones from the Traditional Method, the diﬀerence is small for the given examples, within the error margin of the input parameters, which does not justify the additional eﬀort required to consider the ﬂexible decision process. This small diﬀerence is mainly due to the reduced impact that the uncertainty considered in the examples have on the expected net beneﬁts of the intervention program, but it is a result that is only possible to obtain through an adequate evaluation method as presented in this thesis. In such a situation, the decision maker can make a choice of which intervention program to follow, either with or without consideration of decision ﬂexibility. Also, during early steps of the methodology, a test can be made whether the considered case will have a signiﬁcant impact. Future research should also consider a deeper analysis of the probabilistic models used for the evaluation of intervention programs, which were in this thesis based on simpliﬁcations. Based on the given classiﬁcation of inﬂuence factors, changes in demand, and eﬀects, suitable methods for the modelling of changes in demands in connection with the changes of connected inﬂuence factors should be identiﬁed and tested for application. The consideration of decision ﬂexibility in the construction of intervention programs is not applicable for all building components, as the application is only beneﬁcial under certain conditions. It can be assumed that many of the intervention programs constructed for a complete building are determined without the consideration of decision ﬂexibility, resulting in inﬂexible intervention programs. Thus, the method and methodology with consideration of decision ﬂexibility investigated in this thesis have to be applied in the context of the management of related building components without consideration of ﬂexibility Show more
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ContributorsSupervisor: Adey, Bryan T.
Supervisor: Lethanh, Nam
Supervisor: Jones, Keith
Supervisor: Zhang, Xueqing
SubjectIntervention programs; Decision flexibility; Infrastructure management
Organisational unit03859 - Adey, Bryan T.
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