The fast changing environment and the complexity of projects has increased risk exposure. Traditional tools and technologies used in the process of risk management are not appropriate owning to its static analysis attribute. The project manager perceives the importance of taking prospective tools to face the challenge and keep the effort to control the project. This research proposes a project risk dynamics model to lead the project manager how to reallocate the contingency cost under the project scope change with a holistic view. By combining the process of risk management and system dynamics analysis in the project management, early signs of risk emergence, which would remain unperceived until problems would aggravate, can be identified in the project. Hence, the project manager can take better advantage offered by System Dynamics modeling, while enhancing the performance of the existing risk management process. Project scope change creates a series of effects and causes cost overruns that affect the schedule and lower performance in the long run. This research presents a risk dynamics framework that displays a trade-off process between cost and schedule and thereby attempts to revise the contingency cost and keep it under control. A pipeline work package is modeled and discussed. The fast changing environment and the complexity of projects has increased risk exposure. Traditional tools and technologies used in the process of risk management are not appropriate owning to its static analysis attribute. The project manager perceives the importance of taking prospective tools to face the challenge and keep the effort to control the project. This research proposes a project risk dynamics model to lead the project manager how to reallocate the contingency cost under the project scope change with a holistic view. By combining the process of risk management and system dynamics analysis in the project management, early signs of risk emergence, which would remain unperceived until problems would aggravate, can be identified in the project. Hence, the project manager can take better advantage offered by System Dynamics modeling, while enhancing the performance of the existing risk management process. Project scope change creates a series of effects and causes cost overruns that affect the schedule and lower performance in the long run. This research presents a risk dynamics framework that displays a trade-off process between cost and schedule and thereby attempts to revise the contingency cost and keep it under control. A pipeline work package is modeled and discussed.
