Published on

International Journal of Engineering Research and Applications (IJERA) is an open access online peer reviewed international journal that publishes research and review articles in the fields of Computer Science, Neural Networks, Electrical Engineering, Software Engineering, Information Technology, Mechanical Engineering, Chemical Engineering, Plastic Engineering, Food Technology, Textile Engineering, Nano Technology & science, Power Electronics, Electronics & Communication Engineering, Computational mathematics, Image processing, Civil Engineering, Structural Engineering, Environmental Engineering, VLSI Testing & Low Power VLSI Design etc.

Published in: Technology, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide


  1. 1. Yanhong Qin, Wentao Yan / International Journal of Engineering Research and Applications(IJERA) ISSN: 2248-9622 www.ijera.comVol. 3, Issue 3, May-Jun 2013, pp.1247-12511247 | P a g eResearch on risk assessment of underground logistics systemproject based on Grey Analytic Hierarchy ProcessYanhong Qin *, Wentao Yan ***(Department of Management, Chongqing Jiaotong University, China)** (Department of Management, Chongqing Jiaotong University, China)ABSTRACTThe reasons of the risk of cityunderground logistics system are discribed fromthree aspects of technology, careerman andenvironment,the risk evaluation index system isconstructed based on the method of analytichierarchy process,the Grey Analytic Hierarchymodel is established and the feasibility andvalidity of this evaluation model is verified byusing it in the risk assessment of a undergroundlogistics system project.Keywords - Grey Analytic Hierarchy Process, riskassessment,underground logistics system1. IntroductionAccording to the estimation of the relevantdepartments of the United Nations, half globalpopulation is living in the city in 2008 and themankind is entering into the "Century City"; but therapid development of the city also brings to the citya series of economic, social and environmentalproblems[1].Among them, the city traffic congestionas an important factor which affects thousands ofhouseholds’ daily travel , has restricted the cityoperation efficiency and the raise of city’scompetitiveness has become an important problemwhich is urgent to be solved in the world bigcities.In order to solve this problem, the UnitedStates, Japan, Holland and other countries haveturned their eyes to underground, hoping to reducethe ground traffic pressure through the developmentof underground logistics system and effectivelysolve the problem of traffic jams.But so far, there isnot a complete underground logistics system in theworld , so risk evaluation becomes a necessarymethod before the construction of undergroundlogistics project.Zheng Liqun,Wu Yuhua and soon(1999)[2]used the artificial intelligence method tosolve the problem of investment risk management,studied the feasibility of using artificial neuralnetwork method to do the riskevaluation,determined the risk investmentevaluation neural network structure and algorithmmodel , calculated the weights between nodes.DongXianzhou,Xu Peide(2001)[3]discussed the feasibilityof risk analysis based on Probabililistic RiskAssessment(PRA) method in the engineering projectand designed a risk analysis system based onPRA.Sun Shusheng,Liu Xiaokang(2009)[4]took themajor tasks of each stage of a logistics park projectinto account and analyzed the various risks existingin each stage and offered risk-hedging strategies andpreventive measures.This paper expounds the reasons forunderground logistics system risk from three aspectsof technology, talent and environment, creates therisk evaluation index system on the basis of thereasons, and then constructs the grey hierarchyevaluation model and case analysis, provides thebasis for the risk level of project risk management,proves this model’s effectiveness and feasibility inrisk assessment.2. The risk cause of underground logisticssystemFrom the view point of system,underground logistics system is a new concept oflogistics system.In the full life cycle of investment,there will be all kinds of uncertainty, each kind ofuncertainty will have an impact on the project andthe final result also depends on the influence ofinteraction of the uncertainty.2.1The technique is not matureUnderground logistics system as a newconcept has gained worldwide attention, but theresearch is still in the feasibility study and riskanalysis phase.There is not a completetransportation pattern, operation mechanism andtechnical specifications for reference in the world.These technical factors directly restrict thedevelopment of underground logistics system andbecome the key factor of underground logisticssystem risks.2.2The lack of professionalsIn 2013 Chinas dozens of universities inChina added the city underground space engineeringmajor, which marks the cultivation of undergroundspace engineering talents in China has just started,so the talents of underground logistic system aremuch rare. The lack of talents will affect theconstruction of the project, the operation of thesystem and the system of management, so the lackof professionals is one of the important reasons forunderground logistics system risks.
  2. 2. Yanhong Qin, Wentao Yan / International Journal of Engineering Research and Applications(IJERA) ISSN: 2248-9622 www.ijera.comVol. 3, Issue 3, May-Jun 2013, pp.1247-12511248 | P a g e2.3The uncertainty of the environmentThe uncertainty of the environmentincludes system internal environment uncertaintyand the uncertainty of external environment. Theinternal environment refers to update equipment,technology development and system improvement.The external environment includes politicalenvironment, financial environment and naturalenvironment. When project’s environment andconditions change, the project needs to change inorder to adapt to the new changes, this consequenceof change is unpredictable.This uncertainty ofenvironment is also one important reason for theunderground logistics system risks.3. The establishment of evaluation indexsystem of riskAccording to the reason of undergroundlogistics system risks, combined with the currentsituation of the development of undergroundlogistics in China, the risk analysis of undergroundlogistics system project are made according toscientific, systematic, operational and forward-looking principles. The risk evaluation index systemis set up as shown in Figure 1[5].The index systemhas three levels: the goal layer, the factor layer andthe index layer. The target layer is comprehensiverisk of underground logistics system, the factor layerrefers to all aspects of the impact and the index layercontains the refined indicators which react each riskfactor.figure1 the index system of risk assessment ofunderground logistics system4. Grey hierarchy evaluation model4.1Determine the weight of evaluation indexIn the established index system , theimportant degree of each index to the target isdifferent.The indexs should be given differentweights when measuring the effect of each index onthe object. The more important the index is,thegreater the weight value should be.There are a lot ofmethods to determine the weight , such as AHP(analytic hierarchy process), entropy method andfactor analysis method.The weights of the first levelindicators are:A={ai}(i=1,2,3,4)ai≥0,and they meet1a41ii .The weights of the second level indicatorare:Ai={aij}(i=1,2,3,4),j=1,2···m,aij≥0,and they meet1am1jij ,when i=1,2,3,4 then j=3,3,3,3.4.2Determine the rank of evaluation andevaluation index of sample matrixThe evaluation index of Uij is qualitativeindicator. In order to simplify calculation, thequalitative indexes often are turned into quantitativeindexes when the risk evaluation index system isestablished.Because of many kinds of risk factors ofunderground logistics system project and they havedifferent effects on the target, so the risk level isdivided into five dregees [6](low risk, fairly low risk,normal risk, fairly hign risk, high risk).The 1,3,5,7,9are used to assign the five dregees, when the riskindex dregee is between two corresponding levels,corresponding points are the average score of twoadjacent assignment value, named: 2,4,6,8.According to the formulated risk ratingstandard, n experts are organized to fill in the pointtable and give a score on the level of risk evaluation.So the sample evaluation matrix of theproject’construction risk can be got as D (assumingthe project evaluation risk has P factors, and thefinal evaluation factor has Q evaluation index):pqnpqpqnnndddddddddddd21212122111212212111112111Dfigure2 the sample matrix of scored pqn— score which the n expert gives based onthe P risk factor’s Q risk index4.3Determine the evaluation of grey and greyevaluation coefficientIn order to objectively reflect the influencedegree of risk,the evaluation of engineering projectrisk grey need to be determined.That is theevaluation grey level, grey number and thewhitenization weight function need to bedetermined[7]. The evaluation grey is divided intolow, fairly low, average, fairly high and high fivedregees in this paper, the order is expressed by e
  3. 3. Yanhong Qin, Wentao Yan / International Journal of Engineering Research and Applications(IJERA) ISSN: 2248-9622 www.ijera.comVol. 3, Issue 3, May-Jun 2013, pp.1247-12511249 | P a g e(e=1,2,3,4,5).The whitenization weight function isselected linear in this paper, the whitenizationweight function which corresponds grey number isshown as follows[8]: set X1=1, X2=2, X3=3, X4=4,X5=5.①low risk(e=1),grey number  2,1,01  ,thewhitenization weight function 1f is:    2,02,11,00211pqnpqnpqnpqnpqndddddf ⑴②fairly low risk(e=2),greynumber  4,2,02  ,the Whitenization weightfunction 2f is:    4,04,22,00)2/()4(2/2pqnpqnpqnpqnpqnpqnddddddf ⑵③normal risk ( e=3 ) ,greynumber  6,3,03  ,the Whitenization weightfunction 3f is:    6,06,33,00)3/()6(3/3pqnpqnpqnpqnpqnpqnddddddf ⑶④fairly high risk ( e=4,greynumber  8,4,04  ,the Whitenization weightfunction 4f is:    8,08,44,00)4/()8(4/4pqnpqnpqnpqnpqnpqnddddddf ⑷⑤high risk,grey number  10,5,05  ,theWhitenization weight function 5f is:    10,010,55,0015/5pqnpqnpqnpqnpqndddddf ⑸For the index of project risk evaluation ijU , thegrey evaluation coefficient of the assessed riskfactor which belongs to the e evaluation grey isijeM :mkpqneije dfM1)( ⑹Then the grey evaluation coefficients of variousother evaluation grays which belong to the categoryof the project are recorded as ijM :51eijeij MM⑺4.4 Calculate the grey evaluation weight vectorand weight matrixFor the evaluation index ijU , all of the evaluators’grey evaluation weight of project’s the e greyevaluation is ijer ,and:ijijeije MMr / ⑻For the evaluation project’s five grey’s greyevaluation weight vector ijr ,4321 ,,, ijijijijij rrrrr  , then get the grayevaluation weight matrix iR of risk evaluationindex ijU :ijmmimimiijijijiiiiiiiiiijiiiirrrrrrrrrrrrrrrrrrrrR321321333231232221131211321⑼4.5comprehensive evaluation①The calculation results of the comprehensiveevaluation of the second dregee risk factors ijU arerecorded as iB , it can be got by the followingformula:iii RAB  ⑽②The calculation results of the comprehensiveevaluation of the first dregee risk factors iU arerecorded as B , it can be got by the followingformula:iBAB  ⑾③The overall goal evaluation of the project riskThis paper uses 5 levels of gray value, thefirst gray class is 1, second gray class is 3, third grayclass is 5, fourth gray class is 7, fifth gray class is 9,so the evaluation of grey level value vector C =(1,3,5,7,9), the evaluation value of the project’sgeneral objective is:TCBZ  ⑿According to the value of Z to determine thelevel of risk and take appropriate measures toprocess and control of risk scientifically[9].5. The example analysisAccording to the calculation method ofgrey analytic hierarchy process, taking Beijing cityas an example.Beijing is a big city with a populationof more than 10 million and is facing seriousproblem of traffic congestion. Suppose Beijing is to
  4. 4. Yanhong Qin, Wentao Yan / International Journal of Engineering Research and Applications(IJERA) ISSN: 2248-9622 www.ijera.comVol. 3, Issue 3, May-Jun 2013, pp.1247-12511250 | P a g ebuild a city underground logistics system and therisk assessment is to be done.First invite 5 experts togive scores to grade one and grade two judgmentmatrix , after processing the data, the comprehensivejudgment matrix is obtained, and then use the AHPto determine the weight vector of grade oneevaluation index: A =(0.51,0.08,0.26,0.15);theweight vectors of grade two evaluation indexare 1A = ( 0.13,0.59,0.28 ) , 2A =( 0.18,0.71,0.11 ) , 3A = ( 0.09,0.29,0.62 ) ,4A =(0.11,0.31,0.58).Invite 5 underground spacedevelopment experts to give scores to the 12 gradetwo indexes in the index system and get theevaluation of sample matrix:537357365528337898776553535131343153295567251685178175546397TDFor the first evaluation index reliability oftechnology 11U , the calculation processes of itsevaluation coefficient are as follows: first calculatethe risk coefficients ijeM by the e evaluation grayclass.)()()()()(:1 11511141113111211111111 dfdfdfdfdfMe 0)4()6()3()9()7( 11111  fffff5.0)()()()()(:2 11521142113211221112112  dfdfdfdfdfMe3/5)()()()()(:3 11531143113311231113113  dfdfdfdfdfMe5.2)()()()()(:4 11541144113411241114114  dfdfdfdfdfMe6.4)()()()()(:5 11551145113511251115115  dfdfdfdfdfMeTherefore, the general evaluation coefficient 11M of therisk : 2.911511411311211111  MMMMMMThe gray evaluation weight is recorded as ijer :0/:1 11111111  MMre0543.0/:2 11112112  MMre1811.0/:3 11113113  MMre2717.0/:4 11114114  MMre5.0/:4 11115115  MMreThe grey evaluation weight vector of this risk is11r :)( 11511411311211111 rrrrrr  = ( 0 ,0.0543,0.1811,0.2717,0.5)Similarly, the general evaluation coefficient ofother indexs can be calculated , and the followinggrey evaluation weight vectors 12r , 13r , 21r ,22r , 23r , 31r , 32r , 33r , 41r , 42r , 43r canbe determined,so the grey evaluation matrixs can beestablished as follows:5172.04828.05.02155.02299.02717.00825.01149.01811.00616.00575.00543.01232.01149.001R2554.03781.03719.02793.02599.02324.02658.02212.01343.01197.01418.0155.00798.001033.02R9091.0434.02105.00909.03302.02227.001887.02429.000472.01619.0001619.03R4708.03777.03422.03071.02923.02139.01709.02401.02538.00512.00899.01901.00004RAccording to formulas ⑽and ⑾,B =(0.0582,0.0602,0.1146,0.2271,0.5297)The overall goal Z of the project risk evaluationcan be got according formula ⑿:Z =(0.0582,0.0602,0.1146,0.2271,0.5297)·(1,3,5,7,9)T=7.1688The comprehensive evaluation of theunderground logistics system project risk value canbe calculated as 7.1688 by the grey analytichierarchy process.It belongs to high risk accordingto the risk evaluation grade. Risk manager should dofurther analysis on the project risk combined withthe actual engineering project risk level, find out thehigh risk source and control it to ensure that theproject is in a low risk level.6. ConclusionCity underground logistics systemconstruction requires a large amount of money, as anew logistics system, it is very difficult to win theenterprises favor if without scientific andreasonable risk analysis of investment.And this willmake the underground logistics project which haspotential development ability lose opportunities fordevelopment in the early construction periodbecause of a shortage of funds.If people can predictthe risk level more accurately and control of iteffectively in construction project before investmentthen the enterprise and government will put moremoney into the underground logistics project, whichis conducive to the rapid development of
  5. 5. Yanhong Qin, Wentao Yan / International Journal of Engineering Research and Applications(IJERA) ISSN: 2248-9622 www.ijera.comVol. 3, Issue 3, May-Jun 2013, pp.1247-12511251 | P a g eunderground logistics system.This paper uses thegrey analytic hierarchy process, combined with theadvantages of analytic hierarchy process and greysystem, integrated of the qualitative and quantitativeanalysis, greatly reduce the influence of subjectivefactors in risk analysis and improve the assessmentaccuracy and effectiveness.In addition, theunderground logistic system project’s internal andexternal environment are changing alltime.Improving and perfecting the evaluation indexsystem and evaluation method according to theactual situation of project and making the riskevaluation results more practical is the researchdirection in the future.References[1] Sun Bindong, Study on the spatial strategyof big city’s traffic development in ourcountry -taking Shanghai as anexample(Nanjing:Nanjing Universitypress,2009).[2] Zheng Liqun,Wu Yuhua,Zhou Bokang,XiaQing,The application of artificial neuralnetwork(ANN) on investment riskevalucation,Journal of ManagementScience in China,2(4),1999:93-95.[3] Dong Xianzhou,Xu Peide,Design of RiskAnalysis System Based on ProbabilisticRisk Assessment,JOURNAL OF SYSTEMSIMULATION,13(6),2001:756-758.[4] Sun Shusheng,Liu Xiaokang,Risk Analysisand Control of Losgistic Park ProjectsBased on Life-cycle Management,Logisticstechnology,28(12),2009.[5] Qian Qihu,Guo Dongjun,An introduction tothe city underground logisticssystem(Beijing:China CommunicationsPress,2007).[6] Zhong Caigen,Liu Huixia,Deep foundationpit engineering risk source analysis andcountermeasures,Constructionsupervision,(6),2009:64-66.[7] Cai Jianchun,Wang Yong,Li Hanling,GreyHierarchy Evaluation for Investment Riskof Venture Capitial,Journal of IndustrialEngineering/EngineeringManagement,(2),2003:94-97.[8] JamesH.BoykinA.Ring,The Valuation ofReal Estate.Rogenss PrentieeHall.Ine.1993.[9] Duan Jinli,Zhang Qishan,Liu Weijia,Riskassessment model of information systembased on AHP method and GreyTheory,Journal of Guangdong Universityof Technology,23(4),2006:12-14.