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Project risk is a critical factor in estimating project budget. Previous studies on this topic have only addressed estimation methods that consider project budget reserves against identified risks. As a result, project managers still face the challenge of completing projects within given budgets but without the relevant tools to deal with unidentified risks. This study proposes an approach for estimating reserves for both identified and unidentified risks separately. The study also suggests using the three-point estimation technique and R-value determination for estimating risk costs, which can improve budget accuracy and precision. The construction of residential building projects in South Korea demonstrates the advantages of the proposed approach compared with previous methods.

Improving Project Budget Estimation Accuracy and Precision by Analyzing Reserves for Both Identified and Unidentified Risks