Xie, H; Abourizk, S and Zou, J (2012) Quantitative method for updating cost contingency throughout project execution. Journal of Construction Engineering and Management, 138(6), pp. 759-766. ISSN 0733-9364
Abstract
This paper presents a method for project cost contingency forecasting and updating based on Value at Risk at a certain confidence level during project execution. The method is applied and demonstrated through an ongoing tunnel construction project lasting for several years. The method makes use of newly available information as the project progresses, and project daily cost and daily progress are analyzed and used as inputs for the quantitative model. The forecasts compare favorably with actual contingencies. The method provides opportunities to update contingencies at project milestones and to allocate appropriate contingencies at different project phases. This is beneficial for major companies which run multiple projects lasting for years, allowing them to set appropriate contingencies on certain timelines and to improve resource utilization.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | budgets; contingency updating; probabilistic forecasting; value at risk |
| Index terms: | project cost, tunnel construction, forecasting, quantitative method, resource utilization |
| Subjects: | prediction and forecasting, site logistics, economics, civil engineering, data analysis and analytics |
| Topics: | Cost Management, Engineering Principles, Research Practice, Site Management |
| Descriptive scope: | 4 PCTA |
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