Motawa, I A; Khosrowshahi, F and Kaka, A P (2005) Development and evaluation of a company-level budgeting technique incorporating future construction contracts. In: Khosrowshahi, F (ed.) Proceedings of 21st Annual ARCOM Conference, 7-9 September 2005, London, UK.
Abstract
One of the main challenges facing construction contractors is incorporating future, unknown contracts into their annual financial budgets. This paper reviews current academic work in this area and argues that computer based simulation techniques are too complex to be adopted in the industry. Therefore, an alternative and a more simple technique need to be developed and evaluated for accuracy and usefulness. The paper demonstrates that as the pattern of winning construction contracts lacks any seasonality, it may be possible to assume all future work to be starting on one point in time, and by using an average standard value build up curve, average duration and the total value work needed, contractors may be able to estimate the number of contracts they will need to win over the following year. The paper evaluates the above assumption through hypothetical scenarios (developed using a detailed computer based simulation model) and two real case studies whereby company-level project data were analysed. Results showed that assumption of no seasonality needs to be revised and that a method by which a company specific average staring date is calculated should be developed.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | company-level; budgeting; cash flow; simulation |
| Index terms: | case study, cash flow, budgeting, accuracy, project data, construction contract, construction contractor, duration, estimate |
| Subjects: | project controls, professional development, financial management, financial and cost management, practitioner, contract type, data collection methods |
| Topics: | Time Control, Information Management, Research Practice, Business Strategy, Cost Management, Procurement, Roles and Professions |
| Descriptive scope: | 3 PCE |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here