Asiedu, R O; Frempong, N K and Nani, G (2016) Parametric time overrun estimation of building projects. Journal of Financial Management of Property and Construction, 21(3), pp. 253-268. ISSN 1366-4387
Abstract
Purpose Time overruns are commonplace within the construction industry. These result in deception because project managers critically assess the economic and financial viability of a project before implementation. Forecasting the likelihood of time overruns will not only lead to a reconsideration on the decision to build but also help put in place the necessary control measures – exactly what this research achieved. Design/methodology/approach The paper argues that rather than depending on the critical failure factors that are unknown at the pre-contract stage to forecast the likelihood of occurrence, it will be more useful to rely on project attributes that are known before contract signing. A multiple linear regression analysis is used for the model development based on ten independent variables. Findings About 86.6 per cent of all the projects experienced time overruns. The mean time overrun is 106.5 per cent. Initial contract sum, initial duration, gross floor area, contractor class D2K2, competitive tendering, sole sourcing and single-storey buildings explained about 44.7 per cent of the variations within time overruns, with a mean absolute percentage error of 60.7 per cent. Research limitations/implications The predictive accuracy of the model can, in practice, be tested after the completion of a project by comparing the actual project schedule with the planned schedule. Any disparity in the expected outputs should result in a reassessment of the significant independent variables to improve the forecasting abilities of the model. Practical implications The model is expected to be very useful at the pre-contract stage when detailed designs are unavailable. As a decision support system, it will help the practitioners and decision-makers make informed decisions while minimizing the time and resources spent to arrive at these decisions. Originality/value This research presents a unique opportunity to forecast the likelihood of time overruns within the building sector based on project attributes that are known before the contract-signing phase.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Ghana; building; multiple regression; time overruns |
| Index terms: | practitioner, disparity, Ghana, failure factor, competitive tendering, variation, estimation, regression analysis, independent variable, forecasting, accuracy, implementation, decision support, construction industry, gross floor area, time overrun, project manager, methodology, duration, model development, financial viability, multiple-regression |
| Subjects: | financial and cost management, research methods, prediction and forecasting, analytical methods, industry analysis, tendering, professional development, building performance, practitioner, profession, risk assessment, statistical analysis, Geography, business management, social justice, decision analysis, contractual arrangements, project controls, contractual condition |
| Topics: | Ethics, Procurement, Engineering Principles, Cost Management, Time Control, Business Strategy, Contract Administration, Risk Management, Information Management, Design Practice, Roles and Professions, Research Practice, Geographical Context |
| Descriptive scope: | 4 PCTA |
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