Ng, H S M N (2006) Dynamic decision support for contingency management and allocation for construction projects. PhD thesis, University of Illinois at Urbana-Champaign, USA.
Abstract
With the increasing size and complexity of construction projects, it is highly probable that the design and construction process will encounter problems, varying in different degrees in rework, delays, quality issues; all problems which translate into cost overruns. Cost overruns can be reduced by incorporating an appropriate amount of contingency into a project's budget. Contingency is included to provide the management team with the flexibility required to address risks and various deviations from the original plan. Contingency allocation have traditionally been estimated by adding a predetermined percentage of the budget to the total cost without consideration of the project characteristics, risks involved, or complexity of the project. Other methods include using an expert to estimate and allocate contingency and performing a risk and regression analysis, which are all static approaches that does not consider project dynamics. It is important to recognize the unique dynamics that exist in construction projects and their impact on contingency management. The objectives of this research are to explore the area of cost and contingency management and to present a dynamic decision support system for contingency allocation. The system dynamics methodology emphasizes the importance of viewing the management of contingency from a "systems perspective", so that better decision making about tradeoffs can be executed. System dynamics can produce a robust and holistic representation of the project providing a realistic project view. The dynamic decision support system for contingency allocation shows that certain project characteristics have a higher impact on contingency requirement. The results show that the complexity parameter has the highest impact on the contingency requirement. The desired quality also has a high impact on the contingency required. This research addressed the important issue of the causes of dynamic behavior in contingency allocation and management by building, testing and applying a dynamic simulation system of a multiple phase project. This research has contributed insights concerning the dynamics of projects in the area of contingency management, a tested framework for modeling projects based on demand for contingency, a systematic approach for project contingency analysis and a framework for improving the understanding of contingency allocation and management.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | Liu, L |
| Uncontrolled Keywords: | complexity; decision support; flexibility; contingency; decision making; regression analysis; simulation; cost overrun; construction project |
| Index terms: | methodology, decision-making, system dynamics, construction project, complexity, decision support, rework, tradeoff, dynamics, design and construction, quality issue, testing, estimate, modelling, regression analysis, cost overrun, deviation |
| Subjects: | decision analysis, systems engineering, statistical analysis, quality assurance, research methods, production management, operations management, analytical methods, financial and cost management, contractual arrangements, professional practice, computing systems |
| Topics: | Cost Management, Research Practice, Digital Applications, Risk Management, Procurement, Project Management, Engineering Principles, Quality Management |
| 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