Liu, M and Luo, M (2025) Cost estimation model of prefabricated construction for general contractors based on system dynamics. Engineering, Construction and Architectural Management, 32(1), pp. 621-638. ISSN 0969-9988
Abstract
Purpose: The poor capacity of prefabricated construction cost estimation is the essential reason for the low profitability of the general contractor. Therefore, this study aims to focus on the cost estimation of prefabricated construction as the research object. This research aims to enhance the accuracy of total project cost estimation for general contractors, ultimately leading to improved profitability. Design/methodology/approach: This study used Vensim PLE software to establish a system dynamics model. In the modeling process, a systematic research review was used to identify cost-influencing factors; ABC classification and the analytic hierarchy process were used to score and determine the weights of influencing factors. Findings: The total cost error obtained by the model is less than 2% compared with the actual value. It can be used to cost estimation and analysis. The analysis results indicate that there are 7 key factors, among which the prefabrication rate has the most significant impact. Furthermore, the model can provide the extreme range cost; the minimum cost can reduce by 13% from the value in the case. The factor's value can compose a cost control strategy for general contractors. Practical implications: The cost of prefabricated buildings can be estimated well, and deciding the prefabrication rate is crucial. The cost can be declined by correct cost control strategies when bidding and subcontracting are in process. The strategies can follow the direction of the model. Originality/value: A systemic, quantitative and qualitative analysis of cost estimation of prefabricated buildings for general contractors has been conducted. A mathematical model has been developed and validated to facilitate more effective cost-control measures.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | cost estimation; general contractor; prefabricated construction; system dynamics |
| Index terms: | bidding, qualitative analysis, system dynamics, cost control, methodology, accuracy, project cost, strategy, general contractor, cost estimating, mathematical model, prefabricated building, modelling, prefabrication, profitability, estimation, construction cost, subcontracting, influencing factor |
| Subjects: | risk assessment, mathematical modelling, research design and methodology, computing systems, financial and cost management, management, economics, professional development, organization, practitioner, bidding, analytical methods, economic analysis, research methods, building construction |
| Topics: | Risk Management, Procurement, Engineering Principles, Supply Chain Management, Roles and Professions, Construction Technology, Business Strategy, Cost Management, Information Management, Research Practice, Digital Applications |
| 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