Alasad, R; Motawa, I and Ogunlana, S (2012) A system dynamics-based method for demand forecasting in infrastructure projects: A case of PPP projects. In: Smith, S D (ed.) Proceedings of 28th Annual ARCOM Conference, 3-5 September 2012, Edinburgh, UK.
Abstract
Concession contracts are one of the most popular PPP arrangements. However, there are still a few problems regarding the successful implementation of such arrangements, such as estimating a realistic figure for the demand of services offered by the facility. Lake of demand, or demand variation, is a widespread practice when developing infrastructure projects. In the case of concessions, such practices are the origin of significant risk as the forecasted demand is a key variable in the financial and economic evaluation of any PPP project that needs to be accurately identified and then managed. Demand forecasting is a complex and dynamic process, as several inter-related qualitative and quantitative factors affect demand. This paper proposes a system dynamics-based method in which different factors affecting demand are considered and modelled holistically. The system dynamics concept has been employed to build up a set of cause-effect diagrams which will finally be incorporated to develop a conceptual demand model. This model establishes the causal structure of the demand system, which will help to portray and define the impacts of different factors on demand volume.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | cause-effect diagrams; concession; demand forecasting; system dynamics |
| Index terms: | system dynamics, estimating, economic evaluation, implementation, infrastructure project, variation, concession contract, forecasting, causal structure |
| Subjects: | contract type, financial analysis, prediction and forecasting, contractual arrangements, contractual condition, infrastructure and transport systems, computing systems, structural engineering, financial and cost management |
| Topics: | Contract Administration, Engineering Principles, Research Practice, Procurement, Digital Applications, Cost Management |
| Descriptive scope: | 4 PCTA |
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