Al-Jibouri, S and Mawdesley, M J (2001) Development and application of a stochastic based cost prediction model for construction. Journal of Financial Management of Property and Construction, 6(1), pp. 61-69. ISSN 1366-4387
Abstract
This paper describes a study of the uncertainty associated with the cost of site work. For representing the stochastic nature of the likely cost of a piece of work, two parameters, the cost per unit earning and its standard deviation are proposed. These are used for interpreting cost measurements on site and estimating their variability. Based on these two parameters a cost model is developed and its use for control and forecasting is examined. For testing the practicality of the developed control model, real cost and earning measurements made on civil engineering projects are used. The collection, processing and the analysis of these measurements are carried out using a computer based control system. A forecasting technique is also developed on the basis of the cost model. Its accuracy is measured in terms of the differences between the actual cost of work and its forecasts produced on the basis of the information of the earlier periods. The paper discusses the variability of the results based on real construction projects and the effectiveness of the developed model for cost control. Application of the model has shown that the model provides an effective control mechanism. It has also shown that it can be produce reasonable forecasts of costs
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | cost model, construction, stochastic, forecasting |
| Index terms: | deviation, cost model, construction project, site work, variability, cost prediction, control system, forecasting, effectiveness, cost control, actual cost, accuracy, testing, estimating |
| Subjects: | financial and cost management, monitoring and control, professional practice, prediction and forecasting, site logistics, statistical analysis, production management, professional development, performance management |
| Topics: | Engineering Principles, Project Management, Information Management, Cost Management, Research Practice, Site Management, Business Strategy, Quality Management |
| Descriptive scope: | 3 PCA |
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