Skitmore, M (1992) Parameter prediction for cash flow forecasting models. Construction Management and Economics, 10(5), pp. 397-413. ISSN 01446193
Abstract
The paper describes the application of the DHSS formula to 27 completed construction projects comprising four types - steel-framed low rise buildings, new build housing developments, housing refurbishment projects, and multi-house 'pre-paint' maintenance contracts. Application of the formula to individual projects indicates that the 'best' parameter values offer a ten-fold improvement over the published values based on project size. Similar results occur when using the best parameter values for other two parameter models. Various approaches are considered in attempting to predict the best parameter values of the models based on known characteristics of the project. A multiple linear regression with project value, duration, and type independent variables is shown not to produce any significant improvement on standard DHSS formula predictions. However, a reduction in the number of independent variables by cross validation produces an approximately 25 % improvement on standard DHSS formula forecasts outside the data base. Examination of the models derived from this analysis indicate the type of project to be of major importance.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | cash flow; cross validation; forecasts; project type; regression |
| Index terms: | independent variable, new-build housing, cash flow forecasting, duration, cash flow, maintenance contract, housing refurbishment, validation, construction project |
| Subjects: | statistical analysis, project controls, professional development, production management, maintenance engineering, financial management, economic development, renovation and retrofit, financial and cost management |
| Topics: | Time Control, Design Practice, Urban Studies, Cost Management, Business Strategy, Project Management, Research Practice, Information Management |
| Descriptive scope: | 3 PCA |
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