Quantiative Methodology for Determination of Cost Contingency in International Projects

2007-01-01
This paper presents a quantitative methodology to determine financial impacts of the risk factors during the bidding stages of international construction projects. Project and country data of 26 construction projects from 21 countries were collected for evaluation of the international risk factors. The factors impacting cost contingency were identified using correlation and regression analysis techniques. The results indicated that four factors had major contributions for explaining the variations in the contingency levels. A regression model including the significant factors was developed to support bidding contingency decisions. The methodology presented provides a robust and practical statistical approach for determination of contingency by focusing on important risk factors. Details regarding model development and validation are presented along with a discussion on study limitations.
Journal Of Management In Engineering

Suggestions

Fuzzy Assessment Model to Estimate the Probability of Delay in Turkish Construction Projects
Gunduz, Murat; Nielsen, Yasemin; Ozdemir, Mustafa (American Society of Civil Engineers (ASCE), 2015-07-01)
The aim of this paper is to propose a decision support tool for contractors before the bidding stage to quantify the probability of delay in construction projects in Turkey by using the relative importance index (RII) method incorporated into fuzzy logic. For this purpose, 83 delay factors were identified, categorized into 9 major groups through a detailed literature review process as well as interviews with experts from the construction industry. The relative importance of these delay factors and groups wa...
Capacity allocation problem in flexible manufacturing systems: branch and bound based approaches
ÖZPEYNİRCİ, SELİN; Azizoğlu, Meral (Informa UK Limited, 2009-01-01)
This study considers an operation assignment and capacity allocation problem that arises in flexible manufacturing systems. The machines have limited time and tool magazine capacities and the available tools are limited. Our objective is to maximise total weight of assigned operations. We develop a branch and bound algorithm that finds the optimal solutions and a beam search algorithm that finds high quality solutions in polynomial time.
Robust portfolio planning in the presence of market anomalies
Oguzsoy, Cemal Berk; Güven, Sibel (Elsevier BV, 2007-02-01)
In this study, a short-term portfolio modeling formulation is developed using existing anomalies as a single determinant for daily Istanbul Stock Exchange National 100 Composite Index (ISE) and US dollars (USD) returns in a Robust optimization (RO) framework. Using anomalies in planning within an RO framework establishes a balance between risk seeking and risk averse behaviors, as generating profit from anomalies is risky and RO enables to settle down the extreme risk seeking behavior. Applications of the m...
Integrated framework to investigate value innovations
Dikmen Toker, İrem; Birgönül, Mustafa Talat (American Society of Civil Engineers (ASCE), 2005-04-01)
A conceptual framework has been developed to investigate value innovations within construction companies. A visual metaphor has been defined to model the innovation system where the elements of the model are objectives, strategies, environmental barriers/drivers, and organizational factors. The major idea is that none of the elements of the model alone can explain the innovative capability, and elements as well as their interrelations should be considered concurrently to investigate how the innovation syste...
Bank asset and liability management under uncertainty
Oguzsoy, CB; Güven, Sibel (Elsevier BV, 1997-11-01)
This study presents a multiperiod stochastic linear simple recourse model for asset and liability management in banking. The model determines the portfolio of assets and liabilities over the planning horizon given a set of deterministic rates of returns of investments and costs of borrowings, and a set of random outstanding deposit levels, liquidity and total reserve requirements with a given discrete probability distribution. The intention is to develop an optimization tool to assure sustained profitabilit...
Citation Formats
R. Sönmez and M. T. Birgönül, “Quantiative Methodology for Determination of Cost Contingency in International Projects,” Journal Of Management In Engineering, pp. 35–39, 2007, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/34995.