Stochastic Project Financing Analysis System for Construction

This paper presents an automated tool named the stochastic project financing analysis system (SPFA). The system makes use of critical path method (CPM) schedule data exported from Primavera Project Planner (P3), computes the best-fit probability distribution functions (PDFs) of historical activity durations, assigns to respective activities the probability density functions identified, simulates the schedule network, computes the deterministic and stochastic project cashflows, plots the corresponding cash-flow diagrams, and estimates the best-fitPDFs of overdraft and net profit of a project without user intervention at any time. The SPFA improves the reliability of project cash-flow analysis by effectively dealing with the uncertainties of the activities’ durations and costs, increases the usability of the schedule data obtained from commercial CPM software, allows the user to incorporate the contractual terms of payment into the cashflow, and effectively handles the variability of the overdrafts and net ...

[1]  Wilson H. Tang,et al.  Probability concepts in engineering planning and design , 1984 .

[2]  Dwight E. Smith-Daniels,et al.  USING A LATE-START RESOURCE-CONSTRAINED PROJECT SCHEDULE TO IMPROVE PROJECT NET PRESENT VALUE* , 1987 .

[3]  R. Padman,et al.  Heuristic scheduling of capital constrained projects , 1996 .

[4]  Amir M. Alani,et al.  A model for smoothing time‐series data in construction , 2003 .

[5]  Ammar Peter Kaka,et al.  Development of a company‐level dynamic cash flow forecasting model (DYCAFF) , 2003 .

[6]  A. Shtub,et al.  Scheduling projects to maximize net present value — the case of time-dependent, contingent cash flows , 1997 .

[7]  Sigmund J. Amster,et al.  Report: Statistical methods for reliability improvement , 1986, AT&T Technical Journal.

[8]  Ashraf Elazouni,et al.  Finance-based scheduling of construction projects using integer programming , 2004 .

[9]  Paulo S. F. Barbosa,et al.  A linear programming model for cash flow management in the Brazilian construction industry , 2001 .

[10]  C. Sepil,et al.  Project Scheduling with Discounted Cash Flows and Progress Payments , 1996 .

[11]  Owen D. Wilson,et al.  A construction project cash flow model—an idiographic approach , 1986 .

[12]  Paul Teicholz,et al.  Pre-Estimate Cash Flow Analysis , 1977 .

[13]  L. T. Boyer,et al.  Fair and Reasonable Markup (FaRM) Pricing Model , 1985 .

[14]  Chung-Wei Feng,et al.  Using genetic algorithms to solve construction time-cost trade-off problems , 1997 .

[15]  R. Hogg.  An Introduction to Robust Estimation , 1979 .

[16]  Rema Padman,et al.  Early-tardy cost trade-offs in resource constrained projects with cash flows: An optimization-guided heuristic approach , 1993 .

[17]  Arnold O. Allen,et al.  Probability, statistics and queueing theory - with computer science applications (2. ed.) , 1981, Int. CMG Conference.

[18]  David Arditi,et al.  Integrated Simulation System for Construction Operation and Project Scheduling , 2010, J. Comput. Civ. Eng..

[19]  W. Nelson.  Statistical Methods for Reliability Data , 1998 .

[20]  Kun-jung Hsu.  Project risk simulation under uncertain construction duration , 2004, Proceedings of the 2004 Winter Simulation Conference, 2004..

[21]  Tarek Hegazy,et al.  Simplified Spreadsheet Solutions. II: Overall Schedule Optimization , 2001 .

[22]  R. Wilcox.  Introduction to Robust Estimation and Hypothesis Testing , 1997 .

[23]  A. H. Russell.  Cash Flows in Networks , 1970 .

[24]  Ronie Navon.  Resource-based model for automatic cash-flow forecasting , 1995 .

[25]  Seung Heon Han,et al.  Multicriteria Financial Portfolio Risk Management for International Projects , 2004 .

[26]  Owen D. Wilson,et al.  A construction project net cash flow model , 1989 .

[27]  Llewellyn Tang,et al.  An entropy‐based financial decision support system (e‐FDSS) for project analysis in construction SMEs , 2009 .

[28]  Ashraf Elazouni.  Heuristic method for multi‐project finance‐based scheduling , 2009 .

[29]  Ammar Peter Kaka,et al.  A neural networks approach for cost flow forecasting , 1998 .

[30]  W. Edward Back,et al.  Multiple Simulation Analysis for Probabilistic Cost and Schedule Integration , 2002 .

[31]  Joseph G. Szmerekovsky,et al.  Scheduling projects with stochastic activity duration to maximize expected net present value , 2009, Eur. J. Oper. Res..

[32]  David Arditi,et al.  Detection and prevention of unbalanced bids , 2009 .

[33]  W. Edward Back,et al.  PROBABILISTIC FORECASTING OF PROJECT PERFORMANCE USING STOCHASTIC S CURVES , 2004 .

[34]  R. Navon,et al.  Company-Level Cash-Flow Management , 1996 .

[35]  Jeffrey S. Russell,et al.  Cash Flow Forecasting Model for General Contractors Using Moving Weights of Cost Categories , 2005 .

[36]  Peter Edward Bathurst,et al.  Building cost control techniques and economics , 1973 .

[37]  James T. O'Connor,et al.  Cash Flow Projections for Selected TxDoT Highway Projects , 2007 .

[38]  Tarek Hegazy.  Optimization of construction time-cost trade-off analysis using genetic algorithms , 1999 .

[39]  Philippe Jorion,et al.  Risk2: Measuring the Risk in Value at Risk , 1996 .

[40]  J. Patterson,et al.  Scheduling a Project to Maximize Its Present Value: A Zero-One Programming Approach , 1977 .

[41]  Osama Abudayyeh,et al.  Prototype Integrated Cost and Schedule Control System , 1993 .