Scenario based evaluation of a cost risk model through sensitivity analysis

Purpose – Actual costs frequently deviate from the estimated costs in either favorable or adverse direction in construction projects. Conventional cost evaluation methods do not take the uncertainty and correlation effects into account. In this regard, a simulation-based cost risk analysis model, the Correlated Cost Risk Analysis Model, previously has been proposed to evaluate the uncertainty effect on construction costs in case of correlated costs and correlated risk-factors. The purpose of this paper is to introduce the detailed evaluation of the Cost Risk Analysis Model through scenario and sensitivity analyses. Design/methodology/approach – The evaluation process consists of three scenarios with three sensitivity analyses in each and 28 simulations in total. During applications, the model’s important parameter called the mean proportion coefficient is modified and the user-dependent variables like the risk-factor influence degrees are changed to observe the response of the model to these modifications...

[1]  Heng Li,et al.  Neural network models for intelligent support of mark‐up estimation , 1996 .

[2]  Aminah Robinson Fayek,et al.  Use of fuzzy logic for predicting design cost overruns on building projects , 2002 .

[3]  Simon Smith,et al.  Dealing with construction cost overruns using data mining , 2014 .

[4]  Mark M. Maxwell,et al.  A macro approach to estimating correlated random variables in engineering production projects , 2007 .

[5]  Tariq Shehab,et al.  Cost-Estimating Model for Rubberized Asphalt Pavement Rehabilitation Projects , 2013 .

[6]  Tariq Shehab,et al.  Neural network cost estimating model for utility rehabilitation projects , 2013 .

[7]  I-Tung Yang,et al.  Simulation-based estimation for correlated cost elements , 2005 .

[8]  Wei-Chih Wang,et al.  Simulation‐Facilitated Model for Assessing Cost Correlations , 2002 .

[9]  M. Ranasinghe.  Impact of correlation and induced correlation on the estimation of project cost of buildings , 2000 .

[10]  Jui-Sheng Chou,et al.  Cost simulation in an item-based project involving construction engineering and management , 2011 .

[11]  Awad S. Hanna,et al.  New Approach to Developing Conceptual Cost Estimates for Highway Projects , 2011 .

[12]  David M. Wall,et al.  Distributions and correlations in Monte Carlo simulation , 1997 .

[13]  Kwong Wing Chau,et al.  Monte Carlo simulation of construction costs using subjective data , 1995 .

[14]  Byung-Soo Kim,et al.  The approximate cost estimating model for railway bridge project in the planning phase using CBR method , 2011 .

[15]  Jong H. Ock,et al.  Pricing construction risk: fuzzy set application , 1993 .

[16]  Rifat Sonmez,et al.  Conceptual cost estimation of building projects with regression analysis and neural networks , 2004 .

[17]  Wei-Chih Wang.  SIM-UTILITY: Model for Project Ceiling Price Determination , 2002 .

[18]  Garold D. Oberlender.  Project Management for Engineering and Construction , 1993 .

[19]  A. Touran.  Probabilistic Cost Estimating with Subjective Correlations , 1993 .

[20]  Ahmet Öztaş,et al.  Construction cost analysis under uncertainty with correlated cost risk analysis model , 2010 .