Unit Price or Lump Sum? A Stochastic Cost-Based Decision-Making Tool for Design-Bid-Build Projects

2018 ◽  
Vol 2672 (26) ◽  
pp. 11-20 ◽  
Author(s):  
Mohamed Khalafalla ◽  
Jorge Rueda-Benavides
Keyword(s):  
Decision Making ◽  
Cost Estimate ◽  
Cost Comparison ◽  
Unit Price ◽  
Project Delivery ◽  
Objective Criterion ◽  
Lump Sum ◽  
Design Bid Build ◽  
Decision Making Tool ◽  
Selection Of

The appropriate selection of procurement tools and strategies is a key factor in the successful completion of construction projects. Despite the increasing use of alternative project delivery methods by the public agencies, the traditional design–bid–build (DBB) approach is still the most used and accepted project delivery method in the US. The purpose of this study is to present an innovative tool that introduces an objective criterion into the selection of resurfacing projects for design–bid–build —lump sum (DBB-LS) projects. This criterion consists of a comparison of the stochastic construction cost estimate for a candidate project if procured under DBB-LS versus its stochastic cost estimate if a unit price (UP) approach is used. The proposed decision-making tool was developed using non-linear regression techniques, Monte Carlo Simulation, and data from 86 resurfacing projects completed by the Florida Department of Transportation (FDOT) between January 2015 and March 2017: 63 UP and 23 LS projects. To facilitate the use of the tool by decision makers, the mathematical functions involved in the cost comparison between these two approaches have been comprised into a nomogram, allowing a quick approximation of the probability of having a lower cost under each compensation approach and the potential savings or extra costs of using an LS provision. The nomogram also allows the estimation of potential LS cost implications under different confidence levels, providing FDOT with the ability to make decisions at different levels of risk.

scholarly journals INFORMASI AKUNTANSI DIFERENSIAL SEBAGAI ALAT PENGAMBILAN KEPUTUSAN MENYEWA ATAU MEMBELI GEDUNG PADA PT. BPR MILLENIA KANTOR CABANG PAAL DUA

2020 ◽  
Vol 15 (2) ◽  
pp. 211
Author(s):  
Miranda Ellora Kotambunan ◽  
Grace B Nangoi ◽  
Winston Pontoh
Keyword(s):  
Decision Making ◽  
Qualitative Method ◽  
Accounting Information ◽  
Accurate Information ◽  
Alternative Management ◽  
Branch Office ◽  
The Cost ◽  
Decision Making Tool ◽  
Selection Of ◽  
Rent Or Buy

Decision making is the selection of one of the various alternative actions available. In choosing an alternative, management requires precise and accurate information to reduce the possibility of failure of decisions that will be taken by the company. Differential accounting information is very suitable to be used in the selection of several alternatives. The purpose of this study is to determine whether differential accounting information can be used as a decision-making tool so that companies can decide whether to rent or buy a building as a place to operate its branch offices. This research uses descriptive qualitative method by collecting data through interviews and documentation. The results showed that differential accounting information as a decision-making tool can be applied at PT. BPR Millenia Paal Dua Branch Office and the cost to rent a building is lower than buying a building.

Building high-performing and integrated project teams

2020 ◽  
Vol 27 (10) ◽  
pp. 3341-3361
Author(s):  
Dominic D. Ahiaga-Dagbui ◽  
Olubukola Tokede ◽  
John Morrison ◽  
Anthony Chirnside
Keyword(s):  
Project Teams ◽  
Project Delivery ◽  
Structured Interviews ◽  
Content Type ◽  
High Performing ◽  
Study Approach ◽  
Lump Sum ◽  
Integrated Project ◽  
Design Bid Build

PurposeEffective inter-organisational relationships are key to engendering innovation and ensuring the successful delivery of infrastructure projects. Relationship-based contracts are thus widely used to stimulate best-for-project ideals and attenuate the otherwise adversarial relationship that often exists between clients and contractors. This study examines the effectiveness and limitations of a project facilitation model as coaching tool for developing conducive inter-organisational relationships for construction project delivery.Design/methodology/approachThe study adopts a case-study approach using evidence from triangulated data sources of focus group workshops, semi-structured interviews and document analysis.Findings(1) The facilitation model enabled an environment for psychological safety to be developed, which engendered a platform for effective cooperation for problem-solving and achieving quasi best-for-project ideals. (2) The model provides the mechanism to develop team behaviours that support enhanced performance and create an environment less adversarial and more collaborative than traditional contracting.Originality/valueThe novelty of this research is that relationship-based principles have been utilised as part of a traditional design-bid-build contract with lump-sum payment arrangements.

scholarly journals Project Delivery System Decision Making using Pythagorean Fuzzy TOPSIS

2019 ◽  
Vol 30 (4) ◽  
pp. 461-471
Author(s):  
Limin Su ◽  
Huimin Li ◽  
Yongchao Cao ◽  
Lelin Lv
Keyword(s):  
Decision Making ◽  
Fuzzy Sets ◽  
Similarity Measure ◽  
Similarity Measures ◽  
Fuzzy Topsis ◽  
Delivery Systems ◽  
Project Delivery ◽  
Ideal Solution ◽  
Negative Ideal Solution ◽  
Selection Of

The selection of project delivery systems is a complex decision-making process, which is also a critical task for owners. The complexity problem arises from the uncertainty of decision making environment and construction project itself. Pythagorean fuzzy sets (PFS), as an extension from intuitionistic fuzzy sets (IFSs) to deal with uncertainty information, has attracted more scholars’ attention in the decision making area. In this paper, we develop three similarity measures (i.e., 1-type PFSs similarity measure, 2-type PFSs weighted similarity measure, 3-type PFSs weighted similarity measure), and investigate their properties. Then an improved TOPSIS decision making framework is further established with PFSs information, in which the proposed similarity measures are employed to measure the similarity degree between each alternative and negative ideal solution and positive ideal solution. Finally, a case study of the selection of project delivery systems is presented to proof the performance of the proposed decision making method.

Selection of project delivery approach with unascertained model

Kybernetes ◽  
2015 ◽  
Vol 44 (2) ◽  
pp. 238-252 ◽  
Author(s):  
Huimin Li ◽  
Keli Qin ◽  
Peng Li
Keyword(s):  
Decision Making ◽  
Delivery System ◽  
Information Entropy ◽  
Construction Project ◽  
Project Delivery ◽  
Content Type ◽  
Decision Making Model ◽  
Uncertainty Environment ◽  
Delivery Approach ◽  
Selection Of

Purpose – The construction project is implemented under uncertainty environment, and the product of construction is very complex. Selecting a project delivery system/approach is a critical task, which determines the project schedule, quality and investment objectives. The purpose of this paper is to propose a decision-making model for the selection of project delivery system which is based on information entropy and unascertained measure model. Design/methodology/approach – A decision-making model based on information entropy and unascertained set is employed to select project delivery approach. In order to overcome the subjective evaluations from the experts, the theory of “entropy weight” is applied to modify the experts’ subjective weight. The multi-attribute unascertained measure decision making is fitted to deal with the uncertainty information for selection of project delivery system. Findings – The proposed methodology is more comprehensive compared with the previous work, especially in the uncertainty environment. Research limitations/implications – There is some further work that should be considered, such as how to deal with the imprecise and subjective information given by the experts; how to determine the weight of the experts’; finding a set of importance factors influencing the selection of a delivery system is a complex task to further research. Practical implications – The proposed method can help the construction owner to select a most fitted project delivery system of a construction project. Originality/value – A new approach to select project delivery approach is proposed based on information entropy and unascertained set.

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