Relationship between value and duration for construction projects
2016-12-09T12:13:30Z (GMT) by
A strong relationship exists between the cost and duration of construction projects. This relationship can be used in contractors' budgeting systems and the corporate financial model developed at Loughborough University (Kaka, 1990). The client can use this relationship to estimate the approximate duration of a project and compare it with the proposed ones. Two samples were collected to model this relationship. Sample 1 contained 661 building projects with a total value exceeding £695 million, which included all types of commercial, industrial, residential and public projects. Sample 2 included 140 road contracts with a total value exceeding £120 million. The average ratio of actual time to the agreed time for road work is 1.0351. The ratio varies between a maximum value of 2 and a minimum of 1/3. The following stage of the analysis involved modelling the relationship for civil engineering and different types of building contracts. The two samples were classified according to type of project, form of contract and type of competition. Seven groups were modelled and tested visually for the difference in these relationships. The type of competition was found to have no effect on the relationship. Finally, six groups were modelled and the results of the constants of the relationships are listed. Public buildings and civil engineering projects were shown to fit accurately, while private buildings varied considerably. Interesting conclusions were drawn on the logic behind these differences.