1.1. Background of Construction
The construction of a complex structures is a major undertaking. That to in the public sector project feasibility and public support for future projects are partially based on the success of past projects. And in the private sector large complex structures can be financially rewarding or devastating for both the builder and owner. Most complex projects share the common theme that they are brought with risks and uncertainty that can cause cost escalations. For example, that about 80% of all projects begin the construction process with a high level of uncertainty. The construction project manager has a challenging tasks to build a complex project that is on budget. The primary focus of this research is to present a methodology that assist project managers to control cost when constructing a complex structure.
Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project (PMI 1997). These expectations revolve around the project’s scope, schedule, cost and quality. Project management functions consist of: scope, cost, time, human resources, communications, quality, contract/procurement, risk, and project integration (PMI 1997). This dissertation focuses on the cost control aspect of project management.
Project managers in the civil engineering and shipbuilding professions have long recognized the need for improvements in the area of cost control and managing costs includes estimating, scheduling, accumulating and analyzing cost data, and finally implementing measures to correct a cost problem. Current cost control techniques tend to focus on variances in line items once the cost overrun has been discovered. What is needed is a cost control methodology that proactively seeks out the potential cost issues and provides project managers with as much caution as possible before their occurrence.
A better cost control technique that would be anticipating potential cost issues by using simulation techniques to highlight potential areas that are prone to cost escalation is needed. Additionally, this analysis should be used to highlight areas where cost savings or a competitive advantage that may be gained. A reduction analysis methodology that helps to reduce cost issues in the execution phase of a project should be a dynamic process, constantly updated, as a new information becomes available. The new cost analysis information along with cost forecasting tools should be combined to better anticipate a project’s cost problems and completion costs.
This study presents a proposed methodology for cost control that interlines both reduction analysis and cost control techniques. The proposed methodology is applicable to the planning and execution phases for constructing a complex structure.
1.2. The Objectives
The primary objective of this research is to develop an Explorative methodology to control...