Abstract
Many factors influence the success of apartment development projects, but it is difficult to quantitatively measure them. In terms of risk control, the five most direct influence factors are sales ratio, unit sale price, financial cost, land cost, and construction cost. These factors will vary during the project, from planning to land purchase to design to sale to construction, and the levels of these factors will also affect project performance. Therefore, it is necessary to dynamically forecast, control and monitor, and manage these factors in order to successfully implement apartment development projects. This study develops a dynamic simulation model to analyze the economic feasibility of apartment development projects. It draws a causal loop diagram of the aforementioned influence factors, develops a simulation model using system dynamics, and verifies the model with a case study of a 1,794-unit apartment development project. Using this simulation model, it is possible to quickly and easily simulate the economic effects of the risk factors that change throughout the project, analyze its economic feasibility, and develop a plan to reduce economic losses, if necessary. The simulation model can also identify the optimal conditions for project feasibility and develop a risk-control model for apartment development projects
Highlights
Numerous factors influence the success of apartment development projects (Rachmawati, Soemitro, Adi, & Susilawati, 2018)
This study develops a dynamic simulation model to analyze the economic feasibility of apartment development projects
The causal loop diagram is created after analyzing the influences of economic risk factors of apartment development projects such as sales ratio, unit sale price, financial cost, land cost, and construction cost
Summary
Numerous factors influence the success of apartment development projects (Rachmawati, Soemitro, Adi, & Susilawati, 2018). According to Park (2018), Won (2014), and Park, Kwon, Cho, and Paek (2008), the risk factors that directly impact the success or failure of a project include sales ratio, unit sale price, financial cost, land cost, and construction cost. These factors will, vary during the project cycle, from project planning to land purchase to design to sale to construction, and the levels of these factors will affect project performance (Park, Chu, Lee, & Kim, 2009). This study develops a dynamic simulation model to analyze the economic feasibility of apartment development projects. Lee et al A dynamic simulation model for economic feasibility of apartment development projects
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