Abstract
Construction cost and duration are two critical project indicators. It is acknowledged that these two indicators are closely dependent and highly uncertain due to various common factors and limited data for explanatory model calibration. However, the stochastic dependence underlying construction cost and duration is usually ignored and the subsequent probabilistic analysis can be misleading. In response, this study develops a Nataf distribution model of building cost and duration, in which the uncertainties of total cost, unit cost, and duration are respectively quantified by univariate distribution fitting, while their stochastic dependence is inferred by maximum likelihood estimation. This method is applied to the costs and durations of 77 China residential building projects completed between 2011 and 2016. The goodness of fit test illustrates that the data conform well to the developed model. The conditional distributions of cost and duration are then derived and the corresponding conditional expectations and variances are given. The results provide the distribution of building costs for a desired duration and the expected duration given a budget. This, together with the ability to update probabilities when new project information is available, confirms the potential of the proposed model to benefit precontract decision making from a risk perspective.
Highlights
Construction cost and duration are two critical project indicators
Several studies indicate that construction cost can be used to estimate the construction time (Bromilow 1969; Ogunsemi, Jagboro 2006) while some works explore the influence of duration delays on cost overrun (Huo et al 2018; Lo et al 2006)
This paper proposes a probabilistic model based on the Nataf distribution to address the dependent uncertainties associated with building cost and duration
Summary
Construction cost and duration are two critical project indicators. It is widely considered that construction cost and duration are interrelated (Bromilow 1969; Žujo et al 2017). From the owner’s perspective, determining the planed budget demands a good understanding of the dependence between construction cost and duration. Some planners may prioritize financial and budgetary factors in early project planning while others would consider completion on time of paramount importance. Understanding this dependency between construction cost and duration help planners to select reasonable duration according to the budget limit and make reasonable decision according to their risk preference
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
