Cost Breakdown Structure Research Articles

Influence of macroeconomic factors on construction costs: an analysis of project cases

This study explores the relationship between price increase and project cost increase under macroeconomic shocks by considering the hierarchical structure within price categories, diversification of the cost breakdown structure, infrastructure sector, delivery system, construction methods, and type of bid. The analysis of a large construction company with five large projects as embedded units of analysis reveals significant variations in the relative influence of specific factors across the projects. Unit price categories located higher in the hierarchical breakdown structure display lower vulnerability to macroeconomic changes due to their unique and group-specific influencing factors while price categories influenced by macroeconomic factors depart at lower values in the hierarchical structure. Projects with low-cost breakdown structure diversification can either mitigate or exacerbate cost increases depending on construction methods (off-site or on-site), price drivers of most representative materials (global or local), and delivery systems risk allocation. Under macroeconomic crisis periods, public entities may consider giving high priority to projects more reliant on materials driven by regional dynamics (e.g., concrete pouring) over those driven by global market conditions (e.g., steel, aluminum) while prioritizing integrated delivery systems (e.g., design-build) that promote enhanced collaboration, proactive risk management, aligned incentives, and adaptability for managing complexities and volatilities. Complementary, for projects with higher reliance on global market-driven materials, the results suggest that contractors should prioritize early procurement and acquisition of highly volatile resources in projects under macroeconomic crises.

Factors that influence the application of the concept of new green areas in residential areas using structural equation modeling-part least square (sem-pls

Climate change and global warming or environmental damage and degradation have led to various natural disasters, social disasters and serious economic disasters. Global warming has increasingly affected not only our daily lives but also our business activities. Housing and settlements are one of the basic human needs that must be met to be able to live decently. However, human life and its business activities have not paid enough attention to environmental issues. Excessive exploitation of non-renewable energy beyond normal limits is also damaging to the environment. The application of the new green area concept is a consequence of the increase in the cost of green areas incurred by stakeholders so that residential areas become environmentally friendly, the concept of new green areas, Value Engineering (VE), Life Cycle Cost Analysis (LCCA) are the main factors that influence the improvement of cost performance of implementing the concept new green areas in residential areas in Indonesia, using structural equation model- partial least square (SEM-PLS) analysis. This research has an update related to the concept of applying new green areas to residential areas in Indonesia. The results of this study obtained "10 factors that affect the cost performance of new green areas in residential areas", namely Project Management, Infrastructure and Facilities Burdens, Infrastructure and Facilities Service Functions, Microclimate and Ecosystem Preservation, Environmentally Friendly Materials, Development, Cost Breakdown Structure, LCC Analysis, Evaluation, Value Engineering.

Demolish or Rebuild? Life Cycle Cost Analysis and Maintenance Plan for the Pro-Get-One Case Study

It is well known that a large part of the existing Italian and European building stock needs to improve its seismic and energy performances through deep renovation projects. Both seismic safety renovation and energy rehabilitation projects have high initial costs; therefore, owners and property developers often prefer the strategy of a complete demolition and reconstruction of the building. Perhaps this can be the easiest choice, but sustainability must be assessed from an environmental, social, and economic point of view. A Life Cycle Analysis using the Global Cost method, considering initial, operating, maintenance, and end-of-life costs, can provide important information to help key players identify the best intervention strategy for the selected case. Therefore, a strategic feasibility analysis is needed for each deep renovation building construction project to evaluate the efficiency of the proposed alternative approaches, i.e., deep renovation or demolition and reconstruction, in terms of cost and building sustainability. With the Life Cycle Cost analysis (LCC) technique, the two project alternatives have been evaluated, also with the aim of optimizing detailed design choices to minimize Life Cycle Cost. The LCC minimization plays a fundamental role in the strategic planning of the project approach, and the Cost Breakdown Structure of building maintenance activities detects the most significant elements, termed central elements, that have a major impact on maintenance costs. The optimization of maintenance costs of central elements can increase the economic sustainability of the deep – renovation or reconstruction alternative projects. The case study of the “ProGETonE - Proactive Synergy of Integrated Efficient Technologies on Buildings’ Envelopes” has been analyzed. ProGETone is a European research project concerning a deep renovation of an existing university building via the construction of a prefabricated steel exoskeleton.

Leveraging the 4th Industrial Revolution Technology for Sustainable Development of the Northern Sea Route (NSR)—The Case Study of Autonomous Vessel

The Fourth Industrial Revolution (4IR) technology has been applied to various industrial areas not only to improve economic efficiency but also to obtain environmental and safety benefits. We paid attention to the unresolved issues of Arctic development to establish a balance between economic feasibility and social values and suggest the 4IR technologies as the solution for this. The master concept of application of the 4IR technology to NSR sailing is presented. Further, we conducted a case study for autonomous vessels. A cost breakdown structure model is specified to compare the total costs of traditional and autonomous vessels. Then, we conducted scenario analysis to investigate the economic and social effects of autonomous vessels by season and route. The results show that autonomous vessels have economic benefits compared to the traditional vessel even in the winter season, and if we realize autonomous vessels in the NSR, there are more cost saving effects than in the Suez Canal Route (SCR) in any season. As for the environmental benefits, autonomous vessels have lower gas emissions and reduced water disposal compared to the traditional vessel. Further, autonomous vessels could be a solution to provide a better crew working environment by minimizing the number of people on board. The contribution of this research is that, first, we utilize real fuel oil consumption measurement data to estimate the voyage expenses, and, second, this is a novel attempt of applying the 4IR technology as a solution for the Arctic development issue. In this respect, this research is expected to serve as a cornerstone for future research, and it will help to establish Arctic development strategies in Arctic or non-Arctic countries.

Predefined Project Scope Changes and its Causes for Project Success

In project management, the project scope is the base of significant project planning processes such as estimating the cost, schedule and building work breakdown structure. Poor project scope definition directly affects project cost and schedule. Accordingly, dealing with unrealistic scope definition of cost and schedule may lead to failing a project. Besides, changes in project scope have a negative and positive impact on project success. This paper aims to predefine the potential scope changes to keep the project scope on track and identify any weakness in scope definition at the early stages of a project. Enhancing project scope quality has a massive impact on the success of a project and it adds more control over project scope. A method is proposed to improve the quality of project scope and increase the efficiency of controlling scope changes. The proposed method will help to avoid scope creeping by defining a clear statement of work, increase the learning opportunities of the development team to optimize its processes, reducing the communication gap between the clients and development team and screen adjustments of new tasks. The proposed method is validated using a survey and the results are found encouraging.

An economic assessment framework for decommissioning of offshore wind farms using a cost breakdown structure

PurposeAs wind power generation increases globally, there will be a substantial number of wind turbines that need to be decommissioned in the coming years. It is crucial for wind farm developers to design safe and cost-effective decommissioning plans and procedures for assets before they reach the end of their useful life. Adequate financial provisions for decommissioning operations are essential, not only for wind farm owners but also for national governments. Economic analysis approaches and cost estimation models therefore need to be accurate and computationally efficient. Thus, this paper aims to develop an economic assessment framework for decommissioning of offshore wind farms using a cost breakdown structure (CBS) approach.MethodsIn the development of the models, all the cost elements and their key influencing factors are identified from literature and expert interviews. Similar activities within the decommissioning process are aggregated to form four cost groups including: planning and regulatory approval, execution, logistics and waste management, and post-decommissioning. Some mathematical models are proposed to estimate the costs associated with decommissioning activities as well as to identify the most critical cost drivers in each activity group. The proposed models incorporate all cost parameters involved in each decommissioning phase for more robust cost assessment.Results and discussionA case study of a 500 MW baseline offshore wind farm is proposed to illustrate the models’ applicability. The results show that the removal of wind turbines and foundation structures is the most costly and lengthy stage of the decommissioning process due to many requirements involved in carrying out the operations. Although inherent uncertainties are taken into account, cost estimates can be easily updated when new information becomes available. Additionally, further decommissioning cost elements can be captured allowing for sensitivity analysis to be easily performed.ConclusionsUsing the CBS approach, cost drivers can be clearly identified, revealing critical areas that require attention for each unique offshore wind decommissioning project. The CBS approach promotes adequate management and optimisation of identified key cost drivers, which will enable all stakeholders involved in offshore wind farm decommissioning projects to achieve cost reduction and optimal schedule, especially for safety-critical tasks.

Predefined Project Scope Changes and its Causes for Project Success

In project management, the project scope is the base of significant project planning processes such as estimating the cost, schedule and building work breakdown structure. Poor project scope definition directly affects project cost and schedule. Accordingly, dealing with unrealistic scope definition of cost and schedule may lead to failing a project. Besides, changes in project scope have a negative and positive impact on project success. This paper aims to predefine the potential scope changes to keep the project scope on track and identify any weakness in scope definition at the early stages of a project. Enhancing project scope quality has a massive impact on the success of a project and it adds more control over project scope. A method is proposed to improve the quality of project scope and increase the efficiency of controlling scope changes. The proposed method will help to avoid scope creeping by defining a clear statement of work, increase the learning opportunities of the development team to optimize its processes, reducing the communication gap between the clients and development team and screen adjustments of new tasks. The proposed method is validated using a survey and the results are found encouraging.

Floating Offshore Renewable Energy Farms. A Life-Cycle Cost Analysis at Brindisi, Italy

The present paper deals with the Life-Cycle Cost (LCC) of an offshore renewable energy farm that is currently a topic of interest for operators and investors. The LCC analysis refers to the Cost Breakdown Structure (CBS) considering all the phases of life span, and it has been carried out for floating offshore wind farms (FOWFs) and hybrid wind-wave farms (HWWFs). For HWWFs, this paper proposes a hybrid wind-wave energy system (HWWES), which provides the coupling of wave energy converter (WEC) with Tension Leg Platform (TLP) or Spar Buoy platform (SB). The LCC analysis has been carried out considering: (i) FOWF consisting of TLP floating platforms; (ii) FOWF consisting of a SB floating platforms; (iii) HWWF realized with the conceived hybrid system coupling the WEC with the TLP platform; (iv) HWWF realized with the conceived hybrid system coupling the WEC with SB platform. In addition to the LCC evaluation, the Levelized Cost of Energy (LCOE) analysis has also been carried out. The site chosen for the study is off the port of Brindisi, southern Italy. This work’s interest lies in having performed a LCC analysis for FOWF and HWWF in the Mediterranean that is an area of growing interest for offshore renewable energy, and obtained results have allowed making assessments on costs for offshore energy farms.

Predicting BIM labor cost with random forest and simple linear regression

The benefits of adopting Building Information Modeling (BIM) in a construction project have been well recognized. However, it involves additional labor costs and the timeliness of task completion should be considered because a BIM application may not be required (and paid for) by the owner in the current stage of BIM development. At present, a project manager often faces much risk in making decisions about the cost because the BIM labor cost is supposed to be proportional to the gross (or total) floor area in practice, and the project managers can only adopt simple linear regression to estimate it. Although this method is straightforward, it tends to have a high risk of estimation error. Therefore, this research tried to develop a new methodology based on Cross Industry Standard Process for Data Mining (CRISP-DM) and proposed a hybrid approach by combining Random Forest (RF) and Simple Linear Regression (SLR) for improving the accuracy of prediction on a project's BIM labor cost in construction phase. Case studies are conducted to demonstrate and validate the prediction results using nineteen completed BIM projects from a leading construction company in Taiwan. A cost breakdown structure (CBS) was proposed to establish the training data set for machine learning. Moreover, this study proposes the use of effective floor area, instead of gross floor area, to be one of the features for training RF and SLR models. Clustering analysis is also adopted and confirmed to improve model performance. Through comparative studies, the hybrid approach of prediction methodology proposed in this study has been proved to be effective in reducing the risk of BIM labor cost prediction.

The Combination of Project Construction Management and Lean Construction Techniques in the Architectural Project

Main goal of Project Construction Management and Project Management is to delivery a project within scope, times and costs planned, obtaining a high quality standard. Instead, Lean Construction is focused on minimizing waste, in favor to creating maximum value for the client. The question to which this empirical research wants to answer is following: the integration of Project Construction Management and Lean Construction techniques could affect positively the respect of times and costs planned? To answer to the question it ideated a method that integrates the techniques of two methodologies. Then it applied in the architectural project of simulation in order to show the potentiality of the method. The workflow divided into three stages. At first stage, they identified the individual assegnments through Work Breakdown Structure. At second stage, it defined the Organizational Breakdown Structure. At last stage they planned the construction times and costs through Priced Bill of Quantity, Cost Breakdown Structure, Gantt Chart and Last Planner® System. The hypothesis on expected results deriving from the application of the method and they could led to thinking an improvement of project performance in terms of times and costs planned, respect to only Project Construction Management techniques. Future researches could be experimental, involving enterprises ed implementing the methodology in real study cases, using also the Building Information Modelling.

A framework for collaborative air traffic flow management minimizing costs for airspace users: Enabling trajectory options and flexible pre-tactical delay management

This paper proposes a collaborative air traffic flow management (ATFM) framework, in the scope of trajectory based operations, aiming to improve the cost-efficiency for airspace users (AUs) when facing ATFM regulations. The framework consists of four modules. The first one involves the AUs initially scheduling their preferred trajectories for all their flights. Based on this initial demand, the second module (assumed to be on the Network Manager -NM- side) detects time-varying hotspots (i.e. overloaded sectors along the day). In the third module, hotspot information is shared back to the AUs who plan alternative trajectory options to avoid crossing these congested airspace volumes (in the lateral and vertical domain); as well as providing to the NM different pre-tactical delay management preferences (including ground holding, linear holding, air holding and pre-tactical delay recovery); based on their internal cost breakdown structures. Incorporating all these potential combined options, the last module computes the best trajectory selections and the optimal distribution of delay assignments, such that the cost deviation from the initial status (all the user-preferred trajectories) is minimized. This model is formulated as mixed integer linear programming (MILP) and validated by a real-world case study focused on 24 h of traffic over the French airspace. Results using the proposed framework suggest a significant system delay reduction by nearly 97% over the existing method, whilst yielding an average of less than 100 kg extra fuel consumption and 50 Euro extra route charges for the 11% flights diverted to their alternative trajectories.

A framework for analytical cost estimation of mechanical components based on manufacturing knowledge representation

This paper presents a novel framework for manufacturing and cost-related knowledge formalization. This artefact allows industries to capitalize the knowledge of experienced practitioners in the field of manufacturing and assembly, so that it can be used by designers for quickly and analytically estimating the production costs of components during product development. The framework consists of the following: (i) a cost breakdown structure used for splitting out the manufacturing cost, (ii) a data model (cost routing) to collect the knowledge required to define a manufacturing process, (iii) a data model (cost model) for collecting the knowledge required to compute the manufacturing cost of each operation within a manufacturing process, and (iv) a workflow to define the manufacturing process. The proposed framework provides several advantages: (i) knowledge formalization of product manufacturing cost, (ii) knowledge sharing among design/engineering departments, and (iii) knowledge capitalization for decision-making process. The proposed framework is used to formalize the knowledge required for analytically estimating the manufacturing cost of open-die forged components. Results highlight that the framework addresses the most important requirements for a knowledge-based cost estimation system.

Integration of Cost and Work Breakdown Structures in the Management of Construction Projects

Scope management allows project managers to react when a project underperforms regarding schedule, budget, and/or quality at the execution stage. Scope management can also minimize project changes and budget omissions, as well as improve the accuracy of project cost estimates and risk responses. For scope management to be effective, though, it needs to rely on a robust work breakdown structure (WBS). A robust WBS hierarchically and faithfully reflects all project tasks and work packages so that projects are easier to manage. If done properly, the WBS also allows meeting the project objectives while delivering the project on time, on budget, and with the required quality. This paper analyzes whether the integration of a cost breakdown structure (CBS) can lead to the generation of more robust WBSs in construction projects. Over the last years, some international organizations have standardized and harmonized different cost classification systems (e.g., ISO 12006-2, ISO 81346-12, OmniClass, CoClass, UniClass). These cost databases have also been introduced into building information modeling (BIM) frameworks. We hypothesize that in BIM environments, if these CBSs are used to generate the project WBS, several advantages are gained such as sharper project definition. This enhanced project definition reduces project contradictions at both planning and execution stages, anticipates potential schedule and budget deviations, improves resource allocation, and overall it allows a better response to potential project risks. The hypothesis that the use of CBSs can generate more robust WBSs is tested by the response analysis of a questionnaire survey distributed among construction practitioners and project managers. By means of structural equation modeling (SEM), the correlation (agreement) and perception differences between two 250-respondent subsamples (technical project staff vs. project management staff) are also discussed. Results of this research support the use of CBSs by construction professionals as a basis to generate WBSs for enhanced project management (PM).

A Super Simple Life-cycle Cost Estimation Model with Minimum Data Requirement

Life-cycle costing is a practical approach to estimate the total cost of ownership in product-service systems. In high-value manufacturing sectors, due to the complication of overhaul invoices, shop visits, repair and maintenance interventions, identifying service cost reduction opportunities can be complex. Moreover, quantifying the impact of key cost drivers on the total cost is challenging due to the lack of complete historical data and high level of uncertainties within the service cost data. To address these challenges, a super simple life-cycle cost model architecture is presented. A set of minimum data requirements is identified for the development of the presented cost model. The model architecture comprises of life-cycle cost breakdown structure and work breakdown structure to specify the cost drivers, unit costs and their frequencies. A bottom-up activity-based cost estimation approach is implemented to calculate the total life-cycle cost of a product. The way that the minimum data requirement is applied to the cost estimation structure is explained. In addition, the minimum data is employed to perform a deterministic sensitivity analysis to compare the relative impact of the model input on the total cost. The Monte-Carlo simulation is performed for estimating the uncertainty propagation on the total life-cycle cost. The presented model architecture simplifies life-cycle cost estimations and service control decisions for maintenance, repair, and overhaul actions. A case study of life-cycle cost estimation in the machine tool industry is considered for testing the validity of the cost model architecture.

P-3-15 未利用森林バイオマスの破砕作業のコスト構造に関する一考察

P-3-15 未利用森林バイオマスの破砕作業のコスト構造に関する一考察

Inventory Cost Analysis Work in Process (Wip) Under Focus of Lean Accounting, Simulation and Optimization Scenarios

In this research, we present a cost analysis of the materials that are in a queue to be processed, better known as work-in-process inventory (WIP, for its acronym in English).The inventory in process will be analyzed with three models: 1. A system of waiting lines, 2. Lean Accounting and 3. Simulation of discrete events that helps measure the benefits of Lean Accounting, applying an objective function to determine the minimum cost of WIP. This was obtained by applying a key tool called Simrunner. A cost breakdown structure was also established at each stage of the process. The present work is of interest to the administrators and managers of the Lean team and useful for short-term decision making.

Life Cycle Cost Analysis and Optimization of Modular Substation

Due to the lack of high standardization and specialization, the production scale of modular substation is difficult to meet the established requirements. Compared with traditional substation construction, there are still practical problems such as high production costs. Therefore, it is still difficult to promote modular substation. Considering the life cycle of modular substation project, Cost Breakdown Structure (CBS) and Engineering Breakdown Structure (EBS) of the modular substation were defined through literature reading and data analysis. Then use the life cycle cost mapping model to further determine the mapping relationship between CBS and EBS. Finally, the connotation and goal of the life cycle cost optimization of modular substation were proposed, which can effectively promote the cost management of modular substation projects and optimization.

Life-cycle cost as basis to optimize waste collection in space and time: A methodology for obtaining a detailed cost breakdown structure.

Extensive research has been carried out on waste collection costs mainly to differentiate costs of distinct waste streams and spatial optimization of waste collection services (e.g. routes, number, and location of waste facilities). However, waste collection managers also face the challenge of optimizing assets in time, for instance deciding when to replace and how to maintain, or which technological solution to adopt. These issues require a more detailed knowledge about the waste collection services' cost breakdown structure. The present research adjusts the methodology for buildings' life-cycle cost (LCC) analysis, detailed in the ISO 15686-5:2008, to the waste collection assets. The proposed methodology is then applied to the waste collection assets owned and operated by a real municipality in Portugal (Cascais Ambiente - EMAC). The goal is to highlight the potential of the LCC tool in providing a baseline for time optimization of the waste collection service and assets, namely assisting on decisions regarding equipment operation and replacement.

Design of a safety cost estimation parametric model in oil and gas engineering, procurement and construction contracts

The purpose of this research is to identify parameters that govern safety costs in oil and gas projects. An initial conceptual model was proposed to identify the contractual position of safety management system in engineering, procurement and construction (EPC) projects, followed by identification of safety work packages and estimated costs per package. Next, a work breakdown structure (WBS) and cost breakdown structure (CBS), with the suggested safety parameters included for the case study project in focus. Then, a mathematical model was designed based on the parametric modeling approach and the related weighting factors were determined. The proposed model can be considered as an innovative approach to designing safety indicators in oil and gas projects. Field studies and interviews were conducted to investigate the validity of the variables based on the Delphi method. Finally, safety management costs for different phases of the project and related weighting factors were determined separately. The results indicate that the safety management's weighting factors are 1.1% of the total project's weighting factor.

Aviation Technology Life Cycle Management: Importance for Aviation Companies, Aerospace Industry Organizations and Relevant Stakeholders

<p align="LEFT">The paper in the introductory part underlines some aspects concerning the importance of Aviation Technology Life Cycle Management and informs on basic international standards for the processes and stages of life cycle. The second part is focused on definition and main objectives of system life cycle management. The authors subsequently inform on system life cycle stages (in general) and system life cycle processes according to ISO/IEC/IEEE 15288:2015 standard. Following the fact, that life cycle cost (LCC) is inseparable part and has direct connection to the life cycle management, the paper contains brief information regarding to LCC (cost categories, cost breakdown structure, cost estimation a.o.). Recently was issued the first part of Aviation Technology Life Cycle Management monograph (in Slovak: ”Manažment životného cyklu leteckej techniky I”), written by I.Koblen and S.Szabo. Following this fact and direct relation to the topic of article it is a part of article briefly introduced the content of two parts of this monograph (the 2nd part of monograph it has been prepared for the print). The last part of article is focused on issue concerning main assumptions and conditions for successful application of aviation technology life cycle management in aviation companies, aerospace industry organizations as well as from the relevant stakeholders side.</p>