Cost Breakdown Structure Research Articles

Risk-Managed Lifecycle Costing for Asphalt Road Construction and Maintenance Projects under Performance-Based Contracts

AbstractTo date, few contractors have been involved in performance-based contracts (PBCs) for road construction and maintenance projects where they have to use lifecycle cost (LCC). The main drawback for using the LCC approach is the LCC assumptions used to address projects under high risk for contractors such as PBCs where the contractors are more than likely to be responsible for both the construction and maintenance of the road for a certain warranty period. This research was conducted to enhance LCC assumptions by introducing a risk management tool. Hence, the LCC will be based on more accurate and probable assumptions, and accordingly the results of the LCC estimate will be more reliable in the future for such risky projects. The research adopted a five step methodology through (1) identification of the risks, (2) quantification of the hot mix asphalt (HMA) costs through a cost breakdown structure (CBS), (3) comparative LCC calculations, (4) Monte Carlo scenario analysis, and (5) a demonstrative case...

Cost analysis of continuous flight auger piles construction in Egypt

Continuous Flight Auger (CFA) piling is widely used in the Egyptian construction industry. There is a dramatic fluctuation in pricing of executing this work package within short periods as a result of unsteady changes in supply-demand equilibrium. Consequently, there is an urgent need for the use of a scientific approach in estimating construction costs. Accordingly, it is crucial to consider the different cost elements of CFA piling construction as a step to reach an accurate and realistic cost estimate to be used by contractors in tendering. This research aims to study these cost elements based on an expert judgment, site observations and statistical analysis in order to develop an effective tool to estimate the total construction cost of the CFA piles in any future project. Expert survey was performed to draw detailed information to construct a cost breakdown structure (CBS) that was used as a basis for developing the proposed cost model. The developed cost model is then validated through the application on fifty two projects. Such projects were carefully selected in different sizes, purposes and locations. Then the collected data were exposed to statistical analysis techniques. An average percentage error of 4.1% was observed upon comparing the estimated costs with the actual costs of these projects. A sensitivity analysis was then performed to recognize the most effective cost factors. The developed recommended model was used by some experienced contractors in the Egyptian market who expressed their satisfaction with the model.

A parametric whole life cost model for offshore wind farms

Life cycle cost (LCC) considerations are of increasing importance to offshore wind farm operators and their insurers to undertake long-term profitable investments and to make electricity generation more price-competitive. This paper presents a cost breakdown structure (CBS) and develops a whole life cost (WLC) analysis framework for offshore wind farms throughout their life span (∼25 years). A combined multivariate regression/neural network approach is developed to identify key cost drivers and evaluate all the costs associated with five phases of offshore wind projects, namely pre-development and consenting (P&C), production and acquisition (P&A), installation and commissioning (I&C), operation and maintenance (O&M) and decommissioning and disposal (D&D). Several critical factors such as geographical location and meteorological conditions, rated power and capacity factor of wind turbines, reliability of sub-systems and availability and accessibility of transportation means are taken into account in cost calculations. The O&M costs (including the cost of renewal and replacement, cost of lost production, cost of skilled maintenance labour and logistics cost) are assessed using the data available in failure databases (e.g. fault logs and O&M reports) and the data supplied by inspection agencies. A net present value (NPV) approach is used to quantify the current value of future cash flows, and then, a bottom-up estimate of the overall cost is obtained. The proposed model is tested on an offshore 500-MW baseline wind farm project, and the results are compared to experimental ones reported in the literature. Our results indicate that the capital cost of wind turbines and their installation costs account for the largest proportion of WLC, followed by the O&M costs. A sensitivity analysis is also conducted to identify those factors having the greatest impact on levelized cost of energy (LCOE). The installed capacity of a wind farm, distance from shore and fault detection capability of the condition monitoring system are identified as parameters with significant influence on LCOE. Since the service lifetime of a wind farm is relatively long, a small change in interest rate leads to a large variation in the project’s total cost. The presented models not only assist stakeholders in evaluating the performance of ongoing projects but also help the wind farm developers reduce their costs in the medium–long term.

THE APPLICATION OF VALUE ENGINEERING IN THE DESIGN OF CONSTRUCTION PROJECTS VENUS TOWER MASHHAD (IN IRAN) AS A CASE STUDY

Value engineering is one of the suitable ways to identify opportunities for improvement in the design and implementation of construction projects. This is possible by using value engineering techniques to form a systematic, creative professionals as a team and in a short time with a view to examine various aspects of the project and finally the capacity to improve the quality, reduce costs and decrease time to be recognized. In this paper, first by library studies, a list of construction project evaluation criteria was prepared. Then, through the study of documents and files related to the control Project (MSP) of Venus Tower in Mashhad (as a case study), criteria were collected. Then, CBS (cost breakdown structure) of the project is prepared with the aim of focusing on high costs and regard to the potentials for improvement and the cost of each package and percent distribution of costs were allocated to CBS. According to the percent distribution, value engineering; studies about the greatest potential cost-saving options that had been observed. Then the suggestions for meeting the needs of exploit were proposed by using the technique of brainstorming to generate ideas and approved or rejected options which were based on public reasoning. Finally, items set as the final outcome of the workshop taking into account the explanations provided for each proposal are presented to impose in designs. This paper presents the results of applied value engineering to reduce costs and increase efficiency during the lifetime of the project.

Cost and Scope Breakdown Structure for Functional Level Estimating of Consultant Fees

Estimating the cost of preconstruction services (PCSs) during the early phases of highway project development is an important task requiring an increased level of attention. Research has found a link between early investment in PC planning and design services and final project costs. The purpose of this paper is to assess current estimating practices and propose a cost and scope breakdown structure (CSBS) framework to structure functional level estimation of consultant fees. Such a framework is promoted to reduce the chance that underfunded PCSs may degrade postaward construction contract cost certainty. This study found that PCSs were generally viewed as a minor component of a project’s budget and were sometimes estimated without subsequent preconstruction cost control or accountability. Current practices for consultant fee estimating by state departments of transportation (DOTs) documented in this study show little standardization in estimating practices across and within transportation agencies. As a consequence, many individuals are creating their own tools to develop PCS cost estimates. The result is that national and regional consultants that work in more than a single state are forced to expend additional effort to maintain agency-specific work task databases; the cost no doubt is passed back to the agency in increased overhead costs. This study found that application of a CSBS to classify specific work tasks and utilization of a database of previous project cost information promote consistency and aid contract negotiations with consultants.

Co-digestion of algae biomass for production of biogas and fertilizer: Life Cycle Cost Analysis

The purpose of this article is to determine and assess<em> </em>Life Cycle Costs of biogas and fertilizer produced in anaerobic digestion of biomass. General Cost Breakdown Structure for anaerobic digestion plant is described for better understanding of the system. Main cost categories discussed in this study are: Investments; Design, construction and dismantling costs; Maintenance, Operation and Transportation costs. Results showed that Design, construction and dismantling costs have the biggest share in Total Life Cycle Cost (TLCC) per cubic meter of biogas. This category also has the biggest influence on TLCC of fertilizer. Investment costs are the second most significant cost category.

Estimation of aircraft component production cost using knowledge based engineering techniques

A comprehensive method is presented to estimate aircraft component production costs using Knowledge Based Engineering (KBE) techniques. A suite of parametrical cost estimation blocks are treated as Cost Primitives (CPs), which contain attributes such as cost types, cost driving parameters, and cost estimation relationships. A CP is associated with a parameterized geometry and a set of specific design parameters including part/assembly types, materials and production methods. Production cost is estimated by aggregating the cost of different CPs within a tree structure integrating both product breakdown and cost breakdown structures. The cost analysis tool is integrated into a KBE application by building Capability Modules (CMs), which provide manufacturable geometric representations for cost estimation and can be used to summarize output reports for further optimization. Case studies concerning stiffened panels are carried out, verifying the accuracy of the cost estimation method and illustrating the applicability of this method together with the integrated KBE application for various aircraft components. The main contribution of this research is automating the cost integration in the design process to improve the fidelity, repeatability and traceability of cost analysis.

Automation of Quantity Take-off for Modular Construction

Quantity takeoff, serving as a foundation for the downstream tasks in the construction management, is a repetitive work. However, this process in current practice involves massive manual interventions, which is extremely time consuming and highly error-prone. This is partially due to the fact that incorporating cost breakdown structure formulated according to industry companies’ classification system into BIM still remains a challenge. This study thus exploits a methodology which allows construction practitioners to obtain quantity takeoff in an automatic manner. The main concept is to pre-load the unique classification information into the BIM model such that the quantity of materials in a given BIM model can be extracted and stored into a database (Excel Sheet) automatically in according with the preloaded classification system. Besides this, the unique classification information, along with formulas for derivedquantities, is front-loaded into the Excel Sheet database. As a result, the explicitly extracted quantities are converted by the preloaded formulas to the required format for the purpose of ordering and purchasing. A prototype system is developed based on Autodesk Revit through Revit Application Programming Interface. A case study of a modularized house reveals that a considerable amount of time saving and accuracy increasing of project estimation are achieved as a result of achieving the quantity takeoff automation.

The Role of Cost Breakdown Structure in Life Cycle Cost Model

This paper highlights the basic process of developing a life cycle cost model and the role of cost breakdown structure for water distribution pipeline networks. A life cycle cost is the total cost of owning an asset during its predicted useful life, while a cost breakdown structure illustrates all the costs emerged in each single phase of the asset’s life cycle cost. Its purpose is to identify, define and organize all cost elements to be taken into account in a life cycle cost. Each cost element included in developing a cost breakdown structure will also be discussed in this paper.

Develop a cost model to evaluate the economic benefit of remanufacturing based on specific technique

Remanufacturing is a process of recovering used products to a like-new condition. It can potentially achieve considerable economic, environmental and social benefits in many applications. However, its economic benefit varies for different products and remanufacturing processes. This research aims to develop a framework and cost model to quantitatively evaluate the benefits of remanufacturing techniques to assist the decision making on end-of-life strategies. Additive manufacturing-based remanufacturing process has been modelled first, then cost breakdown structure for the process has been created, and the cost model has been developed. Validation of the cost model has been conducted based on expert judgement, and a case study has been carried out by using the developed cost model to compare the benefit of remanufacturing a specified component or making a new one.

Cost modelling to support optimised selection of End-of-Life options for automotive components

In automotive sector, the End-of-Life components, especially the uni-material components e.g. steel, plastics, etc., traditionally normally go to material recycling. This conventional disposing approach has nowadays moved towards the secondary utilization approach which closes the loop in the material flow process, i.e. reuse via remanufacturing, reconditioning, repairing, etc. However, the economic benefit of different End-of-Life options for automotive components remain unclear; there is a need to quantitatively evaluate the economic benefit of different End-of-Life options. This project aims to develop a cost estimation model to assess the cost-effectiveness between recovery alternatives for End-of-Life automotive components. Firstly, the remanufacturing process for automotive components has been modelled consisting different stages and activities involved. Thereafter, cost breakdown structure has been established, and the cost elements in each stage and the cost drivers for each cost element have been identified. Next, cost estimation relationships between cost elements and cost drivers have been established. Finally, a cost estimation model has been developed, validated and implemented in MS Excel@ platform. Two case studies comparing different End-of-Life options of crankshaft and composite oil pan by using the developed cost model has been performed; it has been shown that the developed cost model can inform which End-of-Life option is more cost-effective.

Life-cycle cost analysis of floating offshore wind farms

The purpose of this article is to put forward a methodology in order to evaluate the Cost Breakdown Structure (CBS) of a Floating Offshore Wind Farm (FOWF). In this paper CBS is evaluated linked to Life-Cycle Cost System (LCS) and taking into account each of the phases of the FOWF life cycle. In this sense, six phases will be defined: definition, design, manufacturing, installation, exploitation and dismantling. Each and every one of these costs can be subdivided into different sub-costs in order to obtain the key variables that run the life-cycle cost. In addition, three different floating platforms will be considered: semisubmersible, Tensioned Leg Platform (TLP) and spar. Several types of results will be analysed according to each type of floating platform considered: the percentage of the costs, the value of the cost of each phase of the life-cycle and the value of the total cost in each point of the coast. The results obtained allow us to become conscious of what the most important costs are and minimize them, which is one of the most important contributions nowadays. It will be useful to improve the competitiveness of floating wind farms in the future.

Life Cycle Cost Analysis of Ready Mix Concrete Plant

India, being a developing nation is experiencing major growth in its infrastructural sector. Concrete is the major component in construction. The requirement of good quality of concrete in large quantities can be fulfilled by ready mix concrete batching and mixing plants. The paper presents a technique of applying the value engineering tool life cycle cost analysis to a ready mix concrete plant. This will help an investor or an organization to take investment decisions regarding a ready mix concrete facility. No economic alternatives are compared in this study. A cost breakdown structure is prepared for the ready mix concrete plant. A market survey has been conducted to collect realistic costs for the ready mix concrete facility. The study establishes the cash flow for the ready mix concrete facility helpful in investment and capital generation related decisions. Transit mixers form an important component of the facility and are included in the calculations. A fleet size for transit mixers has been assumed for this purpose. The life cycle cost has been calculated for the system of the ready mix concrete plant and transit mixers.

경계조건 분석을 통한 LCCBS 연계방안

건축물의 생애주기비용은 시행과정 전 단계에서 상호 연관되어 비용이 발생하며 각 단계마다 서로 간에 영향력이 존재한다. 하지만 건축 프로젝트의 각 단계별 CBS가 서로 상이하여 합리적인 공사비를 산정하는데 문제점이 발생한다. 따라서 본 연구에서는 기존에 연구되었던 LCCBS를 바탕으로 건축 프로젝트 각 단계 간에 경계조건을 분석하였다. 또한 분석된 경계조건을 바탕으로 분절요인을 분석하고 이에 따른 연계방안을 모색하였다. 연계방안의 유효성 검증을 위해 실제 건축프로젝트를 바탕으로 사례적용을 실시하였다. 분석결과 누락되는 항목이 97.2%이상을 개선하였고 평균 6시간 빠르게 업무를 수행할 수 있음을 확인할 수 있었다. 향후, LCC 시스템에 적용함으로써 LCC의 효율적인 산정 및 LCC 절감을 계획할 수 있을 것으로 사료다. Costs and expenses are intertwined and incurred throughout an entire construction project, even from the pre-construction phase, and each phase has a different impact on the life cycle cost (LCC). However, the cost breakdown structure (CBS) is different in each phase of a building construction project, which makes it hard to reasonably calculate construction cost. For this reason, the boundary conditions were analyzed in this study based on the life cycle cost break structure (LCCBS). In addition, breakdown factors were analyzed based on the boundary conditions to derive a linkage method. The validity of the linkage method was verified through application to actual construction projects. Through the analysis, it was found that the problem of items being left out was reduced by more than 97.2 percent, and the work was done an average of 6 hours faster compared to the conventional method. It is expected that by applying the new LCC system, LCC will be both reduced and calculated in a more efficient manner.

Life Cycle Cost Breakdown Structure Development of Buildings through Delphi Analysis

With domestic construction projects becoming bigger, more specialized and more advanced, the construction industry is striving to improve quality and quantity, and is diversifying functions and shapes. Nevertheless, the process of a construction project causes problems when we estimate construction price, because the cost breakdown structures are different in each step. The primary aim of this study was to estimate building life cycle cost using the Delphi method. The cost breakdown structure for life cycle cost was classified into planning, design, construction, maintenance and waste disposal, and each detailed classification was determined by estimating life cycle cost. Moreover, the developed cost breakdown structure is verified by consulting with experts to secure objectivity and validity.

Cost Risk Assessment for Large Hydropower Project Based on the Probability Distribution

Probability distribution is adopted to evaluate the cost risk of large hydropower project. Risk factors are firstly identified through Work Breakdown Structure(WBS), Cost Breakdown Structure(CBS) and Risk Breakdown Structure(RBS), and then individual risk factor probability distribution is measured by method combined Monte Carlo simulation model and the controlled interval memory (CIM) model. By superimposing individual ones, probability distribution of cost under the influence of a number of risk factors is achieved, which provides effective information for investment decision and cost control.

Integration of Financial and Contract Management on the Shanghai Expo Construction Program

AbstractThe management of facility construction for hallmark events is critically important for their financial viability. However, little knowledge has been produced regarding the management of this type of construction. Based on the construction program for the Shanghai Expo 2010 and other cases reported in the literature, this paper provides an analysis of the common characteristics of construction for hallmark events, the challenges of financial management due to these characteristics, techniques to address these challenges, and lessons learned from the Expo construction. It is believed that one critical factor that contributes to the success of the Expo construction program is the integration of the financial management and contract management processes, assisted by a specifically designed computer program. The techniques used to integrate the two processes involve (1) mapping the program’s work breakdown structure, cost breakdown structure, and contract breakdown structure; (2) integrating the infor...

A North Atlantic Treaty Organisation framework for life cycle costing

There is a long and documented history of both cost growth and estimating optimism within military system acquisition programmes. This is particularly the case for multinational programmes. As the nature of future acquisition programmes will be more multinational oriented, a common approach is required to generate realistic and consistent LCC estimates for a future system. This article presents the findings to date of the NATO Research and Technology Organisation (RTO) to develop a framework for life cycle costing. This framework consists of a generic cost breakdown structure (CBS), methods and models to be used and a guideline for conducting a Life Cycle Cost (LCC) analysis in all stages of the system's life cycle. All this is summarised in a Code of Practice. The article concludes presenting the next step in the NATO cost improvement process, i.e. to exercise the guideline, for example, programmes. An independent cost estimate (ICE) is conducted on three systems to demonstrate proof of concept. The results of these ICEs will be further used to improve the guideline and the Code of Practice.

The Research of Comprehensive Evaluation Model for Thermal Power Equipment Based on Life Cycle Cost

To estimate the life cycle cost of thermal power equipments in engineering, this paper established a comprehensive evaluation model of life cycle cost with the life cycle breakdown and cost breakdown structure. Based on the model, this paper defined the cost elements of the thermal power equipment, analyzed influences of the thermal power equipment. Finally, the model is applied to an instance to estimate various cost categories in each life phase, which were summed up to the life cycle cost of the thermal power equipment.

Identifying Tools and Techniques for Managing Construction Project Delivery in Small and Medium Enterprises in South African Construction Industry

The purpose of this study was to assess the management tools and techniques that are used to manage time, cost and quality and determine if the management tools and techniques used were effective in managing time, cost and quality. Fifteen small and medium construction enterprises accepted to be interviewed after they were purposively sampled in Gauteng province in the city of Johannesburg, South Africa. This study reports the findings of in-depth structured interviews with directors and construction managers of the small and medium construction enterprises. The results were analysed using content analysis and the findings reveal that the management tools and techniques used to manage time were bar charts or networks; in managing cost, cash flow and cost breakdown structure or bill of quantity, and in managing quality, inspection of work and specifications. The respondents agreed that in using these management tools and techniques they were able to effectively manage their projects and attained the targets set.