Project Budget Research Articles

Identification and analysing of risk factors affecting cost of construction projects

Saving money is critical for the owner, contractor, and subcontractor involved in a project Delays and failure to complete work within the given budget are the main reasons for construction project conflicts. Owners, contractors, surroundings, and other factors can cause unexpected cost increases in building projects, and numerous sorts of risk factors might exist at the same time. Cost overruns have an impact not only on the building industry, but it also have its impact on overall economy. Despite the fact that the study focused on building project cost increases, it also evaluated additional value to the Indian construction sector, as well as risk strategy and plan analysis. This article conducts research to identify and analyse significant risk factors that have an impact on the construction industry's budget in India. 42 common risk variables are discovered and grouped into four groups after a thorough study of related literature. In order to acquire the necessary data, the study is further directed by a questionnaire survey of professionals and practitioners of construction projects in India. The findings reveal high index of risk factors influencing construction project cost overruns. The top-ranked risk factors that have the greatest impact on the project's budget are price fluctuations, quality control, and management experience.

Календарное планирование инвестиционных проектов в условиях ограниченности ресурсов и неопределённости

Investment project scheduling problem is an important problem in the field of production management. Determining the optimal start time for activity allows ensuring a higher level of project's profit. The article considers an investment project that involves the implementation of a given number of activities for a certain period of time. Each of the activities is characterized by the duration of its implementation, the cost of resources and the income that it provides. In addition, the technological and organizational relationships between the activities are known. This, in particular, can be expressed in the need to complete one activity before doing another. The sources of project financing are the organization's own funds, as well as income received when performing activities. The article considers a situation when all project resources can be presented in monetary form. The project budget is assumed to be known in advance. The planning of the budget, as well as income and expenses for the project, is carried out by years. The net present value (NPV) was used to evaluate the results of the project implementation. This indicator represents the value of the profit from all planned activities, discounted to the time the investment started. Thus, the investment project scheduling problem that we are considering is to find the optimal start time for each of the activities, at which the restrictions on the sufficiency of funds, the interconnection of activities are met and the maximum NPV is ensured. In the proposed statement of the resource-constrained project scheduling problem, the only parameters expressing the uncertainty of the conditions for the implementation of the project are the components of the payment flow. We considered a situation in which the timing of the project and individual activities, as well as the company's own funds, are not subject to fluctuations. Random project parameters were considered independent. The article presents an overview of approaches to project risk assessment for different ways of taking into account the uncertainty factor. In particular, options for scenario analysis, outcome tree construction and simulation were considered. Using the genetic algorithm developed by the authors, a series of computational experiments was carried out. The analysis was carried out for cases of discrete and continuous distribution of project parameters. Based on the results of the experiments, schedules were found that are optimal for various values of random project parameters. For each schedule, the risk of stopping the project due to lack of funds was determined. The found schedules were compared by average NPV values, as well as by risk level. Conclusions were drawn about the choice of schedule, taking into account the cost of raising borrowed funds.

Tools for flexible project management methodology in the construction industry

This article is devoted to the consideration of Agile management tools and the possibility of their application in the construction industry. The subject of the study is the toolkit of flexible project management methodology. The object of the study is the enterprises of the construction industry. The author examines in detail such aspects as scrum and lean tools in a flexible methodology, identifies the advantages and disadvantages of a flexible methodology in relation to the traditional one, the possibility of using a management decision system in the construction industry. Particular attention is paid to the formulation of problems relevant to construction, which are the postponement of completion dates and changes in the project budget, the external and internal causes of their occurrence are considered, the possibilities of solving with the help of flexible methodology tools are determined. A special contribution of the author to the study of the topic is the determination that construction is currently an industry for which the most characteristic is the cascade project management technique. In the course of the research, the concepts of flexible project management for the construction industry were studied and generalized. Following the induction method, the author came to conclusions about the inexpediency of using a standard flexible methodology for managing construction and investment projects. As a result of the research, it was possible to make a logical study of the collected facts and to make a judgment about the need to switch from the cascade methodology to a new one. Examining the flexible project management tools provided in the course of the study, conclusions were drawn about the conclusion of a new hybrid project management methodology.

Research on the Characteristics of Performance Indicators of Government Department Budget Projects: Taking Sichuan Provincial Education Department as an Example

The performance of government departments is the best embodiment of the government's work results, and the performance of budget projects is one of the important aspects. It is an important management mode of current government departments to use performance indicators to conduct performance management and evaluation of budget projects. This paper collects the performance indicators of budget projects disclosed by the Sichuan Provincial Education Department in the disclosure of department final accounts from 2019 to 2021, and takes it as an example to research the advantages and disadvantages of performance indicators setting, and finally puts forward suggestions for improvement. The conclusions will be helpful to improve the performance management level of government departments.

Online Open Budget: The Effects of Budget Transparency on Budget Efficiency

The government budget should be operated efficiently and democratically to promote economic development and social welfare. This article investigates the claim that budget transparency can improve budget efficiency. Based on the 2017 introduction of the online open budget system in South Korea as an example, the difference-in-difference examination reveals that budget transparency reduces the size of the unused budget, an indicator of budget inefficiency. A battery of robustness tests supports this result. Moreover, improving budget efficiency has a more significant effect when budget projects are at the risk of agency problems. Our findings suggest that budget transparency through the online open budget system can enhance budget efficiency by encouraging the public's participation and alleviating the principal-agent problem.

Integrated scheduling of the procurement system: System dynamics modeling

Inaccurate estimates of demand for goods from (Institut Technologi Sepuluh Nopember) ITS cause the absorption rate for procurement of goods to remain low. Planning logistics procurement and budget projections are critical. The planning process will be more efficient with an integrated system. This study aims to develop a conceptual model of a system dynamics to improve the procurement system’s effectiveness and efficiency. Scenario results show that managing the relationship between the 25 variables can decrease stock by 50% and annual expenditure can be reduced by 10% so that ITS can implement a safety stock system policy and purchase goods on time.

Blockchain-Based Software Effort Estimation: An Empirical Study

Context: The success or failure of any software development project significantly depends on the accuracy of its effort estimates. Software development effort estimation is the foundation for project bidding, budgeting, planning, and cost control. Problem: The literature shows that a lot of work has been done on software effort estimation. But still, there is a need for improvement in effort estimation by introducing new methodologies. The structured group-based and analogy-based effort estimations are the widely used estimation methods. Nevertheless, there are several shortcomings of using these methods such as lack of experts, lack of historical data, and biasness in expert opinion, which negatively affect the estimation results. Motivation: With the advancement of technologies, such limitations could be overcome. Such as leveraging the applicability of blockchain in several domains such as improvement in software development process and network security. Method: In this article, we have proposed a Blockchain-Based Software Effort Estimation (BBSEE) methodology to improve the software effort estimation. We employ the proposed method using Web and blockchain technologies. Moreover, we also proposed an evaluation criteria to assess the efficacy of the proposed method in terms of Mean Magnitude of Relative Error (MMRE), Mean Absolute Error (MAE), and percentage of successful predictions falling (PRED (25)). Result: We performed several case studies and analyses expert opinion of 52 organizations to present the efficacy of the proposed method. Conclusion: We observe that BBSEE method outperforms than expert judgment and analogy-based effort estimation methodologies in terms of software effort estimation.

Overview of Emerging Technologies for Improving the Performance of Heavy-Duty Construction Machines

Construction equipment is one of the most significant resources in every large construction project, accounting for a considerable portion of the project budget. Improving heavy machinery performance can increase efficiency and reduce costs. However, research on boosting machine efficiency is limited. This study adopts mix review methodology (systematic review and bibliometric analysis) and evaluates emerging technologies like Digital twin, Cyber physical systems, Geo-graphic information systems, Global navigation satellite system, Onboard instrumentation system, Radio frequency identification, Internet of things, Telematics, Machine learning, Deep learning, and Computer vision for machine productivity and provides insights into how they can be used to improve the performance of construction equipment. The article defined three major equipment operating areas—monitoring and control, tracking and navigation, and data-driven performance optimization—classified technologies respectively, and explored how they can increase machine productivity. Other circumstantial issues affecting machine operation as well as loopholes in existing innovative tools used in machine processes were also highlighted. This study contributes to the goals of deploying digital tools and outlines future directions for the development of automated machines to optimize project efficiency.

Problems and Solutions of Construction Budget Overruns in China's Engineering Projects

The rapid development of the construction industry has driven the construction of engineering projects in China. However, there are currently many construction projects with budget overruns, resulting in reduced economic benefits of the project. Therefore, this paper elaborates the importance of construction budget of engineering projects, and then proposes the reasons for construction budget overrun of engineering projects: imperfect construction budget plan, lack of supervision in the implementation of construction budget plan, insufficient level of cost management personnel, and construction materials affected by the supply market. Finally, we propose measures to solve the budget overrun of engineering project construction: improve the project construction budget plan, strengthen the supervision of the implementation of the project budget plan, improve the professional skills of budget staff, and stabilize the supply price of construction materials.

EVALUATION OF BUDGETING METHODS FOR MAINTENANCE OF HERITAGE BUILDINGS

Heritage buildings have evolved into development catalysts that, when properly maintained, can improve their surrounding area’s liveability while sustaining productivity in an ever-changing global context. Unfortunately, the high uncertainty involved in preserving heritage buildings frequently leads to over-budget projects. This article evaluates the factors that contribute to projects being over budget and the methods used to develop project budgets. History-based budgeting methods, value-oriented budgeting methods, analytical budgeting methods, and budgeting by condition description are frequently used, while new artificial intelligence models are also emerging. In addition, the review considers the Monte Carlo method and compares it with artificial intelligence models. Considering the high uncertainty involved when maintaining heritage buildings, it is concluded that the Monte Carlo method could be a very effective tool. For this reason, it is recommended that its use be tested on heritage building projects. Keywords heritage buildings; budget; maintenance; conservation projects; Monte Carlo simulation

Using new tools for building construction teaching during the sanitary emergency

Covid-19 pandemic has originated that a great number of countries’ governments demand universities to teach online classes, presenting a challenge to redesign the courses that had construction site visits included in the curricula. The purpose of this work is to present the successful strategies employed on the teaching of building construction, applied in a third-year civil engineering program of the Pontifical Catholic University of Peru. The methodology was designed so that one can adapt the pandemic and post-pandemic stages proposing a balanced use of virtual platforms and software for video conferences and laboratories, incorporating tools like Building Information Modeling, Lean construction, among other systems. Given the sanitary emergency, the construction site visits were replaced by virtual visits to construction projects generated with scanner laser technology, photogrammetry, and BIM, generating digital twins that were stored in online platforms. Students toured the construction project virtually and in an interactive manner, and along with the description of the professionals in charge of the project they were able to reach a good level of comprehension of the organization and the construction processes. In addition, students developed the layout plans of the temporary works with BIM models. On the other hand, the course taught to generate and analyze the unit prices and quantity surveying of activities using the BIM methodology with 5D software, developing the project budget. The success of this methodology is shown through the notable quality of papers and evaluations taken, through the results of surveys taken on students--which had an effectiveness rate of 96.4 % --, and on the improvement opportunities determined. This paper presents tools relevant that may be adapted by the academia and practitioners related to building constructions, for virtual or face-to-face learning.

Strategy Analysis for project portfolio evaluation in a technology consulting company by the hybrid method THOR

Regarding the scope of project portfolio management, the correct prioritization of actions leads to the achievement of the organizational strategic objectives. Based on the strategic planning of a technology consulting company, the paper presents an alternative model for project prioritization from the moment that the project selection decision is a vital process in technological associations in two ways. First, the software development project budget requires a large investment and must be in alignment with the strategic objectives of the company. Second, the multidimensionality of organizational returns on projects is naturally risky in terms of the expected outcome. This study considers the project analysis based on a multicriteria approach by the THOR method, providing to make a transparent evaluation, highlighting the most important variables concerning the problem, and making the identification of the most favorable solution.

Transmission Engineering Cost Prediction Based on Data Mining

Transmission engineering is an important part of electric power infrastructure engineering, accurate cost prediction can effectively control the project budget and promote the fine management of electric power enterprises. However, the influence factors of transmission engineering cost are complex, and the traditional prediction method cannot meet the requirements of network refinement development. In this paper, the importance of random forest features is used to extract the key influencing factors, and the grid search method is used to select the optimal random forest parameters and train the random forest model. Finally, the random forest model is tested by actual engineering data and compared with the prediction results of the supporting vector machine model. The results show that the relative error of the stochastic forest model is low, which provides a certain reference value for the cost budget of transmission engineering.

Authorities' Fiscal Forecasts in Latin America: Are They Optimistic?

Do governments in Latin America tend to be optimistic when preparing budgetary projections? We address this question by constructing a novel dataset of the authorities' fiscal forecasts in six Latin American economies using data from annual budget documents over the period 2000-2018. In turn, we compare such forecasts with the outturns reported in the corresponding budget documents of the following years to understand the evolution of fiscal forecast errors. Our findings suggest that: (i) for most countries, there is no general optimistic bias in the forecasts for the fiscal balance-to-GDP ratio (though there may be for the components); (ii) fiscal forecasts have improved for some countries over time, albeit they have worsened for others; (iii) in terms of drivers, we show that forecast errors for the fiscal balance-to-GDP ratio are positively correlated with GDP growth and terms of trade changes and negatively with GDP deflator surprises; (iv) forecast errors for public debt-to-GDP ratios are negatively associated with surprises to GDP growth; (v) lastly, budget balance rules seem to help contain the size of the fiscal forecast errors.

Transport accessibility as institutional barriers of territory budgeting

In the context of interest of state policy in expanding the ways of interplay between the state authorities and citi-zens the study and analysis of the initiative budgeting (IB) mechanisms, tools in the administrative territorial units of the Russian Federation and the evaluation of their effectiveness has become one of the most actual questions from the standpoint of involving citizens in local self-government. Often, the implementation of IB programs is based on the achievement of previously planned results (the so-called "disbursement of funds within the framework of national projects", how it happens in the implementation of the national project "Safe and high-quality roads" ), and does not correspond to the very essence of initiative budgeting because it does not take into account the degree of citizens’ activity in decision-making, and it does not assess the institutional barriers (such as transport remoteness of the population from the economic centers of the region) that prevent citizens from engaging in the process of determining directions of public finance expenditures. At the same time the quantitative values of the results is not often so significant since their rapid achievement especially in the first years of the implementation of budget pro-jects occurs with ignoring of such the key issue of IB as whose interests IB is implemented in and why IB programs proposed by the state are not accepted by the population. This research involves studying the behavioral reactions of such main beneficiaries of IB projects as population of municipalities on the Trans-Baikal Territory, identifying institutional barriers to the introduction of IB, determining the role of state and civil society in the development and implementation of IB projects.

Improving Green Building Project Management Processes through the Lean Approach

Question: Using a Lean approach to classify issues, or wastes, experienced during the different design processes, what sustainability-related activities affect the project design development stage. Purpose: The objective of this paper is to create a new lean-based approach to analyze the design process and quantify the negative effect of detected project-management issues on the project’s main resources, categorized through three different variables: costs, time and sustainability. Research Method: The research makes full use of a Lean approach intended as a standardized method to identify project wastes, classify the issues experienced during the different design processes and ultimately propose possible solutions for process optimization. The Lean approach was used as the basis to study four case studies wherein real projects were developed in different European countries under the LEED and BREEAM reference standards. The projects were analyzed against a set of guidelines developed by the Researchers with the aim of avoiding the replication of such issues in future projects. The analysis took into consideration all sustainability-related activities that affected the project design development. Findings: By identifying and estimating the effects of each issue on the project variables, researchers could rank their negative impact on the project budget, schedule and level of sustainability. The ranking allowed isolating which issues, or categories of issues, had the worst impact on the overall project from both qualitative and quantitative points of view. These research goals were achieved through the implementation of the Lean method and philosophy. Limitations: Among the main challenges related to time-variance analysis. Estimating the delay of single activities impact was sometimes difficult and ambiguous because it relied on other activities for which dependency could not be calculated. Limitations related to cost-variance analysis involved indirect costs that were difficult to estimate because they were neither related to any written document nor any formal activity or event of the project. The present research takes into consideration only four case-study projects and therefore the related conclusions cannot be generalized for all building projects. Implications: Applying the ranking of the issues identifies to a real project development with limited resources, it would be possible to highlight which problems should be addressed first in order to avoid, or at least limit, their negative impact on the project establishing a set of guidelines for future projects. Value for authors: This study sets the basis for several other research studies in relationship with green-building developments and lean approach. Keywords: Lean Construction, Lean Thinking, Design, Green-Building; Development, Sustainability; Project Management; Waste Paper type: Full paper.

Vyaapaar – B2B Outsourcing Platform

Abstract: The project is a responsive Web application that will allow businesses from a variety of industries to register, upload, and bid on projects. Businesses on this platform will provide their project requirements and budget, and other businesses in that domain will be able to bid on their quote and provide their business profile. The project owner can then award their project to the company that best meets their budget and requirements. The primary goal of this project is to provide opportunities for businesses to assist one another during these difficult times due to the COVID-19 Pandemic. This project provides registered businesses with a platform to outsource their projects at a reasonable cost with no or minimal workforce, and businesses that are out of business or trying to survive economically will be able to get enough business to sustain themselves by bidding and proposing to projects available on the Vyaapaar application's platform. Keywords: outsourcing, business-to-business, web application, mobile application

Study of economic viability and energy availability of hybrid solar / wind power and cooling systems with thermal energy storage

A large portion of the energy consumed worldwide is used for heating and cooling environments. In Brazil, the use of solar energy in homes experiences an increasing, despite the fact that not always an exclusively solar system can meet the entire energy demand, since climatic conditions significantly influence energy generation and its energy efficiency. Therefore, it is recommended to have alternatives to guarantee energy needs at consumption points throughout the year. In this context, with the intention of deepening the issues involving the complexity contained in the understanding and quantification concerning energy and budget of projects of refrigeration systems built – or to be built – based on the use of hybrid energy, the present work aims the dimensioning of an online simulator to assist the development of projects for installations of photovoltaic and wind systems in homes, businesses and industries. In addition, the study aims to deliver differentiated and personalized projects, combining good efficiency and lower operating costs. This simulator (website / application) uses API (Application Programming Interface), integrating Python programmed scripts to the platform branches, in order to offer, in a single Web platform, the complete simulation of the project of solar panels and wind turbines, budget, indications suppliers, service providers and estimated power output. Input data are: geographical position (altitude and longitude), available area (m2), roof material (ceramic, polycarbonate, glass, etc.), building height (m), historical data on solar and wind incidence (collected from INMET and INPE sites, respectively) and monthly average of the last years of power consumed (kWh). Output data are: estimation of the power produced by the system and economic analysis, number of panels and wind turbines needed to produce the necessary power, focusing on storage via TES (Thermal Energy Storage), as well as the impact of the study on economic and energy analysis of the system.

Rethinking Value Management (VM) Integration Within the Strategic Phase of Construction Project Value Chain

This is an attempt of rethinking Value Management (VM) integration within the strategic phase of the Malaysian public construction project value chain. Currently, such strategic VM integration is not evidenced by any value study. The earliest existing VM study intervention, namely Value Assessment (VA), only takes place after the Government approves the project budget. The budget approval activity demarcates that the project has reached the ‘decision to construct’ point at the end of the strategic phase. This indicates a vacuum of VM integration within the strategic phase of the project value chain. This conceptual study is conducted through retrieving literature review and obtaining consultation from VM experts in the public sector. First, the study has verified the vacuum of VM integration within the strategic phase of the Malaysian public construction project value chain. Secondly, in responding to the vacuum, this study identifies the opportunity of integrating VM within the strategic phase. Ultimately, two (2) opportune VM study interventions within the strategic phase are determined. This finding describes the value studies’ characteristics in terms of the study timings, main study objectives and the issues addressed by the respective VM study interventions.

Cost Contingency Estimation in Public Projects in the Construction Digitalisation Era: A Case of Vietnam

Construction projects, in nature, are complex and dynamic, therefore, when estimating the project budget, there should be a budget set aside, called “contingency” for dealing with changes in the project internally and externally. This paper, used a case study of a public hospital in Vietnam, discussed the estimation of cost contingencies in the preliminary feasibility study and feasibility study stages. Cost contingencies estimation using the construction investment rates have low accuracy, therefore, have been adjusted and re-allocated through out the stages. Additional data is needed for improving the accuracy of the contingency estimation. This approach is facilitated in the construction digitalisation era, especially with the issuance of Circular 12/2019/TT-BXD guiding the development and management of the systems of databases on cost norms, prices and price indexes. Historical data can increase the accuracy of the estimation of costs for construction consultancy services, including BIM services, which are currently estimated by predefined rates based on construction and equipment costs.