Stochastic analysis : risk prediction in contingency percentage for pre-tender cost estimation and forecasting for Hong Kong residential and office projects

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Stochastic analysis : risk prediction in contingency percentage for pre-tender cost estimation and forecasting for Hong Kong residential and office projects

 

Author: Chow, Chick-choi
Title: Stochastic analysis : risk prediction in contingency percentage for pre-tender cost estimation and forecasting for Hong Kong residential and office projects
Degree: M.Sc.
Year: 2002
Subject: Hong Kong Polytechnic University -- Dissertations
Risk assessment -- Statistical methods
Building -- Estimates
Department: Multi-disciplinary Studies
Dept. of Building and Real Estate
Pages: xiii, 178 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1637854
URI: http://theses.lib.polyu.edu.hk/handle/200/245
Abstract: Range estimate with stochastic analysis is considered as the more appropriate method than single value estimate for the contingency amount in construction cost. Some systematic approach like the Estimating Using Risk Analysis Method still has the disadvantage that the users are unconscious that the accuracy requirement by using the method in estimating the components (Mak and Picker 1999) would affect the output of the method. Final Account of past similar jobs are considered as the least cost and effort document for providing data for the forecast including estimating of contingency sum. In Hong Kong private developments such as residential and office types are not completely designed before contact is awarded due to quick start and completion requirements of the project. The foreseeable and un-design elements are mostly allowed as provisional items, amounts or quantities in the contract and subject to final adjustment at the final account stage. These items should be taken into account in their over or under allowed status in deciding the final contingency sum, which is in term of percentage to base estimate in this dissertation paper. The objective analysis from past similar projects' final accounts and the subjective judgment from respondents to questionnaires indicate that provisional items are mostly over-allowed in the contract. Though the extents of their over or under allowed are reduced by the increase amounts due to other instructed variations and/or claims elements, the final increase in contract sum if all these are considered would still contribute to a additional contingency sum but to a less extent than what have been considered if only fix percentage method is used. The stochastic analysis makes use simulation program to determine the final contingency percentage used to determine the respective sum, based on the probability or confidence level to which the decision maker would choose such that the final allowance would not be exceeded. The following are the findings in respects of analyses in this dissertation paper: a) Provisional items are in average over-allowed while variations and claims are in average net additional amount in the final contract sum. b) Estimator or assessors would like to use no different contingency percentage for the ascertainment of the contingency sum. c) The estimator or assessor does not consider the extent of provisional items allowed in contract when they determine contingency sum/percentage.

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