Time–cost tradeoff analysis considering funding variability and time uncertainty

Purpose Planning for increased contractor profits should start at the time the contract is signed because low profits and lack of profitability are the primary causes of contractor failure. The purpose of this paper is to propose an integrated profit maximization model (IPMM) that aims for maximum expected profit by using time-cost tradeoff analysis, adjusted start times of activities, minimized financing cost and minimized extension of work schedule beyond the contract duration. This kind of integrated approach was never researched in the past. Design/methodology/approach IPMM is programmed into an automated system using MATLAB 2016a. It generates an optimal work schedule that leads to maximum profit by means of time-cost tradeoff analysis considering different activity acceleration/deceleration methods and adjusting the start/finish times of activities. While doing so, IPMM minimizes the contractor’s financing cost by considering combinations of different financing alternatives such as short-term loans, long-term loans and lines of credit. IPMM also considers the impact of extending the project duration on project profit. Findings IPMM is tested for different project durations, for the optimality of the solutions, differing activity start/finish times and project financing alternatives. In all cases, contractors can achieve maximum profit by using IPMM. Research limitations/implications IPMM considers a deterministic project schedule, whereas stochastic time-cost tradeoff analysis can improve its performance. Resource allocation and resource leveling are not considered in IPMM, but can be incorporated into the model in future research. Finally, the long computational time is a challenge that needs to be overcome in future research. Practical implications IPMM is likely to increase profits and improve the chances of contractors to survive and grow compared to their competitors. The practical value of IPMM is that any contractor can and should use IPMM since all the data required to run IPMM is available to the contractor at the time the contract is signed. The contractor who provides information about network logic, schedule data, cost data, contractual terms, and available financing alternatives and their APRs can use an automated IPMM that adjusts activity start times and durations, minimizes financing cost, eliminates or minimizes time extensions, minimizes total cost and maximizes expected profit. Originality/value Unlike any prior study that looks into contractors’ profits by considering the impact of only one or two factors at a time, this study presents an IPMM that considers all major factors that affect profits, namely, time-cost tradeoff analysis, adjusted start times of activities, minimized financing cost and minimized extension of work schedule beyond the contract duration.

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Multi-objective optimization of time-cost-quality in construction projects using genetic algorithm

10.7764/rdlc.19.3.335-346 ◽

2020 ◽

Vol 19 (3) ◽

pp. 335-346

Author(s):

Cemil Akcay ◽

◽

Setenay Işikyildiz ◽

Keyword(s):

Genetic Algorithm ◽

Construction Projects ◽

Three Dimensional ◽

Two Dimensional ◽

Time Cost ◽

Multi Objective Optimization ◽

Quality Optimization ◽

Tradeoff Analysis ◽

Single Solution ◽

Genetic Algorithm Method

In this study, it was aimed to develop a model that provides Time-Cost-Quality optimization in construction projects using Genetic algorithm method. In order to fulfill that, Matlab codes for a multi-purpose genetic algorithm that performs Time-Cost-Quality optimization were developed and applied to the problem, and the targeted success level was substantially achieved. This model is capable of performing and visualizing an advanced three-dimensional time, cost, quality tradeoff analysis instead of the traditional two-dimensional time-cost tradeoff analysis. It was possible to select the desired alternative under the project conditions obtaining pareto images called a set of solutions rather than a single solution. In addition, one of the main objectives of this study is to develop an effective model to assist the main contractors of the construction in selecting the most suitable subcontractors.

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