A computer model that forecasts the cash flow of building projects at the tender stage using stage payments

Anthony Blyth, Karl (2002) A computer model that forecasts the cash flow of building projects at the tender stage using stage payments. PhD thesis, University of Liverpool.

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Abstract

Cash flow forecasting is an indispensable tool for construction companies and is essential for the survival of any contractor at all stages of the work. Cash flow forecasting at the tendering stage needs to be simple and fast, considering the short time available and the associated cost. The thesis describes the methodology for the development of a computer model that forecasts the cash flow of construction projects at the tender stage, based on minimal project information, using both traditional and user defined stage payment approaches. A review of existing construction planning and duration prediction models, along with cost control and cost prediction models are presented. The various benefits, limitations, applications and requirements of such models etc. are highlighted. Specific attention is paid to the relationship between cost and duration and a review of time-cost models is also presented. A detailed review of the Latham reports, stage payments, the New Engineering Contract, the Egan reports, standardisation, concurrent construction, cash flow forecasting and S-curves, are also presented. The programme data of a total of fifty-six buildings were collected from a cross section of the construction industry with an accompanying set of twenty-one pre-determined project characteristics that defined each building. The research involved constructing a standardised works programme for fifty of the buildings. This contributes to the framework of a computer model that uses the most influential project characteristics to predict the costs, durations and time lags of between twenty (minimum) and thirty-nine (maximum) pre-determined activities in a schedule with a set sequence and dependencies. This schedule is used in the final model that is able to forecast cash flow. Standard cost curves (S-curves) were predicted and calculated in order to evaluate how the accuracy of the model compared with actual results. Three tests were then conducted in order to determine the accuracy of the fits of the necessary S-curve models. These included testing the accuracy of actual and predicted individual fits and individual against average fits, with the premise that a standard curve can be used for certain established groupings. Multiple linear regression analysis shows that the cost, duration and time lag of all of the activities for all of the projects can be predicted with an accuracy of at least 85% when compared to the actual. The results of a questionnaire that attempted to learn more about stage payments and the Latham recommendations in general and to what the industry thinks of such a payment approach is also presented. A set of six projects not used in the development of the models was used to test and validate every aspect of the research. It was concluded that the results were more accurate than existing models.

Item Type:	Thesis (PhD)
Depositing User:	Symplectic Admin
Date Deposited:	23 Oct 2023 09:56
Last Modified:	23 Oct 2023 10:09
DOI:	10.17638/03175793
Copyright Statement:	Copyright © and Moral Rights for this thesis and any accompanying data (where applicable) are retained by the author and/or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge.
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3175793