scholarly journals Difference in S-Curve for Different Types of Construction Projects

Author(s):  
Ehab Soliman ◽  
◽  
Khaled Alrasheed ◽  

Project cash flow and contractor S-curve are tools that can be used to measure, control and anticipate project progress. Few studies dedicated to evaluate and judge the behaviour of the original S-curve. This study aims to evaluate the similarities and changes of construction projects S curves between different project types. More than 40 S-curves were collected from the state of Kuwait for different types of construction projects. The list of collected curves divided into six groups based on the type of client, no of buildings and number of floors. Statistical analysis used to compare the curves inside each group of projects. Statistical analysis using test of normality, T-paired test then Standard Euclidean Distance were applied to evaluate the similarity and changes between groups. This study revealed that there is a level of similarity of S-curves for high rise buildings and there is no similarity of S-curves for one or multi-building projects. The maximum gap between S-curves for one and high rise building laying in the middle part of project duration, while the maximum gap between S-curves for multi-building project laying in 70% to 80% of project duration. This study revealed that the variance of S-curve behaviour indicating there is no common attitude for all types of construction project types. This study can help construction stakeholders to anticipate their expected expenses and help in project cash flow management.

2018 ◽  
Vol 3 (1) ◽  
pp. 69
Author(s):  
Moustafa Kotb ◽  
Mohamed Abdel Razik Ibrahim ◽  
Yousef Saleh Al-Olayan

Cash flow is considered to be the main acceleration’s factor of any construction contract, which has a large and direct impact on projects completion dates as well as the project contractual duration. This is very evident when examining how the owners benefit from their projects in achieving or forfeiting the desired economic feasibility determined in the feasibility study of any project.It is noted that the cash flow plan is issued through a Critical Path Method (CPM) for a project which entails only an estimate of the monetary value of the construction work to be carried out on site and on a rough and approximate basis using the cash flow’s curve (S-CURVE), which is usually gives a different value from the actual work performed onsite.The impact of this problem on financial management for any project is as follows:In the case of underestimation, if the available estimates are less than the required cash flow, it is considered as a major cause for delay in project completion as well as the inability of the owner to achieve the economic feasibility Internal Rate of Return (IRR) required for the project. Also, this leads to monitory error due to the financial compensations due to the contractor as a result of the damage caused by time extensions due to the holdings of the cash entitlements.In the case of overestimation of the value of the required cash flow with a high margin of error, this leads to the monetary waste of amounts that could have been invested in other ventures, projects or opportunities.This paper provides a summary of the importance of determining the appropriate amount of cash flows required to be provided by the owner’s financial management, which leads to achieving the appropriate projects financial management gains and thus reducing financial losses or disputes in construction projects in the State of Kuwait.


2017 ◽  
Vol 23 (8) ◽  
pp. 1045-1059 ◽  
Author(s):  
Mostafa KHANZADI ◽  
Ehsan ESHTEHARDIAN ◽  
Mahdiyar MOKHLESPOUR ESFAHANI

Cash-flow management is very important for contractors given that inadequate cash resources typically are the main causes for bankruptcy of construction companies. In comparison to most other industries, the construction industry is severely plagued by risk, and the success of construction projects usually depends on valuating all risks. However, conventional methods suggested by extant research on cash flow forecasting do not consider comprehensive identifica­tion of risk factors, interactions between the factors, and simultaneous occurrences of the factors. This study introduced a simple and appropriate probabilistic cash flow forecasting model using Bayesian Belief Networks (BBNs) to avoid bankruptcy of contractors by considering influence diagrams and risk factors that affect a project. Workability and reli­ability of the proposed approach was tested on an important building construction project in Iran as a real case study, and the results indicated that the model performed well.


2009 ◽  
Vol 12 (18) ◽  
pp. 46-51
Author(s):  
Long Duc Luong

This paper presents an optimal method for scheduling construction projects including many repetitive activities in many similar units (e.g., high-rise bridges...). The objective of scheduling is to minimize the project duration. This method considers many types of activities with different characteristics (activities must be performed continuously to insure the continuity in their performances, or activities can allow interruptions in their performances) to generate a satisfactory schedule for project managers. This method uses a new scheduling algorithm to find the optimal start and finish times of activities, so that the project duration is minimized. A well-known example is used as an illustration to show advantages of this method to other methods.


2014 ◽  
Vol 21 (2) ◽  
pp. 170-189 ◽  
Author(s):  
Tarek Zayed ◽  
Yaqiong Liu

Purpose – Construction projects are well known for their complexity and ambiguity. These projects carry out higher risk than traditional ones because they entail high capital outlays and intricate site conditions. Poor financial management of these projects may lead to bankruptcy; therefore, effective cash flow management is essential. Although the peculiar characteristics of construction projects, the accuracy of cash flow forecasting has been a long lasting problem. The paper aims to discuss these issues. Design/methodology/approach – Many unforeseen factors affect the cash flow forecasting of construction projects. Therefore, the objective of the presented research in this paper is to examine the impact of these factors on contractor's cash flow. A model has been established by integrating analytic hierarchy process and simulation to examine the impact of various factors on cash flow. Data on the selected factors have been collected through questionnaires from various agencies in North America and China. Findings – Results show that the most significant factors are: change of progress payment, payment duration, financial position of the contractor, project delays, and poor planning. It also shows that the effect of cash inflow factors varied approximately from 9.7 to 16.3 percent with a mean value of 12.4 percent. Research limitations/implications – The implementation of the developed models are limited to few case study projects in testing the models. However, the developed models and framework are sound for future improvement. They are considered as a major step toward a broader cash flow planning. Practical implications – The developed methodology and models play essential roles in decision-making process. Originality/value – The developed model is expected to help contractors realistically forecast project cash flow under uncertainty. This may lead to more dependable and professional cash flow management, which might substantially reduce failures in construction business.


2019 ◽  
Vol 18 (2) ◽  
pp. 308-325
Author(s):  
Emmanuel Dele Omopariola ◽  
Abimbola Windapo ◽  
David John Edwards ◽  
Wellington Didibhuku Thwala

Purpose This paper aims to evaluate Nigerian contractors’ perceptions regarding the effects of positive and negative cash flow during construction projects, with a view to establishing effective strategies for cash flow management. Design/methodology/approach A desktop-based literature review is used to develop a cross-sectional questionnaire survey which uses Likert items to elicit responses from construction professionals on: the reasons for cash flow problems; the impacts of negative and positive cash flow; and the potential solutions for improving cash flow on construction projects. Findings The study finds that delay in payments, difficulty in obtaining financial aid and inadequate budgetary control are the causes of cash flow problems during construction projects. Cumulatively, these issues result in project delays, reduced profit margins and in the worst scenarios, abandoned projects. Originality/value There has been limited research into the effects of positive and negative cash flows on construction projects in Nigeria and indeed, the wider geographical location of West Africa. This study addresses this observed dearth and consequently advances methods and solutions to deal with the problem of poor cash flow management in the Nigerian construction industry.


2018 ◽  
Vol 49 (5) ◽  
pp. 48-63 ◽  
Author(s):  
Ali A. Shash ◽  
Abdulaziz Al Qarra

Cash flow management entails forecasting, monitoring, and controlling practices of the cash inflow and outflow and arrangement of deficits over a project’s duration. This article reveals, through a questionnaire survey, the techniques and practices that construction companies in the Eastern Province of Saudi Arabia follow to forecast and manage cash flow at the project level. The majority of the contractors perform cash flow forecasting for setting a cash flow baseline and determining the proper financing method. They use credit financing for materials, subcontract a good portion of projects, and use company assets and credit financing to pay for equipment and labor.


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