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Skitmore, Martin; Runeson, Goran
doi: 10.1080/01446190600680432pmid: N/A
With notably few exceptions, bidding models contain probability distributions with parameters that are assumed to be fixed, or stationary, over time. Some methods of testing the tenability of this assumption are examined and applied to eight datasets. Of particular interest is the statistical significance of two types of periodicity: (1) that bidders gradually reduce their bids prior to winning a contract; and (2) that bidders have periods in which they are more competitive and periods in which they are less competitive. To test (1), McCaffer and Pettitt's (1976) cusum method is used and shown to have a limited interpretation in this context. McCaffer's ‘deficit’ statistic is then used in conjunction with a one‐way analysis of variance (ANOVA) and shows (1) to be untenable for the samples involved. To test (2), the deficit statistic is again used with an ANOVA to examine all possible sub‐series of bids.
Lewis, Timothy Michael; Hosein, Roger
doi: 10.1080/01446190600658594pmid: N/A
In every country there is a hidden economy operating alongside the formal economy. The published national statistics record only the formal economy. These statistics indicate that the construction industry is an important source of both wealth creation and employment despite the fact that they fail to take account of three important aspects of the sector. These are that the broadly defined construction sector is much larger than the construction industry, what is known as the ‘informal’ sector, and the work done by direct labour organisations. In the absence of actual measures of the size of these aspects, an indirect technique has been used to provide an estimate of their scale. These estimates are used to obtain an overview of their possible impact on the actual role of the sector in terms of output and employment in the economy. The preliminary estimates suggest the overall contribution of construction to the economy of Trinidad and Tobago represents some three times the official Figure.
Zhang, S. B.; Liu, Anita M. M.
doi: 10.1080/01446190600704604pmid: N/A
The vast economic growth in China in the past decade has brought forth opportunities for the development of its construction industry. However, the construction industry in China has been criticised for poor performance and low effectiveness in terms of quality and profitability in the face of challenges and uncertainties resulting from the fast changing economic environment. Given that organisational culture plays a significant role in work performance and effectiveness, the apparently low effectiveness of the construction industry may be related to the culture of the contractors' organisations. The culture–effectiveness (C‐E) relationship has received increased attention in organisational research and the aim of the study is to develop a culture–effectiveness model of the contractors' motivated behaviour towards performance. Results of cluster analysis of the culture profiles of Chinese construction enterprises show that hierarchy and clan cultures are dominant and that culture profiles of Chinese contractors may vary in different geographical regions.
Bogus, Susan M.; Molenaar, Keith R.; Diekmann, James E.
doi: 10.1080/01446190600658529pmid: N/A
Overlapping activities that are traditionally performed in a sequential manner can significantly reduce project delivery times. Overlapping, however, should be approached in a systematic manner to reduce the costs and risks. Information gathered from sector‐based case studies and from the manufacturing domain suggest a formalised framework for identifying overlapping opportunities and strategies can be successfully implemented for infrastructure projects. This framework considers activity characteristics, such as evolution of upstream information and sensitivity of downstream activities to changes in upstream information, to identify appropriate overlapping strategies. Overlapping strategies, such as early freezing of design criteria, overdesign, and early release of preliminary information, are selected based on activity characteristics. These strategies operate either by speeding up the evolution of upstream information or by reducing the sensitivity of downstream activities. By aligning overlapping strategies with activity characteristics, project managers can make better decisions on when and how much to overlap sequential activities to reduce overall project delivery time.
Grosskopf, K. R.; Kibert, Charles J.
doi: 10.1080/01446190600601818pmid: N/A
Searching for new ways to be competitive in an increasingly deregulated market, energy suppliers worldwide have turned to energy conservation measures (ECMs) to avoid costly generation expansion, to build relationships with consumers and to comply with new international emissions standards. To maximise the cost effectiveness of an energy conservation programme, a framework is presented to assess consumer ‘willingness‐to‐pay’ for ECMs and avoided supply costs. The goal of this framework is to provide a methodology to optimise supplier incentives that will maximise consumer adoption and minimise energy production costs. A survey of 400 US homebuyers found that nearly 90% would invest in ECMs. Yet for every two years required to ‘payback’ the initial investment, consumer willingness‐to‐pay declines 25%. A case study of a medium‐size US utility found that most ECMs contribute more to profitable base load reduction than to costly peak load reduction, meaning utility loss in revenue often exceeds avoided supply costs. However, the average housing unit conserving 7,718kWh/yr could save US$216.10 per year, in addition to electricity costs, if the cost of avoided emissions abatement were credited back to the consumer. Based on these savings, expected ECM adoption could eliminate 1.65×108 kWh of energy use and 107,197 tons of CO2 emissions for every 20,000 single family homes.
Mattar, Mahdi H.; Cheah, Charles Y. J.
doi: 10.1080/01446190600658818pmid: N/A
In all large engineering projects, valuation constitutes an important step during the initial stage as each stakeholder assesses the prospect of his or her investment. The complexity of valuation increases dramatically in the face of uncertainty especially when the risks are dynamic and stochastic in nature. The usual classification in finance theory divides risks into either market or unique. In this research, a new notion of private risk is introduced. A private risk may either be correlated with the market or be unique, but in addition it represents a substantial portion of an investor's wealth and is not tradable due to agency costs or other strategic reasons. The principles of pricing would differ according to the treatment of these different types of risks. Methods that are currently in vogue for pricing private risks are first evaluated, followed by a study of the effect of private risks in real option problems. Through a classic oil and gas exploration and development example, it is demonstrated that the methods chosen for pricing private risks can lead to decisively different real option values, exercise strategies and development policies. Effectively, the difference in real option values can be interpreted as a form of private risk premium.
doi: 10.1080/01446190600658891pmid: N/A
Quantitative risk analysis is usually ignored in construction risk management, although numerous techniques are available. One of the shortcomings of conventional quantitative risk analysis techniques is that they can only analyse either duration or cost risks. In view of this, an integrated duration–cost influence network that systematically represents the interdependencies among the duration and cost parameters of a construction task has been developed, and mathematical equations have been formulated to represent the dependencies. The generic structure of the influence network can be used for explicitly modelling risk impacts affecting any construction task, and the nature of risks can be investigated in the risk modelling process. In addition, risk impacts modelled can potentially be propagated through the influence network for quantifying the risk‐adjusted task duration and cost simultaneously. Thus, the influence network provides the basis for performing integrated duration–cost risk modelling and simulation in future research.
doi: 10.1080/01446190600631856pmid: N/A
Periodic review and adjustment of resource allocations to construction projects is critical for subcontractors to maintain profitability under traditional unit price or lump sum contracts. Project managers strive to control subcontractors in an effort to meet budgets and schedules; subcontractors often work on multiple projects simultaneously and strive independently to allocate resources to those projects where they perceive that they will bring maximum utility. An economic game theory model is proposed as a foundation for understanding the behaviour of subcontractors in allocating resources to projects. The model describes the influence of the degree of reliability of the planned schedule on subcontractors' and project managers' behaviours under traditional unit price contracting. Unreliable plans undermine efforts to promote cooperative behaviour.
Raidén, Ani Birgit; Dainty, Andrew R. J.; Neale, Richard H.
doi: 10.1080/01446190600647191pmid: N/A
The ‘people and performance’ model asserts that performance is a sum of employee ability, motivation and opportunity (AMO). Despite extensive evidence of this people–performance link within manufacturing and many service sectors, studies within the construction industry are limited. Thus, a recent research project set out to explore the team deployment strategies of a large construction company with the view of establishing how a balance could be achieved between organisational strategic priorities, operational project requirements and individual employee needs and preferences. The findings suggested that project priorities often took precedence over the delivery of the strategic intentions of the organisation in meeting employees’ individual needs. This approach is not sustainable in the long term because of the negative implications that such a policy had in relation to employee stress and staff turnover. It is suggested that a resourcing structure that takes into account the multiple facets of AMO may provide a more effective approach for balancing organisational strategic priorities, operational project requirements and individual employee needs and preferences more appropriately in the future.
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