Probabilistic Model for Cost Contingency
Publication: Journal of Construction Engineering and Management
Volume 129, Issue 3
Abstract
This paper proposes a probabilistic model for the calculation of project cost contingency by considering the expected number of changes and the average cost of change. The model assumes a Poisson arrival pattern for change orders and independent random variables for various change orders. The probability of cost overrun for a given contingency level is calculated. Typical input values to the model are estimated by reviewing several U.S. Army Corps of Engineers project logs, and numerical values of contingency are calculated and presented. The effect of various parameters on the contingency is discussed in detail.
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References
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Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 129 • Issue 3 • June 2003
Pages: 280 - 284
Copyright
Copyright © 2003 American Society of Civil Engineers.
History
Received: Jan 25, 2002
Accepted: May 28, 2002
Published online: May 15, 2003
Published in print: Jun 2003
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