Editor’s Note

“Unknown Element of Owning Costs—Impact of Residual Value.” Residual value is a largely unknown element within cost calculations for construction equipment that equipment managers prepare. Traditional estimation methods fall short of capturing its actual nature over time in detail. In their paper, Lucko, Vorster, and Anderson-Cook consider the current state of knowledge on residual value and on other cost elements used for heavy construction equipment as implemented in a spreadsheet tool for owning and operating cost calculation. Representative examples of cost calculations are used to perform a sensitivity analysis.

“Expanding Finance-Based Scheduling to Devise Overall-Optimized Project Schedules” (technical note). Construction contractors often finance projects using bank credit lines that allow contractors to withdraw money up to certain credit limits. Provided that credit limits can be adequately relaxed, compressed schedules of compressed-duration activities can be attained. Authors Elazouni and Metwally use genetic algorithms to expand finance-based scheduling to devise schedules for relaxed credit limits. The algorithms incorporate a time-cost trade-off analysis to strike a balance between decreased overhead costs and increased direct costs of the activities.

“Improving Cost Estimates of Construction Projects Using Phased Cost Factors” (technical note). Authors Liu and Zhu attempt to identify the critical factors for effective estimation at various stages of typical construction projects. Drawing from organization control theory and cost estimating literature, their paper develops a theoretical framework that identifies the critical factors for effective cost estimation during each of the project phases of a conventional construction project. The underlying logic is that as a cost estimating effort progresses, task programmability and output measurability improve.

“Knowledge-Based Standard Progress Measurement for Integrated Cost and Schedule Performance Control.” The accuracy of detailed project progress measurement may vary depending on specific characteristics of a project, which can lead to misinterpretation of project status. Jung and Kang pose the concept of a standard progress measurement package. Issues for standardization of the work breakdown structure that can embody distinct characteristics of different construction projects are investigated. The methodology uses an historical database and also automates the gathering of progress information using standardized methods and tools.

“Impact of Overmanning on Mechanical and Sheet Metal Labor Productivity.” Hanna, Chang, Lackney, and Sullivan detail the impacts of overmanning on labor productivity for labor-intensive trades. The authors review literature on the effects of overmanning and a survey given to various contractors from which data was collected from 54 mechanical and sheet metal projects located across the United States. Various analyses are performed on the data to determine the quantitative relationship between overmanning and labor productivity, and subsequent conclusions are drawn.

“Simulation-Based Decision Support System for Economical Supply Chain Management of Rebar.” Polat, Arditi, and Mungen present a simulation-based decision support system to assist contractors in selecting the most economical rebar management system prior to the start of construction by recommending lot sizes, scheduling strategy, and buffer sizes given the conditions of the project. The model is beneficial because it generates the probable cost of inventory and allows contractors to select an alternative with the least cost of inventory at the planning stages of a project.

“Fuzzy Approach to Prequalifying Construction Contractors.” Existing methods for contractor prequalification, such as the marking method or subjective judgment method, have been inadequate because it is difficult for decision-makers to investigate contractors’ capabilities against inexact, vague, and qualitative criteria. Li, Nie, and Chen propose a fuzzy framework based fuzzy number theory to solve construction contractor prequalification issues, which includes decision criteria analysis, weights assessment, and decision model development. A case study of a tunnel construction project is used to demonstrate the feasibility of the approach.

“CTAN for Risk Assessments Using Multilevel Stochastic Networks” (technical note). Measuring projects’ cost and schedule risks in an integrated framework using simulation has several modeling challenges yet to be addressed by researchers. Moussa, Ruwanpura, and Jergeas present a multilevel network modeling approach that aims to integrate a combination of different networks into one framework and presents a computer simulation implementation. The simulation model deals equally with risks associated with cost, time, and scope and is verified through several tests.

“BOT Viability Model for Large-Scale Infrastructure Projects.” Salman, Skibniewski, and Basha introduce a decomposed evaluation model developed to assess the most common significant decision factors that strongly affect the feasibility of build-operate-transfer projects. Their paper describes the viability decision factors that were identified and screened with the assistance of a group of industry experts. The factors are classified into three relative categories forming the structure of the proposed model, which presents a new approach to evaluate the relationships between decision factors related to project feasibility determination.

“Effects of Regulation on Highway Pricing and Capacity Choice of a Build-Operate-Transfer Scheme.” In a build-operate-transfer scheme, the main objective for private investors is to determine the project’s profitability while the main objective for the government is whether construction of the project will give positive social welfare to society. Subprasom and Chen provide modeling and analysis of highway pricing and capacity choice of a build-operate-transfer scheme to illustrate the trade-off between the two objectives. Five cases of the build-operate-transfer network design problem are analyzed.

“Systematic Evaluation of Construction Equipment Alternatives: Case Study.” Goldenberg and Shapira present a detailed application example of a model based on a analytical hierarchy process approach. The model is developed to address the difficulties experienced during the multifaceted process of selecting the right equipment for a project. The example illustrates how the model helps address the qualitative, intangible factors by means of a systematic and traceable process. The model allows managers to exercise their knowledge, intuition, and professional judgment, while also addressing the context and specifics of the particular projects under examination.