Modelling cash flow in construction projects in countries in transition
|
|
- Christopher Stevens
- 5 years ago
- Views:
Transcription
1 Modelling cash flow in construction projects in countries in transition Mladen Raduj kovic Faculty of Civil Engineering, University of Zagreb, Zagreb, Croatia Summary The paper describes the modelling of cash flow in construction projects in countries in transition. Data of construction contribution in investment is shown, as well as GDP and total employed personnel in Croatian construction industry. Analysed are the most important changes which affect construction in a country in transition as well as those changes which affect the modelling of cash flow. In the central part of the paper, the effect of risk and time slacks on the ability to form theoretical curves of cost flows is analysed. Results of research related to the effect of risk on time and cost, performed on 100 randomly chosen construction projects, are presented. The main sources of risk are described. The analysis of the effect of risk is performed with the aid of interpolation of various curves for costs between planned and actually recorded cost curves on the observed projects. Testing for each individually obtained curve for costs is performed through the bestfit approach with 18 theoretical functions. Ranking is performed according to the (hi-square and Kolmogorov-Smirnov tests. The analysis shows that the effect of risk increases the interval of possible shapes of the cost curves and the various possible forms of best approximation. The testing of the effects of reserves for completion also indicates various possible deviations from a single curve. From that then, this paper proposes the creation of a value interval instead of a single theoretical curve. In order to ensure a practical value of results, proposed are criteria by which projects can be grouped. The concluding part of the paper discusses possible application of modelling of cash flow in connection with possible directions of development in a particular country in transition. For example in Croatia the emphasis is oriented on tourism, which like most human activities affects the natural resources which acted like a base for its development. From this then, the paper discusses the need for the development of a model of sustainable development, which includes a balance between commercial success of a project and environmental protection. In the calculation of cash flow it is necessary to include costs of protection of natural resources, but according to a model which protects and unites the interests of investors, government and institutions of environmental protection. Key words: cash flow, country in transition, construction projects, risk, development
2 1. Cash Flow Data related to monetary transactions is not complete if it does not indicate time duration along with cash amounts. Planned cash flow is, therefore, equally important for all partners in construction projects. From the early phases of projects up to the time of contract signing, no partner has the necessary information for the creation of a precise plan for billing or payouts of money. The flow of cash is exceptionally difficult to determine ahead of time due to the influence of a large number of variables which give an unlimited interval of possible profiles. With an insufficient amount of exact information, every partner relies on estimates based on personal experience attained on previous similar structures. Complete repetition of previous steps is acceptable if measures and factors are the same on both projects. In this case it happens seldom, so precision in planning calculations is not guaranteed. During recent years, certain methods of prediction and modelling of cash flow profiles in projects have been developed. All approaches are generally based on the use of certain mathematical formulas and computers. The product is usually a profile with the shape of an S-curve which shows the cumulative value with weaker beginning and ending growth rates in phases of work start-up and finishing. Developed models follow the same concept of cash flow development. That is, the difference of cash in and cash out originated through the conversion of cumulative value curves and cumulative cost commitment curves, using time delays and retention [I]. The primary emphasis of the research is placed on the creation of ideal curves for the various types of projects - Bromilow & Henderson 1977 [2], Hudson 1978 [3], Singh & Won 1984 [4], Tucker 1988 [5], Skitmore 1992 [6], Kaka 1996 [ 11. The importance of past researches have been pointed out by various authors [8, 91, but there still remain various opinions about the level of precision of the proposed methods. 2. Construction in economies in transition Development and construction activity in previously socialist countries was significantly determined by political ideals. In the former Yugoslavia, politics favoured large industrial projects and massive residential building. This was primarily due to the political idea that every worker must have a permanent job and a flat in which to live for a minimal cost. Together with permanent investment in infrastructure, that insured the construction industry in Croatia a portion of about 50% in investments and about 10% in GDP, and S-10% of all employed people worked in the construction industry [IO]. Like the other industrial branches, construction had insured employment and market through required government support in cases of poor functioning of some company. So, for the evaluation of the success of a construction project, emphasis was placed on the technical correctness and functionality of a structure, while cost and time were not primary criteria for the evaluation of success. Methods of evaluating and keeping record of cash flows in construction projects were only partially used. There are few examples in modern history where such a large amount of significant changes occurred in a short period simultaneously like in Croatia: war, creation of state, change in social organisation, change in the economic system and a shift to a market
3 economy, privatisation,... For the construction industry, the following changes are especially significant: Reduction of investments and employment in construction. Insufficient capital in companies. Absence of government support in cases of poor performance. Opening of the market for foreign competition. Significant reduction of the number of employees in large companies, with simultaneous changes in the structure of employed personnel in favour of production workers and the opening of a large number of smaller companies. Change in the ownership structure of the company in which significant shares are taken over by groups of individuals, therefore, a change in the manner of managing and decision making. Removal of non-construction and secondary activities in the structure of the company. Time and money spent on construction and later on maintenance of the structure become important criteria for evaluating success s Id II g 80 z k8 60 a Year Fig. 1: GDP, investment, construction works and employment (1990. y. =loo%) [lo] In each of the mentioned changes the significance of money, which is much in demand on the market, was emphasised. The way money is managed becomes a key factor for success for individuals and companies, and, therefore, for the general economy in transition. Planning and control of cash flow in construction projects becomes exceptionally significant for every contractor and investor. 3. Influence of risk on cash flow The formula which was most commonly used for predicting cash flow in construction projects was the one published by the Department of Health and Social Security in Great Britain [3]. That is one formula with which it is necessary to use a series of pairs
4 of parameter values for the creation of the correct curve for a project of a particular size. The DHSS formula was tested by numerous researchers with the goal of improving and simplifying it. Skitmore [6] analysed the DHSS formula on 27 completed construction projects grouped into four basic types. Research into various models for predicting best values for parameters shows that they are all equally productive, and that well grouped structures significantly improves the quality of forecasting. Tucker 1988 [S]. proposed an alternative form and use the Weibull function with seven parameters. Kaka and Price [IS] performed research on about 150 completed construction projects, who s individual and group analyses determined that cost commitment models are more accurate and reliable than value models. Kaka 1996 [l] proposed a model with a large number of variables and stochastic simulation which includes analysis of the effects of risk. Taking into consideration results of previous research which indicated that the shape of a curve depends on the sum of costs [5], type and size of project, and type of contract [6, 81, we have attempted to look into additional effects - especially risk and activity time slacks k Construction projects finished in Fig. 2: Occurrence of overruns of planned times and planned money in samples of construction projects in the year of Our beginning research [ 11, 121 consisted of creating project plans for a large number of construction projects. Curves of planned costs were then constructed from these project plans. At various points of completion, status control was exercised and data was collected. With the data it was possible to: 1. Construct an actual cost curve. 2. Perform further forecasting for a planned curve at individual points of completion. 3. Analyse the causes of deviation between planned and actual cost curves. For modelling cash flow especially significant are results related to deviations between planned and actual cost curves. Research into 100 randomly chosen construction projects showed an average of 66% overruns in planned times and an average of 1 7% overruns in planned costs [ 131, with about 18% of extreme cases with a time overrun of
5 over 100%. Added research in the year of 1997, with data from 1996/97, shows that overruns of planned times occurred in 74% of projects, and overruns of planned costs in 69% of projects. Research shows that in about 2/3 of construction projects there exists a general trend of problems with overruns of planned times and costs. The analysis of risk indicates that a dominant portion, 58%, of risk is from internal sources which have causes rooted in the project. That shows that although there exists a problem of large changes in the transition market, individuals and companies that adapt too slowly to the changing global market are largely responsible for project shortcomings. Five dominant sources of risk according to occurring frequency are climate, local permits, poor project preparation and participant optimism, unsolved financing of the project and incomplete technical documentation. The analysis of sources of risk in a transitional market like in, Croatia, indicates that according to occurring frequency criteria and degree of negative influence on planned time and cost goals in construction projects, the dominant problems are unrealistic and overoptimistic planned goals and unsolved financing along with various forms of limitations. The effects of risk are a significant factor which creates differences in cash flow in construction projects. Risks cause differences even between completely similar projects, so it is therefore difficult to group projects by particular criteria and automatically have similarities in cash flows. For the analysis of effects of risk we have performed an interpolation of various cost curves between planned and actually recorded cost curves on observed projects. We took into account that initial plans were overoptimistic and varied the effect of risk. Testing of individual obtained cost curves was performed through the bestfit approach with 18 theoretical functions [ 141. Ranking was done according to the Chi square and Kolmogorov-Smirnov tests. Analysis shows that with increased elimination of effects of risk normal distribution becomes dominant, however, if risk is included in projects then variations in results are increased. Rayleigh Beta 10% Erlang 2% Logistic 17% Weibull 21% Fig. 3: Results of bestfit approach - rank according to Chi square test - minimal risk effects included
6 Performed research indicates that: 1. Effects of risk significantly influence the possible shape of cash flow curves. 2. Considering the impossibility of eliminating all risks in a project, or the ability to exactly forecast all risks in early phases of projects, research shows that the precision of individual theoretically obtained curves is questionable. It is, therefore, better to determine an interval of possible values instead of attempting to predict exact individual values. 4. Influence of time slacks on cash flow The other significant factor affecting the shape of cost flow curves is the allowance to complete certain activities at various times. The use of network planning techniques enables the identification of noncritical activities who s planned completion is always within the area of Early Start (ES) - Late Start (LS). In practice, this means that instead of one specific cost flow curve it is possible to construct an area of cost flow with boundaries ES and LS curves. All values within the boundary area are possible and represent completion according to plan. Reserves in completion an activity time are positive in every case of management, and contractors closely study them during preparation. From this point of view as well, then, it is also difficult to determine one particular curve which will absolutely represent cash flow in a construction project. On Fig. 4., shown is the area of LS cost flow curve for a group of projects concerning small tourist structures with 4 floors and an average completion time of one construction season and an average price of construction works of 1.5 mil. DEM (without furnishings). In comparison shown is cost curve obtained through the application of theoretical formulas from literature [5], for which it can be said that it probably represents an interpolation within ES and LS areas g E 40 a * Time +1 -a-2 +3 *4 -m-s lo -D-l1 +12 *13 -m-14 -nub j@D20 Fig. 4: Examples of cost curve areas for late start and minimal effects of risk (19 = average sample for late start Weibull(l.92 ; 0,60); (20 = theoretical Weibull curve (1,98;0,53) [5] ;)
7 The area between curves 19 and 20 might represent an interval of probably values for cost curve in this case, with included minimal effects of risk and no final time and cost overruns. Using results of our work and work done by other researchers, for a practical application we have adopted an approach which dictates that for determining cost flow curves, boundaries of curve group intervals should be set. In order for results to have practical values the interval has to be sufficiently narrow. This is achieved by grouping projects by numerous similarity variables: 1. Similar technical characteristics of structures. 2. For costs in intervals up to 1; 1-2; 2-4;...(mil. DEM). 3. For project duration in intervals up to 0,5; 0,5-l; l-2; 2-3, more than 3 (years). 4. In conditions of control or effect of similar primary sources of risk. 5. Same type of contract. 6. Same size of contractor. 5. Sustainable development and cash flow planning in economies in transition The motive for a new project in every economy is the desire for development and profit. In an economy in transition these wishes are even more evident but at the same time are limited by a shortage of cash for investment into development. During the socialist era, development was carried out in the name of development through which the success of political ideals was proved. Through political and economic changes, countries in transition are trying to follow economic laws of market economies in order to achieve a standard and level equal to that in developed countries. In this approach, complete copying of development paths and development of the same areas could be contraproductive. Economies in transition have to follow their own development path in which the speed and quality of development will be harmonious. It is precisely the quality of development which points toward a need for orientation in the direction of traditional resources and wealth of a country in transition. An alternative to secondary or unclear production which is simply transferred from developed countries can be found in modelling of sustainable development. For example in, Croatia, this could be an emphasised orientation on services in which tourism development dominates. Tourism is a significant factor in development plans in many countries in transition. Culture, history, and natural beauty can serve as an excellent base for the development of tourism if the safety of tourists and acceptable prices and quality of service can be guaranteed. However, like most human activities tourism has consequences that affect the base which determines its initial development. This implies a spiralling reduction in natural resources: scenery, water,... A high level of information, a conscientious plan of environmental protection and the monitoring of laws and bylaws in developed countries enables countries in transition to make good decisions on time. In the case of tourism this is controlled sustainable development, in which at the project planning phase it is necessary to include plans for protection of natural resources. In, Croatia, research looking into air and water pollution control, and solid waste disposal is being developed. Some results for example indicate that it is possible to solve the solid waste problem of the tourist area of the southern Adriatic coast in,
8 Croatia, with a yearly investment of about 4 mil. DEM. [ 151. With cash flow modelling, or economic parameters of projects, it is possible to find a model for parallel tourism development and environmental protection. Since investors are significantly burdened with expectations of maximum profit, and, hence, minimum costs, it is probable that local and government authorities will have to control the process. This could happen through permits, concessions, regulations, laws, bylaws, and a system of penalties or benefits. That is an important co-operative effort between the investor, government, and institutions which ensure environmental protection. Success primarily depends on the modelling of an acceptable cash flow solution in projects according to balanced criteria settled bv all parties involved. 6. Referen.ces Kaka A.P. (1996) Towards more flexible and accurate cash flow forecasting, Construction Management and Economics 14, Bromilow F. J & Henderson J.A. (1977) Procedures for Reckoning and Valuing the Performance of Building Contracts, CSIRO Div. of Building Research, Highett Hudson K. W. (1978) DHSS expenditure forecasting model, Chartered Quantity Surveying Quartile, 5, 3,42-45 Singh S. & Woon P.W. (1984) Cash flow trends for high rise buildings, Proceedings of the International Symposium on Organisation and Management of Construction, University of Waterloo, Canada, pp Tucker S. N. (1988) A single alternative formula for DHSS S-curves, Construction Management and Economics 6, Skitmore M. (1992) Parameter prediction for cash flow forecasting models, Construction Management and Economics 10, Singh S. (1996) Cash flow trends for infrastructural works in residential developments, Shaping theory and practice (vol. 2) E&FN Spoon, London. Kaka A.P. & Price A.D.F. (1993) Modelling standard cost commitment curves for contractors cash flow forecasting, Construction Management and Economics 11, Harris & McCaffer (1989) Modern Construction Management, BSP, Oxford. Statistical yearbook of Croatia, 1994., 1995., Statisticki zavod RH, Zagreb. Izetbegovic J. & Radujkovic M. (1996) Research on projects realisation trends, Proceedings of international symposium Information systems 95, University of Zagreb, Varazdin 1995, p. Bl-5. Simic T. & Pejovic T. & Radujkovic M. (1997) Information system for planning and control of cash flow in a project, Proceedings of international symposium Information systems 96, University of Zagreb, Varazdin 1996, p. 16 l Radujkovic M. (1997) Risk sources and drivers in construction projects, Management risks in projects, E&FN Spoon, London, Bestfit, Palisade Co., N.Y., Milcic J. (1997) Solution to the problem of solid communal waste from Makarska to Dubrovnik, Gradevinar 49-4, p
Textbook: pp Chapter 11: Project Management
1 Textbook: pp. 405-444 Chapter 11: Project Management 2 Learning Objectives After completing this chapter, students will be able to: Understand how to plan, monitor, and control projects with the use
More informationRISK REGISTERS IN CONSTRUCTION IN CROATIA
RISK REGISTERS IN CONSTRUCTION IN CROATIA Ivana Burcar 1 and Mladen Radujkovic 2 1,2 Department of Construction Management, Faculty of Civil Engineering, University of Zagreb, Kaciceva 26, 10 000 Zagreb,
More information1 of 14 4/27/2009 7:45 AM
1 of 14 4/27/2009 7:45 AM Chapter 7 - Network Models in Project Management INTRODUCTION Most realistic projects that organizations like Microsoft, General Motors, or the U.S. Defense Department undertake
More informationIntroduction. Introduction. Six Steps of PERT/CPM. Six Steps of PERT/CPM LEARNING OBJECTIVES
Valua%on and pricing (November 5, 2013) LEARNING OBJECTIVES Lecture 12 Project Management Olivier J. de Jong, LL.M., MM., MBA, CFD, CFFA, AA www.olivierdejong.com 1. Understand how to plan, monitor, and
More informationProject Management Chapter 13
Lecture 12 Project Management Chapter 13 Introduction n Managing large-scale, complicated projects effectively is a difficult problem and the stakes are high. n The first step in planning and scheduling
More informationAppendix A. Selecting and Using Probability Distributions. In this appendix
Appendix A Selecting and Using Probability Distributions In this appendix Understanding probability distributions Selecting a probability distribution Using basic distributions Using continuous distributions
More informationStochastic model of flow duration curves for selected rivers in Bangladesh
Climate Variability and Change Hydrological Impacts (Proceedings of the Fifth FRIEND World Conference held at Havana, Cuba, November 2006), IAHS Publ. 308, 2006. 99 Stochastic model of flow duration curves
More informationHedging Derivative Securities with VIX Derivatives: A Discrete-Time -Arbitrage Approach
Hedging Derivative Securities with VIX Derivatives: A Discrete-Time -Arbitrage Approach Nelson Kian Leong Yap a, Kian Guan Lim b, Yibao Zhao c,* a Department of Mathematics, National University of Singapore
More informationOptimization Prof. A. Goswami Department of Mathematics Indian Institute of Technology, Kharagpur. Lecture - 18 PERT
Optimization Prof. A. Goswami Department of Mathematics Indian Institute of Technology, Kharagpur Lecture - 18 PERT (Refer Slide Time: 00:56) In the last class we completed the C P M critical path analysis
More informationPerformance risk evaluation of long term infrastructure projects (PPP-BOT projects) using probabilistic methods
EPPM, Singapore, 20-21 Sep 2011 Performance risk evaluation of long term infrastructure projects (PPP-BOT projects) using probabilistic Meghdad Attarzadeh 1 and David K H Chua 2 Abstract Estimation and
More informationUNIT-II Project Organization and Scheduling Project Element
UNIT-II Project Organization and Scheduling Project Element Five Key Elements are Unique. Projects are unique, one-of-a-kind, never been done before. Start and Stop Date. Projects must have a definite
More informationADVANCED QUANTITATIVE SCHEDULE RISK ANALYSIS
ADVANCED QUANTITATIVE SCHEDULE RISK ANALYSIS DAVID T. HULETT, PH.D. 1 HULETT & ASSOCIATES, LLC 1. INTRODUCTION Quantitative schedule risk analysis is becoming acknowledged by many project-oriented organizations
More informationStochastic Analysis Of Long Term Multiple-Decrement Contracts
Stochastic Analysis Of Long Term Multiple-Decrement Contracts Matthew Clark, FSA, MAAA and Chad Runchey, FSA, MAAA Ernst & Young LLP January 2008 Table of Contents Executive Summary...3 Introduction...6
More informationCharacterization of the Optimum
ECO 317 Economics of Uncertainty Fall Term 2009 Notes for lectures 5. Portfolio Allocation with One Riskless, One Risky Asset Characterization of the Optimum Consider a risk-averse, expected-utility-maximizing
More informationSCHEDULE CREATION AND ANALYSIS. 1 Powered by POeT Solvers Limited
SCHEDULE CREATION AND ANALYSIS 1 www.pmtutor.org Powered by POeT Solvers Limited While building the project schedule, we need to consider all risk factors, assumptions and constraints imposed on the project
More informationSTOCHASTIC COST ESTIMATION AND RISK ANALYSIS IN MANAGING SOFTWARE PROJECTS
Full citation: Connor, A.M., & MacDonell, S.G. (25) Stochastic cost estimation and risk analysis in managing software projects, in Proceedings of the ISCA 14th International Conference on Intelligent and
More informationSIMULATION CHAPTER 15. Basic Concepts
CHAPTER 15 SIMULATION Basic Concepts Monte Carlo Simulation The Monte Carlo method employs random numbers and is used to solve problems that depend upon probability, where physical experimentation is impracticable
More informationCost Overrun Assessment Model in Fuzzy Environment
American Journal of Engineering Research (AJER) e-issn : 2320-0847 p-issn : 2320-0936 Volume-03, Issue-07, pp-44-53 www.ajer.org Research Paper Open Access Cost Overrun Assessment Model in Fuzzy Environment
More informationCash and liquidity management
Cash and liquidity management 2013-03-15 Current Assets Management E-mail: erasmus.michalski@gmail.com www: HTTP://MICHALSKIG.UE.WROC.PL/ Mobile: 0503452860 5 meetings + 1 exam (test) Next meeting:. T.
More informationTime allowed : 3 hours Maximum marks : 100. Total number of questions : 8 Total number of printed pages : 7 PART A
: 1 : Roll No... Time allowed : 3 hours Maximum marks : 100 Total number of questions : 8 Total number of printed pages : 7 PART A (Answer Question No.1 which is compulsory and any two of the rest from
More informationP2 Performance Management May 2013 examination
Management Level Paper P2 Performance Management May 2013 examination Examiner s Answers Note: Some of the answers that follow are fuller and more comprehensive than would be expected from a well-prepared
More informationUPDATED IAA EDUCATION SYLLABUS
II. UPDATED IAA EDUCATION SYLLABUS A. Supporting Learning Areas 1. STATISTICS Aim: To enable students to apply core statistical techniques to actuarial applications in insurance, pensions and emerging
More informationMONTE CARLO SIMULATION AND PARETO TECHNIQUES FOR CALCULATION OF MULTI- PROJECT OUTTURN-VARIANCE
MONTE CARLO SIMULATION AND PARETO TECHNIQUES FOR CALCULATION OF MULTI- PROJECT OUTTURN-VARIANCE Keith Futcher 1 and Anthony Thorpe 2 1 Colliers Jardine (Asia Pacific) Ltd., Hong Kong 2 Department of Civil
More informationThe Effects of Responsible Investment: Financial Returns, Risk, Reduction and Impact
The Effects of Responsible Investment: Financial Returns, Risk Reduction and Impact Jonathan Harris ET Index Research Quarter 1 017 This report focuses on three key questions for responsible investors:
More informationModelling component reliability using warranty data
ANZIAM J. 53 (EMAC2011) pp.c437 C450, 2012 C437 Modelling component reliability using warranty data Raymond Summit 1 (Received 10 January 2012; revised 10 July 2012) Abstract Accelerated testing is often
More informationmachine design, Vol.7(2015) No.4, ISSN pp
machine design, Vol.7(205) No.4, ISSN 82-259 pp. 9-24 Research paper ANALYSIS AND RISK ASSESSMENT OF IMPLEMENTATION OF THE AUTOMATED CAR PARKING SYSTEM PROJECT Radoslav TOMOVIĆ, * - Rade GRUJIČIĆ University
More informationCatastrophe Reinsurance Pricing
Catastrophe Reinsurance Pricing Science, Art or Both? By Joseph Qiu, Ming Li, Qin Wang and Bo Wang Insurers using catastrophe reinsurance, a critical financial management tool with complex pricing, can
More informationAllocate and Level Project Resources
Allocate and Level Project Resources Resource Allocation: Defined Resource Allocation is the scheduling of activities and the resources required by those activities while taking into consideration both
More informationA MATHEMATICAL PROGRAMMING APPROACH TO ANALYZE THE ACTIVITY-BASED COSTING PRODUCT-MIX DECISION WITH CAPACITY EXPANSIONS
A MATHEMATICAL PROGRAMMING APPROACH TO ANALYZE THE ACTIVITY-BASED COSTING PRODUCT-MIX DECISION WITH CAPACITY EXPANSIONS Wen-Hsien Tsai and Thomas W. Lin ABSTRACT In recent years, Activity-Based Costing
More informationCHAPTER 6 CRASHING STOCHASTIC PERT NETWORKS WITH RESOURCE CONSTRAINED PROJECT SCHEDULING PROBLEM
CHAPTER 6 CRASHING STOCHASTIC PERT NETWORKS WITH RESOURCE CONSTRAINED PROJECT SCHEDULING PROBLEM 6.1 Introduction Project Management is the process of planning, controlling and monitoring the activities
More information[D7] PROBABILITY DISTRIBUTION OF OUTSTANDING LIABILITY FROM INDIVIDUAL PAYMENTS DATA Contributed by T S Wright
Faculty and Institute of Actuaries Claims Reserving Manual v.2 (09/1997) Section D7 [D7] PROBABILITY DISTRIBUTION OF OUTSTANDING LIABILITY FROM INDIVIDUAL PAYMENTS DATA Contributed by T S Wright 1. Introduction
More informationFrequency Distribution Models 1- Probability Density Function (PDF)
Models 1- Probability Density Function (PDF) What is a PDF model? A mathematical equation that describes the frequency curve or probability distribution of a data set. Why modeling? It represents and summarizes
More informationEnergy Price Processes
Energy Processes Used for Derivatives Pricing & Risk Management In this first of three articles, we will describe the most commonly used process, Geometric Brownian Motion, and in the second and third
More informationProbabilistic Completion Time in Project Scheduling Min Khee Chin 1, Sie Long Kek 2, Sy Yi Sim 3, Ta Wee Seow 4
Probabilistic Completion Time in Project Scheduling Min Khee Chin 1, Sie Long Kek 2, Sy Yi Sim 3, Ta Wee Seow 4 1 Department of Mathematics and Statistics, Universiti Tun Hussein Onn Malaysia 2 Center
More informationMortality Rates Estimation Using Whittaker-Henderson Graduation Technique
MATIMYÁS MATEMATIKA Journal of the Mathematical Society of the Philippines ISSN 0115-6926 Vol. 39 Special Issue (2016) pp. 7-16 Mortality Rates Estimation Using Whittaker-Henderson Graduation Technique
More informationPERFORMANCE MEASUREMENT (1) FINANCIAL PERFORMANCE:
PERFORMANCE MEASUREMENT (1) FINANCIAL PERFORMANCE: GROWTH: Revenue / Profits / EBITDA / Market Share PROFITABILITY: Absolute profit / ROCE / Profit margin GEARING: Gearing ratio LIQUIDITY: Current ratio
More informationAnswers To Chapter 6. Review Questions
Answers To Chapter 6 Review Questions 1 Answer d Individuals can also affect their hours through working more than one job, vacations, and leaves of absence 2 Answer d Typically when one observes indifference
More informationSubject CS2A Risk Modelling and Survival Analysis Core Principles
` Subject CS2A Risk Modelling and Survival Analysis Core Principles Syllabus for the 2019 exams 1 June 2018 Copyright in this Core Reading is the property of the Institute and Faculty of Actuaries who
More informationChapter 1. The Role of Financial Management
Chapter 1 The Role of Financial Management What is Financial Management? Concerns the acquisition, financing, and management of assets with some overall goal in mind. Investment Decisions Most important
More informationMBEJ 1023 Dr. Mehdi Moeinaddini Dept. of Urban & Regional Planning Faculty of Built Environment
MBEJ 1023 Planning Analytical Methods Dr. Mehdi Moeinaddini Dept. of Urban & Regional Planning Faculty of Built Environment Contents What is statistics? Population and Sample Descriptive Statistics Inferential
More informationDOCUMENT OF THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT STRATEGY FOR CROATIA: REPORT ON THE INVITATION TO THE PUBLIC TO COMMENT
DOCUMENT OF THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT STRATEGY FOR CROATIA: 2010-2013 REPORT ON THE INVITATION TO THE PUBLIC TO COMMENT TABLE OF CONTENTS 1. INTRODUCTION...3 2. COMMENTS RECEIVED
More informationThe Duration Derby: A Comparison of Duration Based Strategies in Asset Liability Management
The Duration Derby: A Comparison of Duration Based Strategies in Asset Liability Management H. Zheng Department of Mathematics, Imperial College London SW7 2BZ, UK h.zheng@ic.ac.uk L. C. Thomas School
More informationChapter 4. The Normal Distribution
Chapter 4 The Normal Distribution 1 Chapter 4 Overview Introduction 4-1 Normal Distributions 4-2 Applications of the Normal Distribution 4-3 The Central Limit Theorem 4-4 The Normal Approximation to the
More information1 Exercise One. 1.1 Calculate the mean ROI. Note that the data is not grouped! Below you find the raw data in tabular form:
1 Exercise One Note that the data is not grouped! 1.1 Calculate the mean ROI Below you find the raw data in tabular form: Obs Data 1 18.5 2 18.6 3 17.4 4 12.2 5 19.7 6 5.6 7 7.7 8 9.8 9 19.9 10 9.9 11
More informationRealization on Construction management of residential apartments
IOSR Journal of Mechanical and Civil Engineering (IOSR-JMCE) e-issn: 78-684,p-ISSN: 0-4X, Volume, Issue, Ver. II (May- Jun. 06), PP 49-56 www.iosrjournals.org Realization on Construction management of
More informationP1 Performance Evaluation
Management Accounting Pillar Managerial Level Paper P1 Management Accounting Performance Evaluation 24 November 2009 Tuesday Morning Session Instructions to candidates You are allowed three hours to answer
More information6/7/2018. Overview PERT / CPM PERT/CPM. Project Scheduling PERT/CPM PERT/CPM
/7/018 PERT / CPM BSAD 0 Dave Novak Summer 018 Overview Introduce PERT/CPM Discuss what a critical path is Discuss critical path algorithm Example Source: Anderson et al., 01 Quantitative Methods for Business
More informationProject Time-Cost Trade-Off
Project Time-Cost Trade-Off 7.1 Introduction In the previous chapters, duration of activities discussed as either fixed or random numbers with known characteristics. However, activity durations can often
More informationDO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO. Performance Pillar. P1 Performance Operations. Wednesday 27 August 2014
DO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO. Performance Pillar P1 Performance Operations Instructions to candidates Wednesday 27 August 2014 You are allowed three hours to answer this
More informationREPUBLIC OF CROATIA CROATIAN COMPETITION AGENCY ANNUAL REPORT. on State Aid for 2007
REPUBLIC OF CROATIA CROATIAN COMPETITION AGENCY ANNUAL REPORT on State Aid for 2007 (English summary) November 2008 CONTENTS 1. INTRODUCTION 3 2. STATE AID IN 2007 5 2.1. Categories of state aid 9 2.2.
More informationRISK MITIGATION IN FAST TRACKING PROJECTS
Voorbeeld paper CCE certificering RISK MITIGATION IN FAST TRACKING PROJECTS Author ID # 4396 June 2002 G:\DACE\certificering\AACEI\presentation 2003 page 1 of 17 Table of Contents Abstract...3 Introduction...4
More informationEmpirical Issues in Crop Reinsurance Decisions. Prepared as a Selected Paper for the AAEA Annual Meetings
Empirical Issues in Crop Reinsurance Decisions Prepared as a Selected Paper for the AAEA Annual Meetings by Govindaray Nayak Agricorp Ltd. Guelph, Ontario Canada and Calum Turvey Department of Agricultural
More informationGN47: Stochastic Modelling of Economic Risks in Life Insurance
GN47: Stochastic Modelling of Economic Risks in Life Insurance Classification Recommended Practice MEMBERS ARE REMINDED THAT THEY MUST ALWAYS COMPLY WITH THE PROFESSIONAL CONDUCT STANDARDS (PCS) AND THAT
More informationApplication of Earned Value Management (EVM) for Effective Project Control
Application of Earned Value Management (EVM) for Effective Project Control Course No: B02-012 Credit: 2 PDH Boris Shvartsberg, Ph.D., P.E., P.M.P. Continuing Education and Development, Inc. 9 Greyridge
More informationCHAPTER 10 PROJECT CONTROL
CHAPTER 0 PROJECT CONTROL The limited objective of project control deserves emphasis. Project control procedures are primarily intended to identify deviations from the project plan rather than to suggest
More informationINTRODUCTION TO FINANCIAL MANAGEMENT
INTRODUCTION TO FINANCIAL MANAGEMENT Meaning of Financial Management As we know finance is the lifeblood of every business, its management requires special attention. Financial management is that activity
More informationEconometrics and Economic Data
Econometrics and Economic Data Chapter 1 What is a regression? By using the regression model, we can evaluate the magnitude of change in one variable due to a certain change in another variable. For example,
More informationTAIL RISK HEDGING FOR PENSION FUNDS
OCTOBER 2013 TAIL RISK HEDGING FOR PENSION FUNDS Dan Mikulskis Redington Karim Traore Societe Generale THIS DOCUMENT IS FOR THE EXCLUSIVE USE OF INVESTORS ACTING ON THEIR OWN ACCOUNT AND CATEGORISED EITHER
More information,,, be any other strategy for selling items. It yields no more revenue than, based on the
ONLINE SUPPLEMENT Appendix 1: Proofs for all Propositions and Corollaries Proof of Proposition 1 Proposition 1: For all 1,2,,, if, is a non-increasing function with respect to (henceforth referred to as
More informationSTARRY GOLD ACADEMY , , Page 1
ICAN KNOWLEDGE LEVEL QUANTITATIVE TECHNIQUE IN BUSINESS MOCK EXAMINATION QUESTIONS FOR NOVEMBER 2016 DIET. INSTRUCTION: ATTEMPT ALL QUESTIONS IN THIS SECTION OBJECTIVE QUESTIONS Given the following sample
More informationEngineering Economics and Financial Accounting
Engineering Economics and Financial Accounting Unit 4: Costing Major Topics are: Job Costing Operating Costing Process Costing Standard Costing (Variance Analysis) Gross Domestic Product (GDP) Job Costing
More informationRISK MANAGEMENT IN CONSTRUCTION PROJECTS
International Journal of Advances in Applied Science and Engineering (IJAEAS) ISSN (P): 2348-1811; ISSN (E): 2348-182X Vol-1, Iss.-3, JUNE 2014, 162-166 IIST RISK MANAGEMENT IN CONSTRUCTION PROJECTS SUDARSHAN
More informationWorking Paper #1. Optimizing New York s Reforming the Energy Vision
Center for Energy, Economic & Environmental Policy Rutgers, The State University of New Jersey 33 Livingston Avenue, First Floor New Brunswick, NJ 08901 http://ceeep.rutgers.edu/ 732-789-2750 Fax: 732-932-0394
More informationELEMENTS OF MONTE CARLO SIMULATION
APPENDIX B ELEMENTS OF MONTE CARLO SIMULATION B. GENERAL CONCEPT The basic idea of Monte Carlo simulation is to create a series of experimental samples using a random number sequence. According to the
More informationThe valuation of insurance liabilities under Solvency 2
The valuation of insurance liabilities under Solvency 2 Introduction Insurance liabilities being the core part of an insurer s balance sheet, the reliability of their valuation is the very basis to assess
More informationPassing the repeal of the carbon tax back to wholesale electricity prices
University of Wollongong Research Online National Institute for Applied Statistics Research Australia Working Paper Series Faculty of Engineering and Information Sciences 2014 Passing the repeal of the
More informationSTOCHASTIC COST ESTIMATION AND RISK ANALYSIS IN MANAGING SOFTWARE PROJECTS
STOCHASTIC COST ESTIMATION AND RISK ANALYSIS IN MANAGING SOFTWARE PROJECTS Dr A.M. Connor Software Engineering Research Lab Auckland University of Technology Auckland, New Zealand andrew.connor@aut.ac.nz
More informationMethodological and organizational problems of professional risk management in construction
Methodological and organizational problems of professional risk management in construction Evgeny Sugak 1* 1 Moscow State University of Civil Engineering, Yaroslavskoe shosse, 26, Moscow, 129337, Russia
More informationWeek 1 Variables: Exploration, Familiarisation and Description. Descriptive Statistics.
Week 1 Variables: Exploration, Familiarisation and Description. Descriptive Statistics. Convergent validity: the degree to which results/evidence from different tests/sources, converge on the same conclusion.
More informationProbabilistic Benefit Cost Ratio A Case Study
Australasian Transport Research Forum 2015 Proceedings 30 September - 2 October 2015, Sydney, Australia Publication website: http://www.atrf.info/papers/index.aspx Probabilistic Benefit Cost Ratio A Case
More informationFactsheet on Undeclared Work CROATIA
Factsheet on Undeclared Work CROATIA 1.1 Nature and Estimated Scale of Undeclared Work 1.1.1 Definition of undeclared work Definition of undeclared work in Croatia follows the definition set at the EU
More informationLars Heikensten: Monetary policy and potential growth
Lars Heikensten: Monetary policy and potential growth Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, to the Swedish Economics Association, Stockholm, 8 March. * * * Let me begin by thanking
More informationChapter 1 Microeconomics of Consumer Theory
Chapter Microeconomics of Consumer Theory The two broad categories of decision-makers in an economy are consumers and firms. Each individual in each of these groups makes its decisions in order to achieve
More information8: Economic Criteria
8.1 Economic Criteria Capital Budgeting 1 8: Economic Criteria The preceding chapters show how to discount and compound a variety of different types of cash flows. This chapter explains the use of those
More informationTechnical analysis of selected chart patterns and the impact of macroeconomic indicators in the decision-making process on the foreign exchange market
Summary of the doctoral dissertation written under the guidance of prof. dr. hab. Włodzimierza Szkutnika Technical analysis of selected chart patterns and the impact of macroeconomic indicators in the
More informationThe duration derby : a comparison of duration based strategies in asset liability management
Edith Cowan University Research Online ECU Publications Pre. 2011 2001 The duration derby : a comparison of duration based strategies in asset liability management Harry Zheng David E. Allen Lyn C. Thomas
More informationEvaluating the Degree Influence of Different Factors on the Exchange Rates in Ukraine
Evaluating the Degree Influence of Different Factors on the Exchange Rates in Ukraine SHCHERBAK A.V. Department of Applied Mathematics National Technical University of Ukraine Kiev Polytechnic Institute
More informationElaboration of strategic plans for territory development based on the implementation of investment and construction projects
Elaboration of strategic plans for territory development based on the implementation of investment and construction projects Elena Akimova 1,* 1 Moscow State University of Civil Engineering, Yaroslavskoe
More informationUsing Monte Carlo Analysis in Ecological Risk Assessments
10/27/00 Page 1 of 15 Using Monte Carlo Analysis in Ecological Risk Assessments Argonne National Laboratory Abstract Monte Carlo analysis is a statistical technique for risk assessors to evaluate the uncertainty
More informationTHE APPLICATION OF ESSENTIAL ECONOMIC PRINCIPLES IN ARMED FORCES
THE APPLICATION OF ESSENTIAL ECONOMIC PRINCIPLES IN ARMED FORCES ENG. VENDULA HYNKOVÁ Abstract The paper defines the role of economics as a discipline in the area of defence. There are specified ten major
More information5 th Annual CARISMA Conference MWB, Canada Square, Canary Wharf 2 nd February ialm. M A H Dempster & E A Medova. & Cambridge Systems Associates
5 th Annual CARISMA Conference MWB, Canada Square, Canary Wharf 2 nd February 2010 Individual Asset Liability Management ialm M A H Dempster & E A Medova Centre for Financial i Research, University it
More informationSAS Data Mining & Neural Network as powerful and efficient tools for customer oriented pricing and target marketing in deregulated insurance markets
SAS Data Mining & Neural Network as powerful and efficient tools for customer oriented pricing and target marketing in deregulated insurance markets Stefan Lecher, Actuary Personal Lines, Zurich Switzerland
More informationAccelerated Option Pricing Multiple Scenarios
Accelerated Option Pricing in Multiple Scenarios 04.07.2008 Stefan Dirnstorfer (stefan@thetaris.com) Andreas J. Grau (grau@thetaris.com) 1 Abstract This paper covers a massive acceleration of Monte-Carlo
More informationPERMUTATION AND COMBINATIONS APPROACH TO PROGRAM EVALUATION AND REVIEW TECHNIQUE
VOL. 2, NO. 6, DECEMBER 7 ISSN 1819-6608 6-7 Asian Research Publishing Network (ARPN). All rights reserved. PERMUTATION AND COMBINATIONS APPROACH TO PROGRAM EVALUATION AND REVIEW TECHNIQUE A. Prabhu Kumar
More informationComparative Study Of Pre-Planning And Actual Planning Process In Construction Industries
International journal of Emerging Trends in Science and Technology Comparative Study Of Pre-Planning And Actual Planning Process In Construction Industries Authors B.Annalakshmi*, Dr.C.Antony Jeyasehar**,Dr.P.Valli***
More informationRegional IAM: analysis of riskadjusted costs and benefits of climate policies
Regional IAM: analysis of riskadjusted costs and benefits of climate policies Alexander Golub, The American University (Washington DC) Ramon Arigoni Ortiz, Anil Markandya (BC 3, Spain), Background Near-term
More informationEuropean Journal of Economic Studies, 2016, Vol.(17), Is. 3
Copyright 2016 by Academic Publishing House Researcher Published in the Russian Federation European Journal of Economic Studies Has been issued since 2012. ISSN: 2304-9669 E-ISSN: 2305-6282 Vol. 17, Is.
More informationInterest Rate Risk Management Using Economic Value Sensitivity Model
Interest Rate Risk Management Using Economic Value Sensitivity Model Georgi Petrov Georgiev 1 1 University of Agribusiness and Rural Development, Plovdiv, Bulgaria Abstract: The article discusses the practical
More informationMeasures of Central tendency
Elementary Statistics Measures of Central tendency By Prof. Mirza Manzoor Ahmad In statistics, a central tendency (or, more commonly, a measure of central tendency) is a central or typical value for a
More informationMeasuring Sustainability in the UN System of Environmental-Economic Accounting
Measuring Sustainability in the UN System of Environmental-Economic Accounting Kirk Hamilton April 2014 Grantham Research Institute on Climate Change and the Environment Working Paper No. 154 The Grantham
More informationMonetary Policy INSTRUMENTS AND INTERNATIONAL RESERVES MANAGEMENT MONETARY POLICY INSTRUMENTS AND INTERNATIONAL RESERVES MANAGEMENT
Monetary Policy INSTRUMENTS AND INTERNATIONAL RESERVES MANAGEMENT 2 MONETARY POLICY INSTRUMENTS AND INTERNATIONAL RESERVES MANAGEMENT MONETARY POLICY INSTRUMENTS AND INTERNATIONAL RESERVES MANAGEMENT
More informationRisk Analysis of ODOT s HMA Percent Within Limits (PWL) Specification
Risk Analysis of ODOT s HMA Percent Within Limits (PWL) Specification Final Report ODOT Item Number 2182 by William F. McTernan, Ph.D., P.E. Professor Oklahoma State University Stillwater, Oklahoma and
More informationRisk and Return and Portfolio Theory
Risk and Return and Portfolio Theory Intro: Last week we learned how to calculate cash flows, now we want to learn how to discount these cash flows. This will take the next several weeks. We know discount
More informationContents. An Overview of Statistical Applications CHAPTER 1. Contents (ix) Preface... (vii)
Contents (ix) Contents Preface... (vii) CHAPTER 1 An Overview of Statistical Applications 1.1 Introduction... 1 1. Probability Functions and Statistics... 1..1 Discrete versus Continuous Functions... 1..
More informationNetwork Analysis Basic Components. The Other View. Some Applications. Continued. Goal of Network Analysis. RK Jana
Network nalysis RK Jana asic omponents ollections of interconnected linear forms: Lines Intersections Regions (created by the partitioning of space by the lines) Planar (streets, all on same level, vertices
More informationPart V - Chance Variability
Part V - Chance Variability Dr. Joseph Brennan Math 148, BU Dr. Joseph Brennan (Math 148, BU) Part V - Chance Variability 1 / 78 Law of Averages In Chapter 13 we discussed the Kerrich coin-tossing experiment.
More informationWHY ARE PROJECTS ALWAYS LATE?
WHY ARE PROJECTS ALWAYS LATE? (what can the Project Manager DO about that?) Craig Henderson, MBA, PMP ARVEST Bank Operations Introduction PM Basics FIO GID KISS (Figure it out) (Get it done) (Keep it simple,
More informationEquity Valuation. Walid Saleh, Samer Yamin, and Ahmed Mashal
Global conomy & Finance Journal Vol.2 No.1 March 2009 Pp. 135-153 quity Valuation Walid Saleh, Samer Yamin, and Ahmed Mashal This paper conducted an empirical examination of two theoretically equivalent
More informationMeasuring and managing market risk June 2003
Page 1 of 8 Measuring and managing market risk June 2003 Investment management is largely concerned with risk management. In the management of the Petroleum Fund, considerable emphasis is therefore placed
More information3.2 Aids to decision making
3.2 Aids to decision making Decision trees One particular decision-making technique is to use a decision tree. A decision tree is a way of representing graphically the decision processes and their various
More information