PurposeThe research aims to analyze the effects of financial policies on a cash flow system to meet project performance goals and improve profitability. The policies are divided into four groups; owner related, bank-related, labor-related and supplier-related policies. This research presents a developed model for planning, forecasting and managing the cash flow in construction projects using system dynamics (SD).Design/methodology/approachA System Dynamics (SD model is developed to evaluate the effect of different financial policies on construction project performance. By identifying the feedback loops in the cash flow system, a dynamic model is developed to forecast, plan and manage different policies, including prepayment, overbilling, loans, incentive payment, delay in payment and equipment lease.FindingsA case study (a construction activity as part of a pharmaceutical factory development project) is used to analyze the cash flow and financing policies. The findings demonstrate the effects of different policies such as incentive payments on project cash flow estimation, which proved to reduce the project duration, improve the profit and increase the financing during the project execution.Originality/valueThe presented model would be a major attempt to estimate precisely the cash flow and the effect of employing different financial policies on project performance. Applying this model, project managers and decision-makers have the opportunity to model different financial policies concerning a variety of limiting variables applicable to each situation. Ultimately, with this, one can make more reasoned decisions and, in effect, optimize the utility of the project.

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Purpose The purpose of this paper is to assess different labor hiring policies for construction projects using system dynamics (SD) which have a considerable impact on project performance. Time intervals and work crew composition are two such policies. Through the implementation of a variety of policies, a managerial opportunity presents itself for the effective allocation of human resources and improvement in project performance. Design/methodology/approach The study developed a dynamic model to assess different labor hiring policies using SD based on literature. To further distinguish between findings, the effects of the applied policies on performance were considered using earned value management. Based on a real case for validating the model, the paper discusses the potential benefits of the model, including: having a systematic and holistic view, considering dynamic the labor need and allocation, identifying alternative strategies for performance improvement and simulating the reality of the projects in a virtual model. Findings The achieved simulation results show how different hiring policies affect project performance. This research model can aid decision makers to assess labor hiring policies in various time intervals with different compositions and assist them in selecting the best policies for effective implementation of project. Originality/value The proposed model would be a major attempt using SD to model labor hiring policies more accurate in construction projects performance. In fact, an accurate estimate of labor needed, along with the proper planning and implementing of various labor hiring policies, presents a managerial opportunity whereby the effective allocation of workforces can be optimized leading to drastic improvement in project performance.

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