A Decision Support Model for Construction Cash Flow Management

Khosrowshahi, Farzad; Kaka, Ammar Peter

doi:10.1111/j.1467-8667.2007.00508.x

Cited by 40 publications

(28 citation statements)

References 21 publications

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“…Once a forecast is generated, the analysts can use their general experience to improve the forecast. Also, they can use their knowledge about the program to further refine the forecast (Khosrowshahi and Kaka 2007;Odeyinkal and Lowe 2000).…”

Section: Forecast Models For Actual Construction Time and Costmentioning

confidence: 99%

Mathematical Methods—Statistics and Forecasting

Haidar

2015

Construction Program Management – Decision Making and Optimization Techniques

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Given the improvement of data available, advanced modeling techniques, and computer programs, the design, construction, and the delivery of programs are likely to be more accessible with improved accuracy at every level of the program. This chapter will provide an introduction for statistics applications and forecasting methods to familiarize program managers with their applications as they have been proven applicable and apprehendable for various aspects of a program delivery. Statistics with its wide scope is a very relevant tool for program management. It is concerned with scientific methods for collecting, organizing, summarizing, presenting, and analyzing data as well as with drawing valid conclusions and making reasonable decisions on the basis of such analysis. In a narrower sense, the term statistics is used to denote the data themselves or numbers derived from the data. A forecast is a prediction, projection, or estimate of some future activity, event, or occurrence. When historical data are available, some proven statistical forecasting methods have been developed for using these data to forecast future demand. Such a method assumes that historical trends will continue, so management then needs to make any adjustments to reflect current changes in the construction industry and the management of programs. Statistics AnalysisStatistics appertaining to program management involves finding out the best sample and populations required to solve a wide range of problems. Thus, we speak of recruitment and employment statistics, on-site accident statistics and statistics related to types of construction, leverage risk provisions, and forecasting statistics analysis.Programs are large and in many cases involve huge data. A program involving 400 schools in a developed country will involve mega studies related to the number of students per year, the age of the students, and the demographic distribution of the students which will involve the design, the size, and the type of schools. Then, it is

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Section: Forecast Models For Actual Construction Time and Costmentioning

confidence: 99%

Mathematical Methods—Statistics and Forecasting

Haidar

2015

Construction Program Management – Decision Making and Optimization Techniques

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“…In construction industry, data related to cost are collected periodically in various phases of the project; thus, many factors of interest in construction lend themselves to time series behaviour (Khosrowshahi, Kaka 2007). It is obvious that during the project execution, data recorded more recently could provide more information for the decision makers.…”

Section: Adaptive Time-dependent Least Squares Support Vector Machinementioning

confidence: 99%

“…In project management, cash is a critical factor that imposes significant influence on project profitability (Hwee, Tiong 2002;Jiang et al 2011). Poor cash flow control can lead to project failure for contractors due to liquidity shortage for supporting their daily activities (Khosrowshahi, Kaka 2007). Hence, reliable cash flow prediction over various phases of a project is desirable since it puts the project manager in a better position to identify potential financial problems and to develop appropriate strategies to mitigate the negative effects of such problems on the project success (Hwang, Liu 2005).…”

Section: Introductionmentioning

confidence: 99%

Cash Flow Prediction for Construction Project Using a Novel Adaptive Time-Dependent Least Squares Support Vector Machine Inference Model

Cheng

Hoang

2015

Journal of Civil Engineering and Management

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Cash flow information is crucial for the decision making process in construction management. Due to the complexity and the dynamic progress of a construction project, forecasting cash flow demand throughout various phases of the project remains a challenging problem. This article presents a novel inference model, named as Adaptive Timedependent Least Squares Support Vector Machine (LS-SVM AT ) for cash flow prediction. In the LS-SVM AT , Least Squares Support Vector Machine (LS-SVM) is integrated with an adaptive time function (ATF) to generalize the inputoutput mapping of cash flow. Since cash flow data are time-dependent, data points recorded in different periods can contribute dissimilarly to the training process of the prediction model. Thus, the role of the ATF is to determine the appropriate weight associated with each data point at a specific time period. By doing so, LS-SVM AT can better deal with the dynamic nature of the time series. Furthermore, to identify the optimal parameters for the inference model, Differential Evolution (DE) based cross validation process is utilized in this research. Comparing to other benchmark methods, the proposed model has identified the most appropriate time function and has yielded superior forecasting results. Therefore, LS-SVM AT can be a promising tool for construction managers in cash flow prediction.

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“…Ammar (2011) developed a nonlinear mathematical optimization model to deal with time-cost tradeoff problems for construction projects, which minimizes project direct cost and takes into account discounted cash flows. A decision support approach for cash flow management was used to forecast and manage project cash flows (Khosrowshahi, Kaka 2007). Scholars utilized a systemic analysis for project cash flows to provide prediction of cash flows and to improve overdraft financing requirements and profitability (Cui et al 2010).…”

Section: Disbursement and Financing Of Construction Projectsmentioning

confidence: 99%

Contractor Costs of Factoring Account Receivables for a Construction Project / Rangovo Sąnaudos, Statybų Projekto Gautinas Sumas Perdavus Faktoringo Įmonei

Chen

2012

Journal of Civil Engineering and Management

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Abstract. Literature reveals that approximately 66% of construction project funds are raised from financial institutions. The burden of capital costs on contractors is heavy and financial alternatives for the reduction of capital costs are always desired. The objective of this study is to derive a mathematical way of defining the contractor's costs for factoring account receivables, which is a form of commercial finance whereby a business sells its account receivables at a discount. Factoring can be thus considered as a contractor selling his/her accounts receivable to a factor, a financial institution that provides the services of financing, credit management, and collection. Nevertheless, factoring has far not been used for construction project financing. The relevant literature, empirical practices, and factoring theories from outside the construction industry are all evaluated and the features needed to derive the cost function are explored and integrated. This includes commission costs, expected debt costs, and credit monitoring costs. The case study is utilized and discussed to illustrate the use of factoring for a construction project and its related costs. Under the given assumptions that represent the most common financial conditions in Taiwan, the simulation results show that the contractor's factoring costs without recourse for the construction project make up only 0.8% of the total costs of the examined project which is relatively lower than that of most traditional financing. In addition, the application of factoring has the advantage of facilitating financial management, instantly improving cash flow, enhancement of investment efficiency, avoiding extra loan procedures, improving credit rating, and transfer of financial risk. Factoring is indeed a feasible financial tool for construction projects.

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A Decision Support Model for Construction Cash Flow Management

Cited by 40 publications

References 21 publications

Mathematical Methods—Statistics and Forecasting

Mathematical Methods—Statistics and Forecasting

Cash Flow Prediction for Construction Project Using a Novel Adaptive Time-Dependent Least Squares Support Vector Machine Inference Model

Contractor Costs of Factoring Account Receivables for a Construction Project / Rangovo Sąnaudos, Statybų Projekto Gautinas Sumas Perdavus Faktoringo Įmonei

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