Monetary and Non-Monetary Indicators of Cost-Benefit Analysis in Industrialised Building System Project: An Initial Conceptual Model

Abstract

Industrialised Building System (IBS) is known as a construction system that consists of a combination of components manufactured either on-site or off-site then positioned and assembled into structures. Among the benefits of IBS construction includes labour cost reduction, support desirable environment, maximize efficient use of resources and waste minimisation towards sustainable construction. However, Malaysian construction industry still has a low take-up rate on IBS construction. Hence, to promote the project’s viability via IBS, ideally, the benefits of IBS are more reliable to be presented in tangible (monetary) value and intangible (non-monetary) basis rather than descriptive benefits. Therefore, Cost-Benefit Analysis (CBA) can be used in order to identify the soft issue or non-direct cost and elicits more transparency in IBS projects. This paper presents the conceptual review of the fundamental theory of CBA on the measurement of cost and benefits that can be converted as a weighing impact for an IBS project. An initial conceptual model known as CBA-IBS model is proposed as an approach that a decision maker can use to find the balance between the amount of effort invested in the initial cost of IBS construction and the realised revenues This study concluded that CBA is able to highlight the viability of IBS for construction in more comprehensive criteria of monetary and non-monetary benefits. This paper is a review of previous studies on monetary and non-monetary indicators of CBA that suit with IBS project. The study is supported by existing literature, primarily in the most recent research, which supports the indicators of CBA. From the literature reviews, sets of monetary and non-monetary indicators of CBA that related to IBS is obtained. The result of this study will provide novel ideas to optimize sustainable construction and prolong sustainability in design, financial, buildability, operation, life-cycle and environmental aspects. CBA-IBS model will be introduced as a theoretical basis for decision-makers in adopting IBS for their construction projects.