Study on Cost Minimization including Opportunity Cost in Road Project

Abstract

This paper is to study about the way to minimize the total cost, including opportunity cost, of public works. The author compares the costs between of short-time high-construction-cost case and of long-time and low-construction-cost case, in an existed road construction project. The author also compares the costs between of daytime maintenance and of nighttime maintenance, in existed road maintenance.From these comparisons, the author finds out that in order to select minimum cost case it is necessary to 1) estimate the benefit from the project, 2) calculate the direct cost of the project and 3) forecast the duration of the project. In-house engineers have to select the best way with considering cost minimization including opportunity cost.