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The degree of accuracy and factors that influence the uncertainty of SME cost estimates

Published on Apr 30, 2018in The international journal of construction management
· DOI :10.1080/15623599.2018.1452094
George Agyekum Mensah (Coventry University)
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Abstract
ABSTRACTThe study examines the degree of accuracy and factors that influence the uncertainty of cost estimates. A critical review of literature conducted and was followed with two SMEs case studies executing four projects for different clients. The data collection methods used were documental review, observations and interviews. A total of 12 interviews were conducted and analysed using qualitative thematic analysis. The findings reveal an unquantifiable average cost drift or inflated risks of 19% in cost estimates which is significant as compared to other studies. Ten main factors were identified as the influential factors to the uncertainty of cost estimates, which included type of client, terms and conditions of payments, availability of cost information, experience, repeated work and guarantee of the job. This study contributes to existing literature and it reveals that in the UK post-2008 era, cost of construction remains higher and it could be reduced.
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References38
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Albert P.C. Chan40
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+ 1 AuthorsEkow Coleman1
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Estimated H-index: 2
(UiTM: Universiti Teknologi MARA),
Zulkiflee Abdul-Samad4
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(UM: University of Malaya)
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Published on Nov 2, 2012in Structural Survey
George Agyekum-Mensah2
Estimated H-index: 2
(NTU: Nottingham Trent University),
Andrew Knight4
Estimated H-index: 4
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Christopher Coffey1
Estimated H-index: 1
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Tien-Choon Toh1
Estimated H-index: 1
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Connie Ting1
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+ 2 AuthorsOmar Munir1
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Abstract The objective of this study is to determine the critical cost factors of building construction projects. Survey data are randomly collected from building contractors in the Klang Valley, Malaysia. Each respondent is asked to assign a one-to-five rating for each of the 79 cost factors identified from the literature review. Priority ranking of these factors shows that only 35 cost factors are regarded by the respondents working for the small, medium and large construction companies in the...
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Formal and analytical risk models prescribe how risk should be incorporated into construction bids. However, the actual process of how contractors and their clients negotiate and agree to price is complex and not clearly articulated in the literature. With participant observation, the entire tender process was shadowed in two leading U.K. construction firms. This was compared with propositions in analytical models, and significant differences were found. A total of 670 h of work observed in both...
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Linda Whicker5
Estimated H-index: 5
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+ 1 AuthorsCarlos Mena16
Estimated H-index: 16
(Cranfield University)
In today's global competitive market, the total cost of sourcing, manufacturing and delivery of products is a major driver of competitive advantage. However, the true cost of operations in many organisations is often unclear or misleading because supply chain processes transcend both functional and company boundaries and the limitations associated with traditional cost reporting systems. Some cost-based approaches have been developed to address these issues but they tend to focus on the traditio...
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Estimated H-index: 7
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Estimated H-index: 14
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Formal and analytical models that contractors can use to assess and price project risk at the tender stage have proliferated in recent years. However, they are rarely used in practice. Introducing more models would, therefore, not necessarily help. A better understanding is needed of how contractors arrive at a bid price in practice, and how, and in what circumstances, risk apportionment actually influences pricing levels. More than 60 proposed risk models for contractors that are published in j...
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Published on Jun 25, 2019in Advances in Civil Engineering
Meseret Getnet Meharie (Adama University), Zachary C. Abiero Gariy1
Estimated H-index: 1
(JKUAT: Jomo Kenyatta University of Agriculture and Technology)
+ 1 AuthorsWubshet Jekale Mengesha (AAU: Addis Ababa University)
Accurate cost estimates are vital to the effective realisation of construction projects. Extended knowledge, wide-ranging information, substantial expertise, and continuous improvement are required to attain accurate cost estimation. Cost estimation at the preliminary phase of the project is always a challenge as only limited information is available. Hence, rational selection of input variables for preliminary cost estimation could be imperative. A systematic input variable selection approach f...