Premium
Re: Influence of Rate Stability on Project Cost Simulation
Author(s) -
Wang ChingHwang,
Lee WeiHsien,
Huang YuChun
Publication year - 2008
Publication title -
computer‐aided civil and infrastructure engineering
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.773
H-Index - 82
eISSN - 1467-8667
pISSN - 1093-9687
DOI - 10.1111/j.1467-8667.2007.00520.x
Subject(s) - stability (learning theory) , variance (accounting) , range (aeronautics) , cost estimate , computer science , mathematical optimization , control theory (sociology) , mathematics , engineering , economics , accounting , systems engineering , control (management) , machine learning , artificial intelligence , aerospace engineering
Abstract: The rate stability has significant influence on project cost variance and should be taken into consideration when operating simulations on cost estimation. This, however, has been largely neglected by most previous studies. The rate stability, the main issue of this article, is the phenomenon that the rate vibrates in a fairly narrow range. Compared with the fluctuation of the rate, the continuous vibration can be deemed as a constant rate on the time axis. A lack of awareness of the rate stability results in the inaccurate estimate of project cost variance. To tackle this problem, the multi‐interval cost rate model, MICOR, is proposed to explicitly evaluate the variation due to the rate stability of the project cost. Furthermore, a new simulation mechanism, which effortlessly integrates the rate stability into the simulations of the construction project's cost, is designed to facilitate the MICOR after the theoretical feasibility of the MICOR is analytically verified. This article indicates that the rate stability does influence the project cost variation significantly and should be involved in the stimulations for the cost estimate of a construction project.