FORECASTING THE COURSE OF CUMULATIVE COST CURVES FOR DIFFERENT CONSTRUCTION PROJECTS

Abstract

Planning the course of cumulative cost curves and effectively monitoring the implementation process and the incurred financial outlays are still significant problems in the management of construction projects. This is particularly noticeable during the execution phase of construction works. Therefore, it is worthwhile to correctly determine the shape of the cost curve before starting this stage and to periodically examine its fitting to the scheduled course of the budgeted cost curve, the envelope of cost curves characterised by the best-fit curve. There are many methods of forecasting and estimating the costs of construction works, but they are very often complicated and require the decision-maker to use and elaborate mathematical tools. The aim of the research was to determine the shape and course of the cost curves for selected construction projects. Based on the analysis of the collected data on investment projects in 3 facilities research groups (collective housing, hotels and retail service facilities), an original attempt was made to determine the best fit curve and the area of the curve, which in turn indicates the limits of the correct planning of the cumulative costs of construction projects. The Three Sigma rule was applied, correlations and determinants were determined, and the area of the cost curves was described with a third degree polynomial. The conducted research showed that: 1. the optimal formula for determining the best-fit curve, which allow to determine the cost and time of construction works, is a 3-degree polynomial; 2. cost curves, within a certain bounding box, determine the area of the most likely cash flow; 3. when planning the course of a cost curve, it is advisable to use the bounding box of cost curves rather than a single, model, theoretical, or empirical mathematical expression describing the cost curve.