A new framework for time-cost trade-off considering float loss impact

Purpose The purpose of this paper is to propose a new framework for time–cost trade-off. The new framework provides the optimum time–cost value taking into account the float loss impact. Design/methodology/approach The stochastic framework uses Monte Carlo Simulation to calculate the effect of float...

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Bibliographic Details
Published in:Journal of financial management of property and construction 2017-01, Vol.22 (1), p.20-36
Main Authors: El-Sayegh, Sameh Monir, Al-Haj, Rana
Format: Article
Language:English
Subjects:
Computer simulation
Construction industry
Cost control
Critical path
Discounted cash flow
Fuzzy sets
Heuristic
Integer programming
Linear programming
Methods
Monte Carlo simulation
Optimization
Optimization techniques
PERT
Probabilistic methods
Probability
Project management
Researchers
Risk
Schedules
Stochastic control theory
Tradeoffs
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Summary:Purpose The purpose of this paper is to propose a new framework for time–cost trade-off. The new framework provides the optimum time–cost value taking into account the float loss impact. Design/methodology/approach The stochastic framework uses Monte Carlo Simulation to calculate the effect of float loss on risk. This is later translated into an added cost to the trade-off problem. Five examples, from literature, are solved using the proposed framework to test the applicability of the developed framework. Findings The results confirmed the research hypothesis that the new optimum solution will be at a higher duration and cost but at a lower risk compared to traditional methods. The probabilities of finishing the project on time using the developed framework in all five cases were better than those using the classical deterministic optimization technique. Originality/value The objective of time–cost trade-off is to determine the optimum project duration corresponding to the minimum total cost. Time–cost trade-off techniques result in reducing the available float for noncritical activities and thus increasing the schedule risks. Existing deterministic optimization technique does not consider the impact of the float loss within the noncritical activities when the project duration is being crashed. The new framework allows project managers to exercise new trade-offs between time, cost and risk which will ultimately improve the chances of achieving project objectives.
ISSN:1366-4387
1759-8443
DOI:10.1108/JFMPC-02-2016-0007