Simplified Approach to Probabilistic Cost Benefit Analysis: Architectural Lighting Example

Cost benefit analysis is a well established technique for assessing the economic viability of projects and other endeavors. With the increased focus on efficiency, the use of cost benefit analysis has grown significantly across various disciplines. Several software tools have been developed specific...

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Bibliographic Details
Published in:Cost engineering (Morgantown, W. Va.) W. Va.), 2006-01, Vol.48 (1), p.13
Main Authors: Nassar, Khaled, Al-Mohaisen, Abdullah
Format: Article
Language:English
Subjects:
Capital costs
Cost benefit analysis
Cost control
Design
Designers
Energy
Lighting
Load
Monte Carlo simulation
Probability distribution
Project management
Random variables
Risk
Software utilities
Spreadsheets
Uncertainty
Variables
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Summary:Cost benefit analysis is a well established technique for assessing the economic viability of projects and other endeavors. With the increased focus on efficiency, the use of cost benefit analysis has grown significantly across various disciplines. Several software tools have been developed specifically for professionals wanting to use that technique. Consequently, probabilistic cost benefit analysis has also gained some ground as a tool that can handle uncertainty and risk. However, most of the existing software tools can be too complex and require a considerable amount of time and effort to learn and use. The aim of this article is to describe a practical simple approach to perform probability cost benefit (CB) analysis using spreadsheets. Unlike other software which are "black-box" tools, spreadsheets offer a transparent view of the steps and mechanics of probabilistic cost benefit analysis. After reading this article, the reader should be able to understand what CB analysis entails, as well as know how to set up and perform a probabilistic CB analysis for various applications using spreadsheets. The expediency of spreadsheets is demonstrated through an example application concerning architectural day-lighting design decisions. A practical probabilistic cost/benefit analysis approach using a spreadsheet was developed and presented here. The benefits of the developed spreadsheet method are explored through an actual case-study of a daylight cost/benefit analysis for a hospital project in Kuwait city. [PUBLICATION ABSTRACT]
ISSN:0274-9696