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1 – 10 of over 134000Roger G. Schroeder, Gary D. Scudder and Michael J. Pesch
The cost of materials has often been neglected by managers faced with the problem of reducing manufacturing costs. However, as direct labour, the classical cost reduction target…
Abstract
The cost of materials has often been neglected by managers faced with the problem of reducing manufacturing costs. However, as direct labour, the classical cost reduction target, is reduced by automation the task of reducing materials cost has become much more urgent. As a result of this pressure new approaches have been developed to address the reduction of materials costs. This article reviews and describes five such approaches.
Winston Shakantu, John E. Tookey and Paul A. Bowen
Construction is possibly one of the most cost orientated industries in any economy. The primary mode of supplier selection has always tended to be on the basis of lowest material…
Abstract
Construction is possibly one of the most cost orientated industries in any economy. The primary mode of supplier selection has always tended to be on the basis of lowest material or service cost at point of consumption. Indeed, this remains the case even in the post‐Latham (1994) and Egan (1998) world in which we live. In general, construction cost estimates are based on a straight ‘take off’ of the quantities required. All further ‘other’ costs in the form of overhead, profit, labour and wastage are consolidated into the cost of the materials. Construction is unique within the various industries making up a modern economy in that the bulk of the materials and components that it uses are of relatively low value while being of high volume. Consequently, a significant proportion of the ‘other’ costs associated with materials purchases must be in the form of transportation from the point of extraction and / or production to the point of consumption. This paper provides an overview of the hidden costs associated with the transportation of construction materials within the industry and proposes improved methods of managing the logistics of the construction process e.g. reverse logistics, in order to reduce costs and increase the basic sustainability of the construction process.
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Samuel Lindén and Per‐Erik Josephson
The purpose of this paper is to discover whether on‐site materials handling should be performed in‐house or out‐sourced. This is done by studying visible and hidden costs related…
Abstract
Purpose
The purpose of this paper is to discover whether on‐site materials handling should be performed in‐house or out‐sourced. This is done by studying visible and hidden costs related to materials handling and of the managers' awareness of these costs.
Design/methodology/approach
The data have been gathered through 15 interviews, a number of short discussions on construction sites, and direct observations on six occasions in four housing projects in Scandinavia.
Findings
Indirect and waste costs for materials handling on construction sites are unknown and are often underestimated during budgeting, planning, scheduling and organizing construction projects.
Practical implications
The short case‐studies indicate that the benefits of out‐sourcing on‐site materials handling outweigh the costs.
Originality/value
The solution for materials handling in practice studied in the paper is undergoing rapid development in Scandinavia.
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The construction industry can be characterised as a sector of the economy that uses planning, design, construction, maintenance and repair, and operation to transform various…
Abstract
The construction industry can be characterised as a sector of the economy that uses planning, design, construction, maintenance and repair, and operation to transform various resources into physical facilities in both developed and developing countries. Residential and non-residential structures, as well as heavy construction, are among the types of public and private facilities built, and these physical facilities play an important and visible part in the development process. Major participants in the construction industry include the design team (architects, engineers and quantity surveyors), management consultants, general contractors, heavy construction contractors, special trade contractors or subcontractors, and construction workers, as well as the owners, managers and users of the built facility. Building financing and insurance businesses, land developers, real estate agents and material and machinery suppliers and distributors, to name a few, are all involved in construction, yet they are categorised as independent but connected industries. Cost is a major factor that affects and determine the choice and engagement of these processes and stakeholders, and the same has been a measure of project success from the time immemorial.
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Oluwole Alfred Olatunji, Adenike Omolabake Orundami and Oluwatomi Ogundare
A section of project management literature attributes overruns to estimators’ deceit and delusion. An example of this is Flyvbjerg’s theorisation of strategic misrepresentation…
Abstract
Purpose
A section of project management literature attributes overruns to estimators’ deceit and delusion. An example of this is Flyvbjerg’s theorisation of strategic misrepresentation and optimism bias. To show that such a notion is not true entirely, the study elicits evidence relating to how costs of projects often fluctuate erratically as prices of construction materials change throughout contract cycle times. The purpose of this paper is to examine the causal relationships between persistent changes in prices of construction materials and project’s outturn costs.
Design/methodology/approach
The authors obtained and analysed price data of construction materials published in a Nigerian national daily in the 16 years between 2000 and 2015. Additional data were obtained from a quantity surveying firm to validate the archival data on material prices, and to compare the firm’s robust database of project estimates and the corresponding outturn costs of specific building elements (detailed in the study). The goal of the analysis is to explore spontaneity and causal impact in the relationship between changes in prices of construction materials and project costs. Kolmogorov-Smirnov and Anderson-Darling tests were used to obtain the probability distributions of the causal relationships.
Findings
Findings show disproportionate positive correlations between changes in material prices and outturn costs in Nigeria. An important dimension to this, however, is that although fluctuations in material costs often trigger variations to project costs, outturn price only accounts for about one-third of actual cost variability. Recovery of costs, not least profit making, under these conditions is a complex process.
Originality/value
This paper concludes that dynamism in cost attributes is neither a deceit nor a delusion; understanding and tolerating them is not a systemic weakness, rather an essential key to project success and stakeholder satisfaction. Findings from the study also bring measured certainties to the transformation of variable costs into fixed price outcomes, an important consideration that will help contract estimators and project managers to understand the likelihood of fluctuation in material costs and how these might trigger variability in project costs.
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John Gattorna, Abby Day and John Hargreaves
Key components of the logistics mix are described in an effort tocreate an understanding of the total logistics concept. Chapters includean introduction to logistics; the…
Abstract
Key components of the logistics mix are described in an effort to create an understanding of the total logistics concept. Chapters include an introduction to logistics; the strategic role of logistics, customer service levels, channel relationships, facilities location, transport, inventory management, materials handling, interface with production, purchasing and materials management, estimating demand, order processing, systems performance, leadership and team building, business resource management.
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Sees the objective of teaching financial management to be to helpmanagers and potential managers to make sensible investment andfinancing decisions. Acknowledges that financial…
Abstract
Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.
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Helena Moussatche and Jennifer Languell
The tight schedule of developing, designing, and managing educational facilities limits the time and resources needed to correctly assess the full cost of building materials. As a…
Abstract
The tight schedule of developing, designing, and managing educational facilities limits the time and resources needed to correctly assess the full cost of building materials. As a result, the selection of interior finishing materials is commonly driven solely by initial cost. This study evaluates interior floor materials currently available for use in K‐12 educational facilities in the State of Florida. The range of materials chosen for the comparison encompasses common flooring materials installed over appropriate sub‐floor materials. The flooring alternatives are evaluated using a service life‐cycle cost (LCC) analysis based on the 50‐year service life specified by the Florida Department of Education. A net present worth (NPW) analysis that includes initial costs, operation and maintenance costs, and replacement costs of each selection is used to evaluate the materials. Interior floorings initial cost, replacement cost, service life, and operations and maintenance costs are compared to the materials resulting LCC.
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Hessa Almatroushi, Moncer Hariga, Rami As'ad and AbdulRahman Al-Bar
This paper proposes an integrated approach that seeks to jointly optimize project scheduling and material lot sizing decisions for time-constrained project scheduling problems.
Abstract
Purpose
This paper proposes an integrated approach that seeks to jointly optimize project scheduling and material lot sizing decisions for time-constrained project scheduling problems.
Design/methodology/approach
A mixed integer linear programming model is devised, which utilizes the splitting of noncritical activities as a mean toward leveling the renewable resources. The developed model minimizes renewable resources leveling costs along with consumable resources related costs, and it is solved using IBM ILOG CPLEX optimization package. A hybrid metaheuristic procedure is also proposed to efficiently solve the model for larger projects with complex networks structure.
Findings
The results confirmed the significance of the integrated approach as both the project schedule and the material ordering policy turned out to be different once compared to the sequential approach under same parameter settings. Furthermore, the integrated approach resulted in substantial total costs reduction for low values of the acquiring and releasing costs of the renewable resources. Computational experiments conducted over 240 test instances of various sizes, and complexities illustrate the efficiency of the proposed metaheuristic approach as it yields solutions that are on average 1.14% away from the optimal ones.
Practical implications
This work highlights the necessity of having project managers address project scheduling and materials lot sizing decisions concurrently, rather than sequentially, to better level resources and minimize materials related costs. Significant cost savings were generated through the developed model despite the use of a small-scale example which illustrates the great potential that the integrated approach has in real life projects. For real life projects with complex network topology, practitioners are advised to make use of the developed metaheuristic procedure due to its superior time efficiency as compared to exact solution methods.
Originality/value
The sequential approach, wherein a project schedule is established first followed by allocating the needed resources, is proven to yield a nonoptimized project schedule and materials ordering policy, leading to an increase in the project's total cost. The integrated approach proposed hereafter optimizes both decisions at once ensuring the timely completion of the project at the least possible cost. The proposed metaheuristic approach provides a viable alternative to exact solution methods especially for larger projects.
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Zeerak Waryam Sajid, Shayan Ali Khan, Fazal Hussain, Fahim Ullah, Rao Arsalan Khushnood and Nancy Soliman
Infill materials play a pivotal role in determining buildings’ life cycle costing (LCC) and environmental impacts. International standards prescribe LCC and life cycle assessments…
Abstract
Purpose
Infill materials play a pivotal role in determining buildings’ life cycle costing (LCC) and environmental impacts. International standards prescribe LCC and life cycle assessments (LCA) to assess materials’ economic and environmental sustainability. The existing methods of LCC and LCA are tedious and time-consuming, reducing their practical application. This study sought to integrate LCC and LCA with building information modeling (BIM) to develop a swift and efficient approach for evaluating the life cycle performance of infill materials.
Design/methodology/approach
The BIM model for a case study was prepared using Autodesk Revit®, and the study included four infill materials (lightweight aggregate concrete block (LECA), autoclaved cellular concrete (AAC), concrete masonry and bricks). LCC was conducted using Revit® and Autodesk Insight 360® to estimate costs incurred across different project phases. LCA was conducted using “One Click LCA®,” a BIM-based platform featuring a comprehensive material inventory. Carbon emissions, acidification, and eutrophication were chosen as environmental impact factors for LCA.
Findings
LECA was the preferred choice due to its lower cost and environmental impact. Its lifetime cost of $440,618 was 5.4% lower than bricks’, with 2.8% lower CO2 emissions than AAC’s, which were second-place options, respectively. LECA had 6.4 and 27% lower costs than concrete blocks, and AAC’s carbon emissions were 32 and 58% lower than concrete blocks and bricks, respectively.
Originality/value
BIM has been employed for life cycle analysis in existing literature, but its efficacy in evaluating the lifetime costs and environmental impacts of infill materials remains unexplored. The current study presents a BIM-based approach for conducting LCC and LCA of infill materials, facilitating informed decision-making during the planning phase and promoting sustainable construction practices.
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