Authors :
Adnan Fadjar
Volume/Issue :
Volume 8 - 2023, Issue 4 - April
Google Scholar :
https://bit.ly/3TmGbDi
Scribd :
https://bit.ly/3VojXC3
DOI :
https://doi.org/10.5281/zenodo.7889054
Abstract :
Cost risk in a residential construction project
is one of the risks developers have to cope with. It is not
unusual that the developer allocated a budget lower than
what is needed to complete the project. This study aims
to provide a practical way to estimate a more realistic
cost of a construction project using the Monte Carlo
Simulation method. A typical house type 36 construction
activities and their respective costs were simulated with
5000 iterations to obtain the probability density function
and the cumulative density function of the project cost.
The study found that to avoid cost underestimation,
which is a primary reason for cost overrun, the budget
should be increased by 8.38% to attain a 95%
probability of the project's successful completion.
Keywords :
Monte Carlo Simulation; Residential Building; Cost Overrun.
Cost risk in a residential construction project
is one of the risks developers have to cope with. It is not
unusual that the developer allocated a budget lower than
what is needed to complete the project. This study aims
to provide a practical way to estimate a more realistic
cost of a construction project using the Monte Carlo
Simulation method. A typical house type 36 construction
activities and their respective costs were simulated with
5000 iterations to obtain the probability density function
and the cumulative density function of the project cost.
The study found that to avoid cost underestimation,
which is a primary reason for cost overrun, the budget
should be increased by 8.38% to attain a 95%
probability of the project's successful completion.
Keywords :
Monte Carlo Simulation; Residential Building; Cost Overrun.
