Framework for target cost modelling in construction projects

ABSTRACT

Target costing (TC) is an effective construction management technique that has been proven to enhance project performance through the evaluation of construction component alternatives that satisfy a desired cost. However, current research focusing on the adoption of TC in the construction industry still follows a manual, time-consuming process. Improvement measures are heuristic and rely on the intuition of designers. This paper proposes a systematic framework, called target cost modeling (TCMd), for the application of TC in the construction industry to automatically generate a detailed project estimate based on a set of client requirements and a desired cost. It uses a three-level database to collect project data and generate a set of available alternatives. Value and compatibility studies govern the process of selecting among alternatives, and mathematical costing models calculate the cost accordingly. Finally, alternative value analysis improves the project value through the use of an optimization method, simulated annealing. TCMd is expected to efficiently improve project performance and enhance the design process while meeting a desired overall cost.

KEYWORDS:

• Target costing
• cost estimating
• regression analysis
• simulated annealing optimization

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

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Additional information

Funding

This work was supported by the Natural Sciences and Engineering Research Council of Canada [grant number RES0022989].