An integrated DEMATEL and system dynamic model for project cost prediction

Abstract

Actual cost fluctuations in construction projects are common in the construction industry, including the Kingdom of Saudi Arabia (KSA). This study's objective is to establish a simulation forecasting model for Saudi projects' cost changes that will be used to anticipate the actual cost spent at the project's end. It also indicates if there are cost overruns or savings by considering ten identified cost-risk impact factors. The study involves a systematic, integrated approach to developing system dynamics (SD) to reflect the ten cost overrun impact factors (COICs) in the KSA construction industry. Thus, the Decision-Making Trial and Evaluation Laboratory (DEMATEL) technique aids in evolving a Causal Loop Diagram (CLD) in the SD modeling stages. After performing the consistency and extreme tests, the model is verified by being applied in two case studies (an academic building and an infrastructure project) in Riyadh City, KSA. The main findings reveal that the model provided cost savings for the first and second case studies of 4.8% and 3.76%, respectively. Different experts have evaluated the developed dynamic system. According to the experts who support the developed model, the model is applicable if the contractor has a reasonable profit margin. In contrast, opponents' experts noted that the system still generates a profit margin despite change orders and project delays. The main conclusion that the experts recognize is that the approach successfully considered the relationships between the influencing factors. The findings can be utilized to create an integrated conceptual framework for construction management, which could result in a rapid and profitable project launch.

Keywords

• Forecast
• Actual cost
• Overrun
• Earned value
• System dynamic
• DEMATEL