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An Analysis of the Impacts of Risks and Uncertainties on Construction Cash Flow Forecast

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Odeyinka, Henry and Lowe, John (2001) An Analysis of the Impacts of Risks and Uncertainties on Construction Cash Flow Forecast. In: RICS COBRA Conference, Glasgow Caledonian University, Glasgow, UK. Royal Institution of Chartered Surveyors (RICS). Vol 1 (1) 11 pp. [Conference contribution]

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Abstract

Various attempts have been made to model construction cash flow. However, in spite ofthese efforts, significant variations between the modelled cash flow profiles and the actualwere observable. In previous research by the authors (Odeyinka and Lowe, 2000), it wasfound that the variations were due to uncertainties and risk factors inherent inconstruction cash flow forecast. This complementary study attempts to analyse theimpacts of the identified risk factors on construction cash flow forecast. The study wasconducted through a questionnaire survey of small, medium and large-scale constructioncontractors. Responses were analysed using 'mean response' analysis and univariateanalysis of variance (ANOVA). The results showed that most of the risk factors withcritical impacts on cash flow forecast relate to contractors' cash inflow, change in thedesign or specification and construction programming. Results also indicated that somerisk factors such as 'problems with the foundations' and 'inclement weather' were found toassume more critical impacts than others in certain project situations. The implication ofthis is that the knowledge of such situations as well as the awareness of the possibleimpacts of the risk factors occurring therein will provide suitable information forconstruction practitioners to proactively manage the identified risks.

Item Type:Conference contribution (Paper)
Keywords:Construction cash flow, contractor, mean response analysis, risk, uncertainty
Faculties and Schools:Faculty of Art, Design and the Built Environment
Faculty of Art, Design and the Built Environment > School of the Built Environment
Research Institutes and Groups:Built Environment Research Institute
Built Environment Research Institute > Centre for Sustainable Technologies (CST)
ID Code:13817
Deposited By:Dr Henry Odeyinka
Deposited On:20 May 2010 13:24
Last Modified:20 May 2010 13:24

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