Browsing by Subject "Value analysis (Cost control)"

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A risk-based approach to modeling life-cycle costs associated with warranty specifications for transportation infrastructure
(2006) Damnjanovic, Ivan; Zhang, Zhanmin
To improve quality and reduce the overall costs, in recent years, many state highway agencies have started investigating innovative contracting methods, such as performance-based warranty contracting. This contracting method is structured to shift the performance-related risk from the agency to the contractor, by means of warranty provision. Even though the application of performance-based warranty contracting methods allows for a “win-win” situation, where agencies hedge the performance-related risk, and contractors have more flexibility in the design and construction processes, there are many concerns with its implementation. One of the most important concerns is how to quantify the risk cost. This dissertation is focused on the development of a robust and flexible methodological framework for quantifying the risk cost associated with warranty specifications for transportation infrastructure. The key components of this framework for studying performance warranties include: characterization of the warranty systems, development of probabilistic performance models based on the method of moments, formulation of the risk cost quantification models, and formulation of the models for determining the optimal design strategy and maintenance schedule. In this dissertation, three types of warranty systems are characterized and elaborated upon in detail: short-term, long-term, and maintenance performance warranties. To test the accuracy of the method of moments for developing reliability functions, the current AASHTO method for design of pavements is employed to provide a case study. The results from the comparison analysis of the methods of moments with Monte Carlo simulation indicate that the method of moments yields accurate predictions of the failure probabilities; in general, the quality of estimation improves as the order of the central moments in reliability indices increases. Finally, the methodology is illustrated with numerical examples to show that models for quantifying the risk cost associated with warranty specifications can be developed.
Selecting value management processes for implementation on capital facility projects
(2003-12) Cha, Hee Sung; O'Connor, James Thomas
A variety of innovative management processes, which are also interchangeably termed as best practices, value enhancing practices, and value management, are increasingly being introduced into capital facility projects, thereby causing among project stakeholders great concern about which process to implement on a particular project. Furthermore, it is nontrivial to identify the most effective one or more of these management processes because varying circumstances on each project determine their levels of suitability. Forty-four Value Management Processes (VMPs), defined as unique, yet optional management processes, were adopted from a rigorous screening process conducted by Construction Industry Institute (CII) Project Team (PT) 184. Each VMP is significantly beneficial for capital facility projects to proactively achieve one or more articulated Project Value Objectives (PVOs), including security/safety, cost efficiency, quality, schedule optimization, or risk containment. This dissertation details a systematic approach to determining the best one or more VMPs from among the established 44 VMPs for a particular project. Each of the 44 VMPs was characterized in terms of targeted primary benefit(s), timing of initiation, project characteristics, and relative VMP impact. Throughout this dissertation, the detailed research methodology and the research findings from both industry surveys and VMP expert inputs are illustrated. The resulting computerized selection tool, programmed with Visual Basic Application (VBA) on Microsoft ExcelTM, is described, and its validation results and findings are also discussed. As a pioneering study, this dissertation contributes to a growing area of research not only by providing comprehensive and structured compilation of VMPs but also by developing a new selection method to effectively elicit the most beneficial VMPs. From the perspective of industry, the results of this research, especially the computerized Selection Tool, facilitate the implementation of the VMPs and should help in maximizing the potential benefits to a particular project.