• Korean Journal of Construction Engineering and Management
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• v.8 no.2
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• pp.84-92
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• 2007

To reduce uncertainties and make rational plans, the presumption of contingency against a failure of projects and an occurrence of unpredictable risks is important with accurate estimations as the work progressing. Therefore, if the presumption of contingency reflecting uncertainties carries out at a decision making point of time, be able to prepare for risks. The purpose of this paper is to present a management process of contingency through the performance analysis of project. In the cost planning phase, this study offers a process which is predictable contingency and predicts the range of fluctuation of the cost, laking an advantage of EVM in construction phase. With reflecting the results from this procedure, this study presents a process, rationally manageable contingency.

• Korean Journal of Construction Engineering and Management
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• v.20 no.5
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• pp.125-136
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• 2019

This study investigated checked risk level before bid, actual risk level after award, contingency, and cost growth rate in the 124 international construction projects executed by Korean major companies. This study conducted comparative analysis by product type using rank analysis, ANOVA and correlation analysis. As a result, plant and civil projects have worse risk level than architecture projects not only in before bid but also in after award. Especially, country risk is the worst risk in both plant and civil projects, followed by project risk and capability risk. Also, although plant and civil projects reflect more contingency than architecture projects, contingency is not correlated with the checked risk level before bid. Lastly, the cost growth rate is correlated with the actual risk level in all product types. This study is expected to support in planning better practical risk management for international construction projects.

• Korean Journal of Construction Engineering and Management
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• v.6 no.4 s.26
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• pp.80-90
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• 2005

Activity durations retain probabilistic and stochastic natures due to diverse factors causing the delay or acceleration of activity completion. These natures make the final project duration to be a random variable. These factors are the major source of financial risk. Extending the Stochastic Project Scheduling Simulation system (SPSS) developed in previous research; this research presents a method to estimate how the final project duration behaves when activity durations change randomly. The final project cost is estimated by considering the fluctuation of indirect cost, which occurs due to the delay or acceleration of activity completion, along with direct cost assigned to an activity. The final project cost is estimated by considering how indirect cost behaves when activity duration change. The method quantifies the amount of contingency to cover the expected delay of project delivery. It is based on the quantitative analysis to obtain the descriptive statistics from the simulation outputs (final project durations). Existing deterministic scheduling method apply an arbitrary figures to the amount of delay contingency with uncertainty. However, the stochastic method developed in this research allows computing the amount of delay contingency with certainty and certain degree of confidence. An example project is used to illustrate the quantitative analysis method using simulation. When the statistical location and shape of probability distribution functions defining activity durations change, how the final project duration and cost behave are ascertained using automated sensitivity analysis method

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• 2007.11a
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• pp.68-74
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• 2007

Critical Chain Project Management(CCPM) is a new project management system paradigm which maintains the advantages of PERT/CPM and improves the shortcomings of it. In CCPM the task durations are determined as 50% time estimates, ie average time discarding the their contingency. CCPM determines the critical chain the constraint of a projects considering the logical precedence relationship and resource conflict resolution. Project buffer is located at the end of critical chain to absorb the variations of critical chain. The size of project buffer is usually calculated as the half of the sum of critical chain length. Also feeding buffer is inserted after each non-critical chain which feeding into the critical chain to prevent the time delay of critical chain from uncertainties of non-critical chains. Resource buffer can be utilized to improve the availability of resources of critical chain. Buffer management is a project execution and control mechanism. Buffers are classified into 3 zones. They are OK zone, Watch and Plan zone and Expediting zone. If the project status is within Watch and Plan zone, contingency plan is established. And if it changes into Expediting zone, the preplanned contingency plan are executed to recover the time delay. In CCPM the workers are asked to work with relay runner work mechanism that they work fast if possible and report their completion to project manager for the succeeding task to start as soon as possible. The task durations are not considered as the promised time schedule. The multi-tasking is prohibited.

• Korean Journal of Construction Engineering and Management
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• v.19 no.5
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• pp.81-89
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• 2018

The purpose of this study is to assess the risk and predict the contingency for modular plant construction projects. Considering the work characteristics of the modular plant, The adapted research method is that suggest models for assessment impact of risk and predict the contingency considering risk. Based on the proposed models, It is selected one modular plant construction project and assessment impact of risk factors and predicted the contingency. The results of this study are as follows: Assessment the probability of occurrence of risk factors and intensity of impact, and extract 15 important risk factors. These are classified as Engineering, Procurement, Fabrication, Transportation, Construction phases to consider the work characteristics of the modular plant. The predicted contingency is that 6.739%(Engineering 2.850%, Procurement 6.225%, Fabrication 6.211%, Transportation 4.165%, Construction 8.168%) to prepare the basic business expense. The model is used as a way to derive quantitative results in the decision-making process for risk management in construction projects.

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• 2006.11a
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• pp.295-300
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• 2006

In this research, risk factors which can raise project cost are identified in the initial stage and picked out through the decision maker's baseline. And also this probable risks are implemented to the project cash flow to estimate the contingency and to build a risk management system in the level of project. The risks that affect the projects profits were classified in two categories in the risk checklist. Firstly, financial risks derived from the external economic conditions for example exchange rate, escalation, interest rates etc. are analyzed through the stochastic methods, Monte-Carlo Simulation. Secondly, the project individual risks which are come from the project characteristics, for example country risk, clime, owner etc., are evaluated using the utility curve of the decision maker. Finally these risk analysis methods are used to forecast the actual project cash flow and final profit.

• Journal of the Korean Operations Research and Management Science Society
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• v.17 no.2
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• pp.53-90
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• 1992

THis study examines a contingency relationship between task uncertainty and structure of project teams in conjunction with the leader-member communication patterns. Multivariate analyses are used to analyze the data from 63 R & D project teams of research laboratory in a large manufacturing corporation. Major findings for this study can be summarized as follows. First, project teams with an organic structure are found to yield high performance when task uncertainty is high, while project teams with a mechanistic structure achieve high performance when their tasks are relatively certain. Second, patterns of leader-member comunication are significantly associated with both task uncertainty and structural characteristics of project teams. This implies that leaders of project teams communicate with their members in more conslutative manner when their tasks are uncertain or when their team structure exhibits organic characteristics. Finally, task uncertainty playus a significant moderating role in the relationship between consultative communication patterns and performance of project teams. Based upon these findings, this study offers several theoretical, practical, and methodological implications.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.26 no.4D
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• pp.617-626
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• 2006

The purpose of contingency estimate is to manage the increase in construction cost and the extension of the term of works due to the inevitable occurrence of uncertain situations. The aim of contingency strategies have two intentions. One thing, can be called a passive strategy, gets ready for construction cost increase due to uncertainty factors, the other thing, can be called a active strategy, gets rid of the obstruction factors of work prior to construction performance. Therefore, from the view point of medium and long term, there is necessary to accumulate data in conjunction with design modification cases and carefully analyze uncertainty factors from construction types and characters. Therefore, this thesis will analyze design modification case at a special work such as highway and select factors that affect construction cost and present contingency estimate process using regression analysis.

• Journal of Technology Innovation
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• v.11 no.1
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• pp.177-193
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• 2003

This paper examines empirically if the increase of funding uncertainty in government supported R&D institutes(GSRIs) in Korean cause managers to use more effective management control practices. Recently government introduced a new government R&D budget management system, based on competition, named PBS(Project Base System). Government requires GSRIs to be self-supporting and compete for funding from government. The introduction of new budget management system named PBS, has resulted in the increase of funding uncertainty in GSRIs. According to institutional theory, government organizations gain legitimacy by conforming to external expectations regarding management control practices, In contrast, contingency theory proposes that management control practices are driven by the fit between the technical features of the environment and the management control practices. The contingency literature provides that one external factor expected to motivate government managers to use more efficient control practices is the presence of competition and funding uncertainty. This paper use both theoretical perspective to develop hypotheses and examine the influence of funding environment on management control practices. Results show that the more institutionalized environment, the more managers in GSRIs rely on bureaucratic mode of control for conforming to external requirements, and the greater the funding uncertainty, the more managers use results and personal modes of control to improve research team performance.

• Journal of Information Technology Applications and Management
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• v.16 no.4
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• pp.135-165
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• 2009

The major purpose of this study is to identify the factors influencing the implementation performance of ERP Systems from an integrated viewpoint. For this purpose, a research model is developed based on the literature reviews of ERP systems, contingency theory, and change management theory. The research model proposed fifteen variables as the factors influencing the implementation performance in the ERP systems. The data have been collected from the 164 enterprises which implemented ERP systems at least one year ago. The respondents were person in charge of ERP system of each corporation. The results of hypothesis testing through multiple regression analysis are summarized as follows. Firstly, standardization of work, concentration of decision making, top management concern and support, real user participation, project support goodness, ease of use, and system usefulness have positive influence upon non-financial performance. Secondly, market uncertainty, industrial competition, project support goodness, and customization minimization have positive influence upon financial performance. From the analysis, this research have identified important characteristics for the successful implementation of ERP systems. Consequently, this research ends with managerial and theoretical implications of the study results, as well as limitations and future research directions.