Effective techniques in cost optimization of construction project an review

IJRET: International Journal of Research in Engineering and Technology eISSN: 2319-1163 | pISSN: 2321-7308
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Volume: 04 Issue: 03 | Mar-2015, Available @ http://www.ijret.org 464
EFFECTIVE TECHNIQUES IN COST OPTIMIZATION OF
CONSTRUCTION PROJECT: AN REVIEW
Anuja Rajguru1
, Parag Mahatme2
1
P. G. Scholar, Department of Civil Engineering, PRMCEAM, Badnera, M.S. India
2
Assistant Professor, Department of Civil Engineering, PRMCEAM, Badnera, M.S. India
Abstract
In the construction project, time and cost are the most important factors to be considered in the planning of every project. The aim
of project is to finish the projects on time, within budget and to achieve other project objectives. It is a difficult task undertaken
by project managers in practice, which include constantly measuring progress, evaluation of plans, and corrective actions should
be taken whenever required. Optimization is a systematic effort made to improve profit margins and obtain the best results under
given circumstances. There is a Systematic planning and programming with effective management is necessary for timely
completion of the project. there is availability of various tools and techniques for optimization. Optimizing performance of the
different techniques adopted at one stage of the construction process may not be beneficial if the methods used are not to up the
efficient level. In this approach we have studied various factors which affect the cost of projects. again in this approach we have
studied various techniques and various materials used for cost optimization. Also the need of optimization is discussed.
Keywords: time, cost, optimization.
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1. INTRODUCTION
India is the developing country and in the economy of
country construction projects and industries play an vital
role. Time and cost are two main concerns in a construction
and they are used for planning a project. This has increased
the importance of time and Cost optimization in
construction projects. is necessary to estimate the cost and
time of each activity through which the whole duration and
total cost of the project are determined to complete the
planning task. Optimization is a systematic effort made to
improve profit margins and obtain the best results under
given circumstances or situations. “Cost Optimization can
be defined as the achievement of real and permanent
reduction in the unit cost of services provided without
damaging their suitability for the in planned use”. There is
availability of various techniques for optimization and
project control software, still many construction projects do
not achieve their cost and time objectives. Optimizing
performance of the different techniques adopted at one stage
of the construction process may not be beneficial if the
methods used are not to up the efficient level. Hence it is
required to follow and implement the techniques in every
stage of the construction process with the analyses of the
information available. The methodology and the type of the
used in a construction is also plays very important role for
the successful completion of a project.
1.1 Need of Optimization
The optimization of time and cost is necessary as it could
minimize both the time and total cost of project. This
optimization in time and cost helps to achieve the greatest
benefit.
2. LITERATURE REVIEW
Shanmugapriya S., Dr. Subramanian K. (October 2013) [1]
Time overruns and Cost overruns has been a major issue in
many Indian construction projects. The objective of this
paper to study significant factors causing Time overruns and
Cost overruns in Indian construction projects. The result
accomplished from the survey revealed that the major cause
for time overruns are contract modification, material market
rate, and high level of quality requirement and the major
cause for cost overruns are , change in material
specification, high transportation cost, and escalation of
materials price.
Salunkhe. A, Patil R (Janeuary2014) [2] Construction delay
is considered to be one of the recurring problems in the
construction industry and it has an adverse effect on project
success in terms of time, cost and quality. The time and cost
for performance of a project are usually important to the
employer and contractor. The authors highlights the types of
construction delays due to which project suffer time and cost
overrun. also give external and internal factors that influence
the construction process and outlines the effect of delay in
large construction projects.
T.Subramani , P S Sruthi, M.Kavitha (June. 2014) [3] The
main objectives of this paper are to identify and analyze the
causes of cost overrun in construction. The results carried
out from survey showed that, poor contract management,
slow decision making, poor schedule management, increase
in material/machine prices poor design/ delay in providing
design, rework due to wrong work, long period between
design and time of bidding/tendering and wrong estimation/
estimation method are the major causes of cost overrun.

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Memon A.H, Rahman I.A, Mohd Razaki Abdullah3, Ade
Asmi Abdu Azis, (December 2010) [4] Project cost is one
of the most important criteria of success of project. the
authors are focusing on identification of significant causes
affecting construction cost in MARA large projects. From
the study author found that contractor's poor site
management and supervision, cash flow and financial
difficulties faced by contractors, shortage of site workers,
inadequate contractor experience, incorrect planning and
scheduling by contractors are most severe factors which
affect cost of project. while changes in scope of project and
frequent design changes are least affecting factors on
construction cost.
Benviolent Chigara,Tirivavi Moyo, Fungai Mudzengerere
(2013) [5] they made the research for the cost management
strategies employed by contractor on building projects. Also
made investigation that contractor has to manage project
cost. For data collection they made the survey and
interviews in Zimbabwe. From study they found that
contractor efforts to manage the project cost by
concentrating on the management on the project resources.
Also the cost management process in Zimbabwe compare to
other developing countries is still dominated by prematurely
developed automated system or traditional paper based
systems of managing project cost information. The author
provide a base line information on strategies used for
managing project cost.
Barbole A.N., Yuvraj D. Nalwade, Santosh D. Parakh (
June. 2013) [6] The survival today for any company is how
to manage its service Cost, quality, and performance. Now a
days the customers are continuously demanding high quality
and better performance of services and at the same time they
want the prices to fall. For this author focus on impact of
cost control and cost reduction techniques in present
scenario. An objective of this paper is to understand the
basic concept of Cost, Cost Control, and Cost Reduction and
to study various Tool and Techniques available for Cost
Control and Cost Reduction. The Cost Control and Cost
Reduction techniques used in manufacturing sector like
Value Engineering, Quality Control, and Budgetary Control
are specified by the author also cost, cost reduction, cost
control etc. Various terms are specified by the author.
C.I. Anyanwu (December 2013) [7] author discuss about the
various parameters regarding the cost such as budgeting,
cost monitoring and control systems. he discuss about the
cost control and the cost control parameter in material,
labor, equipments etc .As per the author concept of budget
can be define as the translation of an organizational plan
into concrete form by way of resource allocation in form of
cash. He discuss about the various tools used by the
management and cost supervisors for planning, controlling,
and monitoring of project such as Gantt chart, network
analysis, CPM, PERT. Main focus of author is to study the
manufacturing philosophy and inputs which contributes in
evaluating and maintaining construction cost in order to
reduce the project abandonment which is caused due to cost
overrun.
Akintola Omigbodun (June 2001) [8] as per the author value
engineering can be defined as the ‘‘Engineering is the
conceptualization, design, construction, and administration
of projects and products whatever the field or application,
the engineer solves problems with imagination, creativity
and synthesis of various sources of knowledge.’’ To obtain
the optimal solution for any engineering design 4 methods
has discussed are as follows design for manufacturing and
assembly, concurrent engineering, total quality
management, and value engineering. A summary of other
methods of optimal design methods are compared with
value engineering. Cost minimization in building
construction is discussed with examples on building projects
in West Africa and the Middle East. From study author
concluded that, due to application of value engineering to
building projects management team obtains a solution which
emphasis the functions of project which helps to team to
make final choice and which results in cost effective design
for project. Value engineering is effective because its
procedures give opportunities for raising design issues
associated with the latter group of factors as well as design.
Georgekutty C.K, Dr. George Mathew (August - 2012)
[9]the innovation of new technology in the construction
field is not being adopted in project implementation. this
results the growth of construction industry is slow. The real
problem is construction will not complete within the
budgeted cost and time and finally leads to project failure as
end result. Material has a dominating role in construction. If
the material has controlled properly then the total project
cost would be reduced. To achieve this objective, a research
methodology has developed by author to control the
material procurement and carrying cost. The methodology
adopted which adopted has been validated by a computer
program and same is found correct and useful for analysis
and controlling any type of projects.
J Zhou, Ped Love, X Wang, Kl Teo And Z (Irani 2013) [10]
main objective of the paper is to Optimize construction
scheduling. for this author adopted various methods like
Mathematical Method, Heuristic Method, Metaheuristic
Method. As per the author the Methods and algorithms
applied for optimizing construction scheduling efficient and
effective.
Khyomesh V. Patel, Prof. Chetna M. Vyas ( May 2011) [11]
as per the author to manage the productivity and the cost
efficiency material management is more essential. the main
objective of the material management are buying or
purchasing, storing and inventory control, quality assurance.
to achieve these objectives there is need of material
management. Author carried out as survey in Ahmadabad to
check material management. they investigate that material
and equipment contribute 70% that of total cost. hence for
the improvement of product and cost efficiency material
management is important. Also proper tracking, controlling
is required, if there is poor management may lead to delay
of project.

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Hisham Said, Khaled El-Rayes, (June 2011) [12]the authors
suggested new model of construction logistics planning to
enable the optimization and integration of critical planning
decisions of material procurement and also of the material
storage on construction site. To check the capability of CLP
model one example was analyzed. After the analysis the
results obtained that material procurement decisions are
affected by the criticality of construction activities
consuming the material, site space available, material
procurement and site layout constrains.
Andrew N Baldwin, Simon A Austin, Chi-Sun Poon, Li-Yin
Shen, Irene Wong (June 2007) [13] the design of high rise
building I different from the different of residential and
other forms of buildings because of the repetition of the
construction and time for the completion of each floor. The
main objective of the authors is to develop the model or
tools and techniques for analyzing the information for the
high rise building. Also, to investigate the difference in the
various models for the private residential buildings. Authors
discuss about the optimization techniques such as design
structural matrix. From study author conclude that there is
need to develop the new tools and techniques which can
help to designer to analyze the information and to make the
improvement in the design management which helps for
optimization.
P. Tiwari, K. Parikh, J. Parikh (September 1999) [14]
authors discussed about the theoretical basic of hope model.
Propose new model of multi criteria optimization technique
for buildings. Also Suggested that multi criteria
optimization model can b developed to solve the problem in
Road, Bridge, and Tunnel construction.
Kale R, Gore G. N, Salunke J. P, (January 2014) [15] Main
objective of this paper is cost optimization of bridge
including the material. As per the authors the optimization is
made for the different grade of steel and concrete. for this
they applied direct design method for analyzing the
structure. The methodology adopted by them is Nonlinear
Programming Problem (NLPP) By Using MATLAB
Software with SUMT (Sequential Unconstrained
minimization technique). Authors found that there is a
significant savings in cost overrun.
C. Sarma, Hoijat Adeli (1998) [16] the objective of this
paper is to optimize cost of concrete structures involves
beams, slabs, columns, bridges, water tanks, frame
structures, tensile members, folded plates, and shear walls,
pipes. One method for Cost Optimization Using Reliability
Theory is explained. From the study the authors concluded
that there is a need to perform research on cost optimization
of realistic three-dimensional structures, especially for the
large structures with number of members where
optimization can result in substantial savings.
Gopal M. Naik , M. Kumar (September 2013) [17] The main
objective of the paper is To increase the productivity and
necessary to forecast the costs arriving from resources so
that the total cost of project can be reduced. The Artificial
Neural Networks have become well established as viable,
multipurpose, robust computational methodologies with
solid theoretic support and with strong potential to be
effective in any discipline, especially in construction. From
survey results comes out that the Neural Networks approach
has optimized the total project cost by 3.91%, and the
duration of the project has been reduced around 5% of the
total duration of the project.
Shrivastava R, Singh S. , Dubey C. G. (2012) [18] Time and
cost are the most important factors to be considered in every
construction project. Ant colony optimization technique was
introduced in the early 1990’s as a novel technique for
solving hard combinational optimization problem. on basis
of that author developed new multi-colony ant algorithm for
the optimization of three objectives time-cost quality with
quantity. The model is also applied to two objectives time –
cost trade off problem. The results which are coming out
compared to those of the existing approaches. As per the
authors Model is capable of compromising between
important aspect of construction projects
Seyed Ali Mousavi Dehmourdi (2014) [19] the Objective of
this paper are to apply the principles of engineering
economics, basic economic concepts , finance and
quantitative techniques to modeling and analysis of civil
engineering projects. Also a practical application of linear
programming in a real life project problem with two
objectives as optimization of transporting cost of equipment
and finding the best solution for reducing the functional
costs of the equipment. Mainly structured linear
programming model is used for optimizing the transporting
cost of equipment. Applications of this approach helps in
determining the need for the replacement and the
maintenance analysis are based on the econometric approach
to the realistic problems and the result shows that
optimization with advanced techniques really helps in
minimization of cost of project.
Daisy X.M. Zheng, S. Thomas Ng , Mohan M.
Kumaraswamy (September 2002) [20] Completing a
construction project with the least time and cost is critical
Factor and usually requires the engagement of additional
labor and plant or the adoption of alternative construction
techniques which add extra cost liabilities to the contractor.
For time-cost optimization several analytical models have
been developed. From those the Genetic Algorithms (GA)
could be used to establish the fitness of solutions by
evaluating the objective function and its constraints. the
objective of paper is to compare the analytical power of the
GA with other techniques proposed for TCO. The results
come out which indicate that the GA techniques could
generate the most optimal outcome for construction Time-
Cost Optimization it is more beneficial when the project is
large and/or complex.
S. Thomas Ng And Yanshuai Zhang (September 2008) [21]
main objective of the paper is to Optimize Construction
Time and Cost of project. For this they adopted the Ant
Colony Method of optimization. Main aspect is Time, Cost

_______________________________________________________________________________________
And Quality Optimization. They made the Comparison with
the other optimization methods. Ant colony method is the
multi objective optimization techinque.
Daisy X.M. Zheng, S. Thomas Ng, Mohan M.
Kumaraswamy (2002) [22] They applied a Genetic
Algorithm to the project for Multi objective optimization.
As per the author Genetic Algorithm is multi objective i.e.
Time, Cost and Quality optimization. Also GA techniques
could generate the most optimal outcome For construction
Time cost Optimization.
A.S. Ali, S.N. Kamaruzzaman (2010) [23] as per the author
for management of construction 4 parameters important are
as follows: scope, cost, time, and quality. the main aim of
the author is to find out the problem or parameters which
contribute for the cost overrun. for this they carried out the
quaternary survey on the live projects. for the data analysis
the method used is quantitative based i.e. descriptive
statistics and ranking analysis is used. from the investigation
they found that factors which contributes to cost overrun
was inaccurate or poor estimation of original cost and factor
which don't affect is mistake in design for this to control the
construction cost method suggested by the author is proper
costing and financing. also they concluded that cost overrun
is most serious problem which may affect the construction
project effectively.
Ming Li ,Guangdong Wurobust, (2014) [24] the objective of
this paper is to optimization of a time-cost tradeoff problem.
Based on multi objective robust optimization method, a
optimization model for time-cost tradeoff problem is
developed. The results come out that, by means of adjusting
the time and cost robust coefficients, the robust Pareto sets
for time-cost tradeoff can be obtained according to different
acceptable risk level, from which the decision maker could
choose the preferred construction alternative.
Pathak.U.J, Chavan.C.S, Rathode.L.V, Nachare.V.L,
Suryawanshi.A.B, (Apr 2014) [25] Low cost housing
technologies aim to cut down construction cost by using
alternatives to conventional methods and Input. Authors
examined the cost effectiveness of using low cost housing
technologies in comparison with the traditional construction
methods. From Two case studies in India found that about
22 to 26 % of the construction cost including material and
labor cost can be saved by using the low cost housing
technologies in comparison with traditional construction
methods for walling and roofing respectively.
Tam W. Y, (2011) [26] It is necessary to adopt cost
effective, innovative and Eco-friendly housing technologies
for the construction of houses and buildings for enabling the
common people to construct houses at affordable cost.
Methodology used by author is to compares construction
cost for the traditional and low cost housing technologies.
For which Case studies in India are used for the
investigation. Construction methods, Strength and durability
of the structure, stability, safety of various members are
compared during cost reduction. The result found that about
26.11% and 22.68% of the construction cost can be saved by
using low cost housing technologies in comparison with the
traditional construction methods. This proves that using low
cost housing technologies is a cost effective construction
approach for the industry.
Nilanjan Sengupta (January 2008) [27] as per the author the
cost effective construction technologies are useful and
beneficial from both in terms of cost and environment.
Author discuss about the some effective technologies in
India with their features and advantages. Technologies used
in India are
1) Rat trap bond wall: due to this bond cost and material is
saved and strength is more 2) Brick arch: it is given with its
construction. It is beneficial from appearance point of view
3) Filler slab : its slab construction is also discussed. Its
advantageous from economy, appearance, strength, material
usage and reduction, less weight, material saving point of
view.
4) compressed earth block : it is beneficial because it absorb
less water in rainfall.
From the study author concluded that, if we pay attention
towards the terms like sanitization of people, manpower
development, material devolvement, technical guidance’s
then the cost effective techniques will be extensively used in
the light of sustainable development and protection of
environment.
R. Taur, V. Devi (Oct 2009) [28]the main objective of this
paper is to point out the various aspect of prefabricated
building methodology for low housing. For this different
prefabrication techniques with their advantage and
importance are given by authors. In a building the
foundation, walls, doors and windows, floors, roofs are the
most important components which can be analyzed
individually based on the needs. There is need for improving
the speed of construction and reducing the construction cost.
The methods of construction systems suggested by authors
are as follows prefabricated roofing components like precast
RC planks, structural block walls, precast hollow concrete
panels, precast concrete/Ferro cement panels, mortar less
block walls.
3. CONCLUSION
In this paper we have reviewed different techniques for
optimization. To minimize the construction cost and
duration at each phase is important. It is a need to meet the
present day requirements and to complete the project within
the estimated time, cost, and available resources. Mainly
affecting the factor on cost of project is delay in project and
material. Several methods have been developed and applied
to analyze the time-cost problems, but they can optimize
only one parameter. Various low cost material also
suggested for optimizing the cost of project along with
maintaining the quality and strength of the project. Also
various mathematical method and software based models
studied for optimization.

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REFERENCES
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ACSGE, BITS Pilani, India

_______________________________________________________________________________________
BIOGRAPHIES
Miss. Anuja M. Rajguru received B.E
(Civil Engineering) from SGB Amravati
University in 2013 and pursuing M.E.
(Construction Engineering and
Management) from SGB University. Right
now working as a lecturer in the Dept. of
Civil Engineering at Prof. Ram Meghe College of
Engineering & Management, Badnera –Amravati
Mr. Parag Mahatme received B.E. (Civil
Engineering) & M.Tech. (Environmental
Engineering) from Govt. College of
Engineering Amravati in 2009 & 2011
respectively. He is working as Assistant
Professor in PRMCEAM, Badnera.

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