Construction Prices : the Market Effect

Teachers of construction economics and estimating have for a long time recognised that there is more to construction pricing than detailed calculation of costs (to the contractor). We always get to the point where we have to say "of course, experience or familiarity of the market is very important and this needs judgement, intuition, etc". Quite how important is the matter in construction pricing is not known and we tend to trivialise its effect. If judgement of the market has a minimal effect, little harm would be done, but if it is really important then some quite serious consequences arise which go well beyond the teaching environment. Major areas of concern for the quantity surveyor are in cost modelling and cost planning - neither of which pay any significant attention to the market effect. There are currently two schools of thought about the market effect issue. The first school is prepared to ignore possible effects until more is known. This may be called the pragmatic school. The second school exists solely to criticise the first school. We will call this the antagonistic school. Neither the pragmatic nor the antagonistic schools seem to be particularly keen to resolve the issue one way or the other. The founder and leader of the antagonistic school is Brian Fine whose paper in 1974 is still the basic text on the subject, and in which he coined the term 'socially acceptable' price to describe what we now recognise as the market effect. Mr Fine's argument was then, and is since, that the uncertainty surrounding the contractors' costing and cost estimating process is such that the uncertainty surrounding the contractors' cost that it logically leads to a market-orientated pricing approach. Very little factual evidence, however, seems to be available to support these arguments in any conclusive manner. A further, and more important point for the pragmatic school, is that, even if the market effect is as important as Mr Fine believes, there are no indications of how it can be measured, evaluated or predicted. Since 1974 evidence has been accumulating which tends to reinforce the antagonists' view. A review of the literature covering both contractors' and designers' estimates found many references to the use of value judgements in construction pricing (Ashworth & Skitmore, 1985), which supports the antagonistic view in implying the existence of uncertainty overload. The most convincing evidence emerged quite by accident in some research we recently completed with practicing quantity surveyors in estimating accuracy (Skitmore, 1985). In addition to demonstrating that individual quantity surveyors and certain types of buildings had significant effect on estimating accuracy, one surprise result was that only a very small amount of information was used by the most expert surveyors for relatively very accurate estimates. Only the type and size of building, it seemed, was really relevant in determining accuracy. More detailed information about the buildings' specification, and even a sight to the drawings, did not significantly improve their accuracy level. This seemed to offer clear evidence that the constructional aspects of the project were largely irrelevant and that the expert surveyors were somehow tuning in to the market price of the building. The obvious next step is to feed our expert surveyors with more relevant 'market' information in order to assess its effect. The problem with this is that our experts do not seem able to verbalise their requirements in this respect - a common occurrence in research of this nature. The lack of research into the nature of market effects on prices also means the literature provides little of benefit. Hence the need for this study. It was felt that a clearer picture of the nature of construction markets would be obtained in an environment where free enterprise was a truly ideological force. For this reason, the United States of America was chosen for the next stage of our investigations. Several people were interviewed in an informal and unstructured manner to elicit their views on the action of market forces on construction prices. Although a small number of people were involved, they were thought to be reasonably representative of knowledge in construction pricing. They were also very well able to articulate their views. Our initial reaction to the interviews was that our USA subjects held very close views to those held in the UK. However, detailed analysis revealed the existence of remarkably clear and consistent insights that would not have been obtained in the UK. Further evidence was also obtained from literature relating to the subject and some of the interviewees very kindly expanded on their views in later postal correspondence. We have now analysed all the evidence received and, although a great deal is of an anecdotal nature, we feel that our findings enable at least the basic nature of the subject to be understood and that the factors and their interrelationships can now be examined more formally in relation to construction price levels. I must express my gratitude to the Royal Institution of Chartered Surveyors' Educational Trust and the University of Salford's Department of Civil Engineering for collectively funding this study. My sincere thanks also go to our American participants who freely gave their time and valuable knowledge to us in our enquiries. Finally, I must record my thanks to Tim and Anne for their remarkable ability to produce an intelligible typescript from my unintelligible writing.

Factors affecting marketing decision making with an ethical content : collusive tendering in the construction contract market

Reports of immoral marketing practices i n the construction industry attract political, media and public but not much academic interest. This paper adopts a behavioural perspective and proposes a model for applying marketing ethics concepts and methods in the study of collusion in the construction contract market. An extensive multidisciplinary review of existing literature identified a lack of adequate conceptualisation of the mechanisms and decision making factors of collusive tendering. The process of developing the model is detailed in this paper. The objectives and methodology of the research project that tested the model are also outlined. The paper concludes with a brief note on the contributions and application of the proposed model.

A microscopic simulation model to estimate Bus Rapid Transit (BRT) station service capacity with mixed stopping and non-stopping bus operation

Bus Rapid Transit (BRT) station is the interface between passenger and service. The station is crucial to line operation as it is typically the only location where buses can pass each other. Congestion may occur here when buses maneuvering into and out of the platform lane interfere with bus flow, or when a queue of buses forms upstream of the platform lane blocking the passing lane. However, some systems include operation where express buses pass the critical station, resulting in a proportion of non stopping buses. It is important to understand the operation of the critical busway station under this type of operation, as it affects busway line capacity. This study uses micro simulation to treat the BRT station operation and to analyze the relationship between station Limit state bus capacity (B_ls), Total Bus Capacity (B_ttl). First, the simulation model is developed for Limit state scenario and then a mathematical model is defined, calibrated for a specified range of controlled scenarios of mean and coefficient of variation of dwell time. Thereafter, the proposed B_ls model is extended to consider non stopping buses and B_ttlmodel is defined. The proposed models provides better understanding to the BRT line capacity and is useful for transit authorities for designing better BRT operation.

Computer simulation of underground blast response of pile in saturated soil

This paper treats the blast response of a pile foundation in saturated sand using explicit nonlinear finite element analysis, considering complex material behavior of soil and soil–pile interaction. Blast wave propagation in the soil is studied and the horizontal deformation of pile and effective stresses in the pile are presented. Results indicate that the upper part of the pile to be vulnerable and the pile response decays with distance from the explosive. The findings of this research provide valuable information on the effects of underground explosions on pile foundation and will guide future development, validation and application of computer models.

Simulation architecture for the design of cooperative collision warning systems

Simulation has been widely used to estimate the benefits of Cooperative Systems (CS) based on Inter-Vehicular Communications (IVC). This paper presents a new architecture built with the SiVIC simulator and the RTMaps™ multisensors prototyping platform. We introduce several improvements from a previous similar architecture, regarding IVC modelisation and vehicles’ control. It has been tuned with on-road measurements to improve fidelity. We discuss the results of a freeway emergency braking scenario (EEBL) implemented to validate our architecture’s capabilities.

Simulation architecture for cooperative ITS applications and augmented perception

Cooperative Systems provide, through the multiplication of information sources over the road, a lot of potential to improve the safety of road users, especially drivers. However, developing cooperative ITS applications requires additional resources compared to non-cooperative applications which are both time consuming and expensive. In this paper, we present a simulation architecture aimed at prototyping cooperative ITS applications in an accurate and detailed, close-to-reality environment; the architecture is designed to be modular and generalist. It can be used to simulate any type of CS applications as well as augmented perception. Then, we discuss the results of two applications deployed with our architecture, using a common freeway emergency braking scenario. The first application is Emergency Electronic Brake Light (EEBL); we discuss improvements in safety in terms of the number of crashes and the severity of crashes. The second application compares the performance of a cooperative risk assessment using an augmented map against a non-cooperative approach based on local-perception only. Our results show a systematic improvement of forward warning time for most vehicles in the string when using the augmented-map-based risk assessment.

Faster Monte Carlo simulation of radiotherapy geometries

Using Monte Carlo simulation for radiotherapy dose calculation can provide more accurate results when compared to the analytical methods usually found in modern treatment planning systems, especially in regions with a high degree of inhomogeneity. These more accurate results acquired using Monte Carlo simulation however, often require orders of magnitude more calculation time so as to attain high precision, thereby reducing its utility within the clinical environment. This work aims to improve the utility of Monte Carlo simulation within the clinical environment by developing techniques which enable faster Monte Carlo simulation of radiotherapy geometries. This is achieved principally through the use new high performance computing environments and simpler alternative, yet equivalent representations of complex geometries. Firstly the use of cloud computing technology and it application to radiotherapy dose calculation is demonstrated. As with other super-computer like environments, the time to complete a simulation decreases as 1=n with increasing n cloud based computers performing the calculation in parallel. Unlike traditional super computer infrastructure however, there is no initial outlay of cost, only modest ongoing usage fees; the simulations described in the following are performed using this cloud computing technology. The definition of geometry within the chosen Monte Carlo simulation environment - Geometry & Tracking 4 (GEANT4) in this case - is also addressed in this work. At the simulation implementation level, a new computer aided design interface is presented for use with GEANT4 enabling direct coupling between manufactured parts and their equivalent in the simulation environment, which is of particular importance when defining linear accelerator treatment head geometry. Further, a new technique for navigating tessellated or meshed geometries is described, allowing for up to 3 orders of magnitude performance improvement with the use of tetrahedral meshes in place of complex triangular surface meshes. The technique has application in the definition of both mechanical parts in a geometry as well as patient geometry. Static patient CT datasets like those found in typical radiotherapy treatment plans are often very large and present a significant performance penalty on a Monte Carlo simulation. By extracting the regions of interest in a radiotherapy treatment plan, and representing them in a mesh based form similar to those used in computer aided design, the above mentioned optimisation techniques can be used so as to reduce the time required to navigation the patient geometry in the simulation environment. Results presented in this work show that these equivalent yet much simplified patient geometry representations enable significant performance improvements over simulations that consider raw CT datasets alone. Furthermore, this mesh based representation allows for direct manipulation of the geometry enabling motion augmentation for time dependant dose calculation for example. Finally, an experimental dosimetry technique is described which allows the validation of time dependant Monte Carlo simulation, like the ones made possible by the afore mentioned patient geometry definition. A bespoke organic plastic scintillator dose rate meter is embedded in a gel dosimeter thereby enabling simultaneous 3D dose distribution and dose rate measurement. This work demonstrates the effectiveness of applying alternative and equivalent geometry definitions to complex geometries for the purposes of Monte Carlo simulation performance improvement. Additionally, these alternative geometry definitions allow for manipulations to be performed on otherwise static and rigid geometry.

Imputation of female labour market experience : some Australian evidence on the Zabalza and Arrufat method

Recent empirical studies of gender discrimination point to the importance of accurately controlling for accumulated labour market experience. Unfortunately in Australia, most data sets do not include information on actual experience. The current paper using data from the National Social Science Survey 1984, examines the efficacy of imputing female labour market experience via the Zabalza and Arrufat (1985) method. The results suggest that the method provides a more accurate measure of experience than that provided by the traditional Mincer proxy. However, the imputation method is sensitive to the choice of identification restrictions. We suggest a novel alternative to a choice between arbitrary restrictions.

Labor market reform and the changing structure of wage determination in China's state sector during the 1980s

China's market-oriented labor market reform has been in place for about one and a half decades. This study uses individual data for 1981 and 1987 to examine the success of the first half of the reform program. Success is evaluated by examining changes in the wage setting structure in the state-owned sector over the reform period. Have the market reforms stimulated worker incentives by increasing the returns to human capital acquisition? Has the wage structure altered to more closely mimic that of a market economy? In 1987, there is evidence of a structural change in the system of wage determination, with slightly increased rates of return to human capital. However, changes in industrial wage differentials appear to play the dominant role. It is argued that this may be due to labor market reforms, in particular the introduction of the profit related bonus scheme.J. Comp. Econom.,December 1997,25(3), pp. 403–421. Australian National University, Canberra, ACT0200, Australia and University of Tasmania, Hobart, Tasmania, Australia, and University of Aberdeen, Old Aberdeen, Scotland AB24 3QY.

Coordinated probabilistic optimal decision-making model for multi-area ATC with risk control

In the decision-making of multi-area ATC (Available Transfer Capacity) in electricity market environment, the existing resources of transmission network should be optimally dispatched and coordinately employed on the premise that the secure system operation is maintained and risk associated is controllable. The non-sequential Monte Carlo simulation is used to determine the ATC probability density distribution of specified areas under the influence of several uncertainty factors, based on which, a coordinated probabilistic optimal decision-making model with the maximal risk benefit as its objective is developed for multi-area ATC. The NSGA-II is applied to calculate the ATC of each area, which considers the risk cost caused by relevant uncertainty factors and the synchronous coordination among areas. The essential characteristics of the developed model and the employed algorithm are illustrated by the example of IEEE 118-bus test system. Simulative result shows that, the risk of multi-area ATC decision-making is influenced by the uncertainties in power system operation and the relative importance degrees of different areas.

International stock market linkages : are overnight returns on the U.S. Market informative?

Based on the theory of international stock market co-movements, this study shows that a profitable trading strategy can be developed. The U.S. market return is considered as overnight information by ordinary investors in the Asian and the European stock markets, and opening prices in local markets reflect the U.S. overnight return. However, smart traders would either judge the impact of overnight information more correctly, or predict unreleased information. Thus, the difference between expected opening prices based on the U.S. return and actual opening prices is counted as smart traders’ prediction power, which is either a buy or a sell signal. Using index futures price data from 12 countries from 2000 to 2011, cumulative returns on the trading strategy are calculated with taking into account transaction costs. The empirical results show that the proposed trading strategy generates higher riskadjusted returns than that of the benchmarks in 12 sample countries. The trading performances for the Asian markets surpass those for the European markets because the U.S. return is the only overnight information for the Asian markets whereas the Asian markets returns are additional information to the European investors.

Computer experiment – a case study for modelling and simulation of manufacturing systems

Deterministic computer simulation of physical experiments is now a common technique in science and engineering. Often, physical experiments are too time consuming, expensive or impossible to conduct. Complex computer models or codes, rather than physical experiments lead to the study of computer experiments, which are used to investigate many scientific phenomena. A computer experiment consists of a number of runs of the computer code with different input choices. The Design and Analysis of Computer Experiments is a rapidly growing technique in statistical experimental design. This paper aims to discuss some practical issues when designing a computer simulation and/or experiments for manufacturing systems. A case study approach is reviewed and presented.

The knock-on from the knock-off : recent shifts within Australian mass market fashion design practice

Australia's mass market fashion labels have traditionally benefitted from their peripheral location to the world's fashion centres. Operating a season behind, Australian mass market designers and buyers were well-placed to watch trends play out overseas before testing them in the Australian marketplace. For this reason, often a designer's role was to source and oversee the manufacture of 'knock-offs', or close copies of northern hemisphere mass market garments. Both Weller and Walsh have commented on this practice.12 The knock-on effect from this continues to be a cautious, derivative fashion sensibility within Australian mass market fashion design, where any new trend or product is first tested and proved overseas months earlier. However, there is evidence that this is changing. The rapid online dissemination of global fashion trends, coupled with the Australian consumer’s willingness to shop online, has meant that the ‘knock-off’ is less viable. For this reason, a number of mass market companies are moving away from the practice of direct sourcing and are developing product in-house under a northern hemisphere model. This shift is also witnessed in the trend for mass market companies to develop collections in partnership with independent Australian designers. This paper explores the current and potential effects of these shifts within Australian mass market design practice, and discusses how they may impact on both consumers and on the wider culture of Australian fashion.

Growth of C36-films on diamond surface through molecular dynamics simulation

In this paper, the initial stage of films assembled by energetic C36 fullerenes on diamond (001)–(2 × 1) surface at low-temperature was investigated by molecular dynamics simulation using the Brenner potential. The incident energy was first uniformly distributed within an energy interval 20–50 eV, which was known to be the optimum energy range for chemisorption of single C36 on diamond (001) surface. More than one hundred C36 cages were impacted one after the other onto the diamond surface by randomly selecting their orientation as well as the impact position relative to the surface. The growth of films was found to be in three-dimensional island mode, where the deposited C36 acted as building blocks. The study of film morphology shows that it retains the structure of a free C36 cage, which is consistent with Low Energy Cluster Beam Deposition (LECBD) experiments. The adlayer is composed of many C36-monomers as well as the covalently bonded C36 dimers and trimers which is quite different from that of C20 fullerene-assembled film, where a big polymerlike chain was observed due to the stronger interaction between C20 cages. In addition, the chemisorption probability of C36 fullerenes is decreased with increasing coverage because the interaction between these clusters is weaker than that between the cluster and the surface. When the incident energy is increased to 40–65 eV, the chemisorption probability is found to increased and more dimers and trimers as well as polymerlike-C36 were observed on the deposited films. Furthermore, C36 film also showed high thermal stability even when the temperature was raised to 1500 K.

Molecular dynamics simulation of structural characteristics in metal cluster deposition on surfaces

The deposition of small metal clusters (Cu, Au and Al) on f.c.c. metals (Cu, Au and Ni) has been studied by molecular dynamics simulation using Finnis–Sinclair (FS) potential. The impact energy varied from 0.01 to 10 eV/atom. First, the deposition of single cluster was simulated. We observed that, even at much lower energy, a small cluster with (Ih) icosahedral symmetry was reconstructed to match the substrate structure (f.c.c.) after deposition. Next, clusters were modeled to drop, one after the other, on the surface. The nanostructure was found by soft landing of Au clusters on Cu with increasing coverage, where interfacial energy dominates. While at relatively higher deposition energy (a few eV), the ordered f.c.c.-like structure was observed in the first adlayer of the film formed by Al clusters depositing on Ni substrate. This characteristic is mainly attributive to the ballistic collision. Our results indicate that the surface morphology synthesized by cluster deposition could be controlled by experimental parameters, which will be helpful for controlled design of nanostructure.