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

Henry Odeyinka, John Lowe

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    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.
    Original languageEnglish
    Title of host publicationUnknown Host Publication
    EditorsJohn Kelly, Kirsty Hunter
    Place of PublicationLondon, United Kingdom
    PublisherRoyal Institution of Chartered Surveyors
    Number of pages11
    Publication statusPublished (in print/issue) - 5 Sept 2001
    EventRICS COBRA Conference - Glasgow Caledonian University, Glasgow, UK
    Duration: 5 Sept 2001 → …


    ConferenceRICS COBRA Conference
    Period5/09/01 → …


    • Construction cash flow
    • contractor
    • mean response analysis
    • risk
    • uncertainty


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