Fluent Essays

Based on your review and analysis of the The Estimating Problem case study (Kerzner, 2017, pp. 499-500), write an essay that addresses the following key elements: · Develop a clear and concise synopsis of the case study.  · Explain how the identified problem affects the projects schedule, cost, and scope.   · In your own words, with cited support from scholarly resources, clearly and concisely define the construct of the schedules critical path. Describe how the identified problem may affect the schedules critical path. · Assess whether the estimating method used was appropriate. If so, what would cause the results to be questionable? If not, what estimating method would you recommend? Substantively justify your response using cited scholarly references. · Assess the pros and cons of the extant estimating process; what, if any, changes would you recommend? Substantively justify your response including scholarly supporting references. (Please note that extant estimating is not a term of art in project management. You need to identify the extant (i.e., existing) estimating process in the organization referenced in the case study. By doing this, you will specify the current state-of-project-management in the area of estimating) Additional Instructions Properly organize your writing by including the following: · Cover page · Introduction · Body of your work in response to the assignments key elements, with headings and subheadings · Conclusion · List of references · Appendices (as applicable). The introduction through conclusion sections of your essay should be approximately 4-5 pages in length. Support your assignment with a minimum of three scholarly references.  TIPS AND HINTS The week’s critical thinking assignment presents a scenario where a company wins a competitive bid and what happens immediately after that.  Here are some common mistakes to watch out for. The third paragraph in the case study (Kerzner, 2017) starts “One of the most critical work packages in the project was estimated at twelve weeks” (p. 500).  Note that the twelve week estimate is for a work package, not the whole project.  References to that duration are for that work package. Take note of the grade level of the employees whose opinion was requested. The word “extant” means existing in this case study. A three point estimate and a triangular distribution are not the same thing in this case study. You have five separate topics to discuss, in addition to your Introduction and Conclusion.  I would expect to see five subheadings for those topics in addition to your Introduction and Conclusion.  JOURNAL OF APPLIED ENGINEERING SCIENCES VOL. 10(23), ISSUE 1/2020 ISSN: 2247-3769 / e-ISSN: 2284-7197 ART.NO. 289 pp. 89-94 FINANCIAL ISSUES IN PROJECT SCHEDULE OF THE CONSTRUCTION INDUSTRY IN PAKISTAN SHAIKH Fazal Ali a,*, ODHANO Nasrullah a, JHATIAL Ashfaque Ahmed b, c a Department of Economics, University of Sindh, Jamshoro, Sindh, Pakistan, email: * [email protected] b Department of Civil Engineering, Mehran University of Engineering and Technology, Shaheed Zulfiqar Ali Bhutto Campus, Khairpur Mirs, Sindh, Pakistan c Department of Materials, Faculty of Civil Engineering, University of Zagreb, 10000 Zagreb, Croatia Received: 06.01.2020 / Accepted: 26.02.2020/ Revised: 09.03.2020 / Available online: 31.05.2020 DOI: 10.2478/jaes-2020-0014 KEYWORDS: Financial issues, Delay; construction industry; Project schedule; project monitoring ABSTRACT: Monetary concerns in structural schemes cause serious ramifications that may impede the expansion of schemes and impact the entire fiscal conditions of any country. The study highlights the issues of finance procrastinates in construction schemes. Aim to find the prominent issues on finance-related hurdles, which lead to production obstructions and to explore do able resolutions to overcome monetary connected production delays. The date was accumulated via a survey-based questionnaire and followed by the survey-based interviews. The responses were concluded from the amalgamation of clients, advisors, bankers, and brokers in the questionnaire. Brokers’ unsteady monetary conditions. Customers’ weak monetary and trade administration hinders in getting financial support from financers besides inflation were found as the most prominent problems. The outcomes highlight customers have the most significant function in reducing the influence of monetary issues regarding scheme procrastination. Suggestions and recommendations to reduce monetary- related procrastinations are presented accordingly. 1. INTRODUCTION Prosticanation is a significant issue in the construction field is also a significant issue to the fulfillment of a scheme. In the view of Shen et al. (2001), most of the constructions schemes often cannot be achieved within the predetermined bond time. The issue of procrastination in schemes is a universal phenomenon across the globe. Just one-eighth of construction agreements were completed within the given timeframe in Austalia the moreover the average time turn over surpasses forty percent (40\%) (Bromilow, 1974). Therefore, the production field in the country (Malaysia) a rapidly developing country is not set apart rest of the world round about 17.3\% of 417 governmental bonds in the country were deemed poor / sick with the delay exceeded to thirteen weeks or deserted Yau and Sambasivan, 2007). The industry of construction is a significant industry that raised an economical increase (Jhatial et al., 2018; Sohu et al., 2018) in Malaysia. Worth of the total contribution of the construction companies to the countrys Gross domestic production ‘GDP’ is prominently totaling for almost 3.3\% of the GDP, in 2005 apart from 600,000 labors and workers (Malbex, 2005). The addition enlarged to 4.6\% in 2007, that is the largest increase right from the year 1999. The industry of construction faces big challenges since it is fundamental to developing wealth, enhancing the excellency of life of the inhabitants via rendering the services of communal and financial infrastructure. in addition to this it connects the entire spectrum of finance along with multiplier impact that makes the other fields healthy and wealthy “The working group of the construction industry on Payment”. The industry of construction is termed the most hazardous, dynamic, vibrant and challenging trade that suffered a momentary turmoil in the years (1997 – 2000) during the crisis of ASEFAN financial turmoil, however, it had enhanced with the passage of time since then. Having said that procrastinations still happen to schemes since the industry is deemed to be famous for poor-risk administration with several schemes fail to meet time frameworks besides the cost targets. The study has purpose to specify the chief problems of monetary- linked problems leading towards building procrastination in the country (Malaysia) to evaluate the distinctions in the perception besides attitude of the four (4) prominent firms parties “brokers, customers, advisors also finance experts such as bankers” about monetary- related procrastination. In addition to this to explore the doable solutions to reduce those types of procrastination. 2. RESEARCH METHODOLOGY When it comes to the constructions, the delay is common phenomena to schemes. In addition to this, the procrastination vary scheme to scheme some proportion of the scheme left behind weeks and months the other beyond the years (Ahmed et al., 2003). ________________________________________________________________ *Corresponding author: SHAIKH Fazal Ali, Department of Economics, University of Sindh, Jamshoro, Sindh, Pakistan, email: [email protected] 89 mailto:[email protected] mailto:[email protected] JOURNAL OF APPLIED ENGINEERING SCIENCES VOL. 10(23), ISSUE 1/2020 ISSN: 2247-3769 / e-ISSN: 2284-7197 ART.NO. 289 pp. 89-94 The delay in building can be elaborated to be time upset both beyond the time and the date according to the contract of scheme that is mutually signed by both parties (Al- Hejji, and Assaf, 2006). Jagbora and Aibinu (2002) explain procrastination as a situation in which the broker and the owner of the scheme collectively lead to the non-completion of schemes within the mutually decided timeframe. Callahan & Bramble (1987) describe the delay as the duration of time in which some proportion of the construction scheme has been prolonged or not accomplished because of the unfavorable circumstances. Therefore, the procrastination is a circumstance in which the work part is being delayed. The procrastination in building schemes head to crucial ramifications that may delay the progress of the building field also impact the entire financial situation of state (s) Manthar et al., 2017). With the accordance of Shen (1997), procrastination in the conclusion and completion of construction schemes can be the major reason for additional costs also loss in the monetary margin or other advantages out of the project. Therefore, procrastination is expensive for both parties: owners or brokers. For a contractor, procrastination is tantamount increasing costs to the expected amount of capital. As for as an owner is concerned loss of potential income. Several types of research (Sohu et al., 2018; Ullah et al., 2018) were carried out to explore the uncommon reasons for procrastination in domestic building projects having the purpose to reduce the duration of delays besides its influence. The major proportion of the survey outcomes (Al-Khalil and Al-Ghafly, 1999; Frimpong and Oluwoye, 2003) illustrate that monetary- related issues. Ahmed et al. (2003), the feasible monetary factors that head to procrastinations in Malaysian construction schemes are the monetary issues of customers. For example, delay in payments economic issues and financial hurdles; the monetary and cash flow issues of a broker; the outer element of weak financial conditions. For instance, inflation and currency rate. More importantly, troubles in getting credit (Keerio et al., 2017) moreover, the scarcity of financial support are the tough monetary-linked factors that were found in the review of the literature. The instigators accumulated nineteen “19” probable factors of monetary-linked scheme procrastination out of the studies carried out by Ahmed et al. (2003) & Keerio et al. (2017), also specified those studies in Table 1 explanation on every kind of Monetary- related reasons are highlighted as follows: The late payment is termed as a malfunction of payer for paying within the specific time exaltation of documentations as presented in the bond (Harris and Fraser, 2003). Both parties are engaged in the procedure of the claim for payment. For instance, customers, brokers, architects, superintending officers, bankers, quantity surveyor besides the other construction experts may reason a payment to be procrastinated. The belated payment by a firm who is engaged in the procedure of making a payment claim can have an impact entirely on the payment of the supply chain. In the view construction field group of working on payment (Gardezi et al., 2014) issues in terms of payment at the superior end the organization lead towards crucial damage on cash steam issue on the string of bonds. The explored reasons for delayed payment are as follows: 1. hold back of amount by customers 2. The weak financial and business administration of customers 3. postponement in assessment and documentation of provisional payment by professional 4. The illogical claims of brokers 5. inadequate records besides information for estimation 6. inexactness of estimation for work completed 7. intense work burden of the expert to assess labor made 8. association of several parties in the procedure of veneration credentials. 2.1 Cash Flow Issues The significant dimension of every cash course administration is to keep away from prolonging the dearth of cash that are happened to have a huge gap between the flows: outflows besides inflows. The flow of cash administration is explained to be a course of examining, adjusting, and evaluating the schemes cash flow. Therefore, the aptly administrated cash flow is momentous for making the delivery as a successful scheme by doing the cash flow evaluating on a routine basis to explore the problems and issues of the cash flow. To evaluate the cash flow scheme the forecasting of the cash flow is the prominent technique to get off from cash flow issues and problems after this area the next significant factor is to strengthen employees techniques to sustain and maintain a sufficient flow of cash for schemes. Hence the well-organized course of the cash flow enhances the cash flow also augment time management of any scheme. On the other hand, poorly, conversely administrated the cash flow illustrates the vice- versa. The reasons for the cash flow of administration is highlighted in the Table 1 below: Table 1. Financial issues Category Division Sub-categories. Sub-division Payment issues the issues of payment The weak monetary and trade administration Hold back of the amount by the customer Infirm clai ms from the end of the broker Procrastination in assessment besides assurance of invalid payment by advisors. Imprecision of the sum for accomplished work Valuation inadequate certification besides valuation Unnecessary engagement of several parties in the course of honoring documentation The bulky workload of advisors for making a valuation for diverse orders The issues related to monetary resources Dealing with several schemes at the same time by brokers’ The fluctuated monetary background of a broker Non-qualified broker underbidding the value of the scheme 90 JOURNAL OF APPLIED ENGINEERING SCIENCES VOL. 10(23), ISSUE 1/2020 ISSN: 2247-3769 / e-ISSN: 2284-7197 ART.NO. 289 pp. 89-94 Scarcity of constant flow of anticipating Poor credit management with both: debtors and creditors Lock-up of the finance The issues related to monetary resources Hurdles in getting advances from i nvestors The budged of state in terms of allocation, not in place The issues concerned with the market Penalty or increment margin while repaying the loan Inflation, labour wages the cost material besides the cost of transportation Increase in foreign trade cost “import plants besides Materials 2.2 Financial Resource Issues: Kaming et al. (1997) found that scarcity of resources is one of the most significant factors that cause procrastination to high- risk schemes in Indonesia. Ubaid (1991) carried out a survey found that the brokers’ assets are one of the prominent determiners when it comes to the function of contractors’ performance that causing procrastination. The assets encompass monetary resources, material resources, tool based resources, and human resources. Hence, just monetary assets are highlighted in the study. According to Rahman et al., (2006) pointed out that scarcity of grants can influence the scheme’s cash flow besides leading to procrastination of the place possession that results in reasons procrastination to the scheme. The elements that could impede inadequate monetary assets are as follow. Hurdles in earning loans from investors. 2. The budget of the state does not place properly. Moreover (Kumaraswamy & Chan 1998) carried a study and identified the main factors of delay in running projects and identified that financial resources are one major cause of delay. 2.3 Issues of market: Ahmed et al. (2003), stated that the intrinsic element of weak economic conditions. For instance, inflation and currency rate could specifically make an influence on the scheme’s cash flow also impacts the time-based performance of the scheme. The reasons for monetary marketplace inconsistency that lead the problems of cash flow in building schemes. For instance, 1. Increase to interest at the time of repayment. 2. The increase rate of material, besides transportation and the wages of labours. 3. Increase of foreign trade margin for importing plants and, material. (Lundin et al., 2015) carried research by using the questionnaire survey and identified that issues at the market also cause a delay in construction projects in Ghana. Delay in payment, inadequate monetary assets, weak cash flow administration besides financial market inconsistency is included in the independent variable. Figure 1. Illustrates the schemes with the explicit connection between the main cause and sub- cause. the figure also shows that the larger the procrastination in terms of payment because of the broker, the more the cash flow issues the greater the length of procrastination; the weak flow of cash administration causes the higher cash flow issues . in addition to this the prolonger the extent of procrastinations the higher the scarcity of monetary assets; larger the inconsistency of monetary area the higher the cash flow problems and finally, the poor flow of cash administration by a customer of building scheme causes a delayed payment to builder, contractor or brokers’. T H E G R E A T E R 1. Payment delay 2. Cash flow problems 3. Lack of financial resources 4. Variability of the financial marketplace The more problem of cash flow The more problem of construction delay Figure 1. Association among the main problem and sub- problems The cash flow of brokers affected by the delayed payment of the customer (Batool & Abbas, 2017). In addition to this inconsistency of the monetary market will entail additional monetary commitment that is away from the worth of contractor for that he is not equipped. Hence, the broker needs to look for extra monetary assets in the gab of advance from banks. In certain cases loan is something tough to earn from banks since the financial institutions have hard rules and regulations of borrow’s monetary condition. Because of delay or malfunction in obtaining loans scarcity of monetary assets at that time can head to the deficits that ultimately cause procrastinations to the scheme. Every variable is connected. The connection between the variable generates a repetitive cycle (Shahbaz et al., 2019). 3. DATA COLLECTION APPROACH The study implemented both approaches: a quantitative and qualitative, and a survey-based questionnaire along with the interview. The questionnaire was carried out to be a numerical method to explore the chief elements of monetary –connected issues. To accumulate the data with a qualitative research method that is the interview better known as the exploratory pilot interview was carried out with an expert on construction for getting the beginning knowledge about the reasons for money related issues in the field of building and construction. The pilot interviews were applied like the arrangement for the design of questionnaire besides the items accumulated out of the review of literature.moreover, the survey of questionnaire stressed on four main divisions of the participants in building schemes that encompass advisors, brokers, customers’ (quantity surveyors and building architects), and financial experts. The questionnaire was given to an unsystematic sample of 152 customers, 254 brokers, and 147 consultants moreover, Eight 8 bankers inhabited. one-month was mandatory for the contributors to return the filled forms of the survey afterward filling it. 91 JOURNAL OF APPLIED ENGINEERING SCIENCES VOL. 10(23), ISSUE 1/2020 ISSN: 2247-3769 / e-ISSN: 2284-7197 ART.NO. 289 pp. 89-94 Having acquired the data was qualified via the survey-based questionnaire eight (8) participants were picked out for following up qualitative research questions (interviews) for the deep-down understanding of their responses which they gave in the questionnaire the interviews were carried out to reinforce their viewpoints. Such type approached was used as the research engaged to explore questions and participants were supposed to provide detail responses towards the significant dimensions of the answers that could be investigated into. The four prominent parties were engaged in building schemes the two participants from every party covered in the following-up interviews. 4. RESEARCH FINDINGS AND RESULTS Forms are given 543 questionnaires 115 questionnaires were accomplished then returned that obtained the entire comeback and response ratio at 19.71\% by summing the 110 collected questionnaire fifty (50) from brokers, sixteen (16) from customers four forms from bankers’ end while forty (40) from advisors. The Table 2 illustrates the feedback ratio of every party the greatest response reached to 45\% obtained from brokers, advisors’ responses (36\%) and customers’response (15\%) besides bankers’ (4\%) wholly the eight interviews were accomplished in which the two participants took part from every party. Table 3 shows a concise summary of the interviewees. 4.1 Payment issues It is illustrated in the Table 4 (brokers’ invalid claim) was highlighted by customers to be the most distinguished reason for delayed payment along with 59, hold back of the amount by customer was scaled 202 by brokers’ ( customers’weak monetary and trade administration” was given 15 by finance experts. The Table 5 defines that brokers’ infirm monetary background was decided by customers bankers and the consultant to be the most distinguished to weak cash flow administration along with attained at sixty-two (62), 17 and 17. Table 2. profile of the Respondents Group Sent Acknowledged No. (\%) No. (\%) Customer 152 28 31 20 Contractor 254 47 50 19 Designer 147 27 40 27 financial expert 8 1 4 4 Sum 543 100 115 100 Table 3. Interviewees’ profiles Examinee Position of Examinee Experience of Examinee in years Banker No. 1 Senior Sales 8 years Banker No. 2 Office manager 13 years Consultant No. 1 Quantity surveyor/staff 9 years Consultant No. 2 Quantity surveyor/staff 9 years Contractor No. 1 Project engineer 19 years Contractor No. 2 Project Manager 23 years Client No. 1 Engineer 9 years Client No. 2 Project manager 19 years Table 4. Causes of payment issues Causes of late payment Score Owner Contractor Designer Banker Total a) customers’ weak monetary and trade administration 58 197 172 15 442 b) Withhold of payment by client/ hold back of the amount 58 202 152 15 427 c) Contractor’s invalid claim/ brokers’ infirm claims 59 153 135 12 359 d) procrastination in terms of valuation and documentation of pro term payment by consultants’ 55 185 127 10 377 e) The inaccuracy of valuation for work done/ the inexactness of valuation for accomplished work. 56 168 113 10 347 f) Insufficient documentation and information for valuation/ Insufficient documentation and information for inadequate certification besides information of valuation 54 170 139 12 375 g) engagements of more than due parties in the procedure of honoring documentation. 48 191 140 14 393 h) intense loads of work of advisors for evaluation for accomplishing wok 41 150 119 10 320 i) misinterpretation of brokers to meet the customers’ necessities of diverse order 43 154 137 10 344 Table 5. Causes of cash flow issues Causes to poor cash flow management Score Owner Contractor Designer Banker Total A) Brokers dealing with several schemes at the same time 58 174 153 11 396 B) Brokers’ inconsistence monetary background 62 195 167 17 441 92 JOURNAL OF APPLIED ENGINEERING SCIENCES VOL. 10(23), ISSUE 1/2020 ISSN: 2247-3769 / e-ISSN: 2284-7197 ART.NO. 289 pp. 89-94 C) untrained supplier underbidding the chime value 61 200 165 10 436 D) Scarcity of frequent cash flow estimating 58 197 155 15 425 E) Weak finance agreement with creditors besides defaulters 57 190 154 13 414 F) the lock-up of capital 56 188 151 16 411 Table 6. Causes of insufficient financial resources Causes to inadequate financial incomes Score Owner Contractor Designer Banker Total a) difficulty in being paid loan from bankers 54 167 151 11 383 b) provision of state’s budget inproper placement 57 181 157 9 404 Table 7. Causes of market problems Causes of financial market instability Score Owner Contractor Designer Banker Total a) increase of margin rate at the time of repaying the loan 54 167 141 11 373 b) increase (the prices of material the wages of labour , the cost of transportation ) 59 197 171 14 441 c) augmentation of overseas trade rate (imported matter besides the plants) 57 179 139 13 388 Table 8. Noteworthy Procrastination caused by fiscal Concerns Financial problems Score Owner Contractor Designer Banker Total delayed payment 58 212 165 15 450 weak cash flow admi nistration 60 211 174 19 464 inadequate fiscal assets 64 198 172 17 451 Monetary fluctuation of market 54 188 161 15 418 4.2 Financial resources issues Significant delays caused by financial issues are shown in Table 6 which shows that the advisors, bankers, and brokers unanimously, settled that hurdles in earning finance from investors were the most significant element that poses inadequate fiscal assets in the field of industry with points/ score at 180, 148, and 14, accordingly. On the contrary, customers agreed that the distribution of the state’s misplacement of the financial plan was the distinguish reason to inadequacy fiscal resources with a ratio of 53\%. Hence the entire outcomes illustrated that hurdles in earning finance from the end of investors were the most distinguish reason to inadequate fiscal assets along with points of 394. Table 7 indicates that in common the element of inflation of material rate, the cost of transportation the wages of workers was the most specific cause towards monetary market inadequacy with the entire ratio at 454. The four certified parties rated the scores (customers, brokers, consultants, and bankers were 61; 211; 164 and 18 respectively. Table 8 explains the most highlighted fiscal problems heading to procrastination in building schemes. It illustrates in the table 8, the weak cash flow administration addition the most to procrastination (score=464), chased by “inadequate fiscal assets” (score= 451), “delayed payment” (score=450) also “fiscal market unsteadiness” (score=418). The Table 9 illustrates that the flow of weak cash administration (score=349) is the majority recurrent reason of postponement happens in the building industry, chased by “delayed payment” (score=232), “inadequate financial assets” (score=231), and “fiscal market flux” (score=228). It settled that “the weak flow of managing” was the core reason for procrastination the four proficient parties, whilst “delayed payment” was just decided by the three specialized parties apart from bankers. There were 66\% of participants approved that customers have the maximum liability to decrease financial-related procrastination, followed by the brokers at 30, counselors at 8, fiscal experts at 5, and the state at just 1. 4.3 Recommended solutions for financial issues Doable resolution to reduce fiscal related procrastination was accumulated at the time of following up interviews. In terms of payment, it was unanimously agreed that customers were supposed to pay an instant payment in the account of the supplier as for as the cash administration flow is concerned the four recommendations and suggestions are given as follow: 1. to construct the market by separating the development of housing into the two divisions to carry guidance on the cash flow administration and fiscal organization. About the flow of cash management, recommendations were proposed to broker also comprised 1) to access the risk administration in administration material, workers, transportation besides maintenance; 2. Being extra vigilant in terms of accommodating the bond besides choosing an upright paymaster; 3 to use the amount bond with financial institutes (banks) and customers. Law supposed to be modified to convey a vivid message to the builders and customers as to transparency the amount. 93 JOURNAL OF APPLIED ENGINEERING SCIENCES VOL. 10(23), ISSUE 1/2020 ISSN: 2247-3769 / e-ISSN: 2284-7197 ART.NO. 289 pp. 89-94 Table 9. Financial-related causes that frequently occur Financial issues Score (rank 1 = most frequent, 4 = least frequent) Client Contractor Consultant Banker Total Delayed payment 30 131 88 8 257 the weak cash flow administration 60 149 134 11 354 inadequate fiscal assets 31 89 88 15 223 The inadequacy of fiscal market 41 79 91 4 215 5. DISCUSSION AND SUMMARY The outcomes indicate the basic cause of fiscal related procrastination is chiefly because of the weak management of the cash of flow companied with delayed payment, inadequate fiscal assets besides monetary market inconsistency. Thoroughly, the brokers infirm fiscal background, customers’ weak fiscal and trade administration, hurdles in earning loans from investors also the rise in prices were found to be the most prominent cause towards each of the four chief elements stated above. Substantially, a broker’s inadequate fiscal background is the particular factor that resorts the weak cash flow administration that could subsequently lead to scheme procrastination. Hurdles in earning loans from investors may cause inadequate fiscal assets in addition to this rise in material prices, transportation and the wages of workers costs can cause fiscal inadequacy to the market place. Interestingly, the finance experts do not approve that the delayed payment to be the fundamental cause of procrastination. This could highlight that financial experts do not agree that the issues of payment are in their financial institutes (banks) if we consider it to be true then the problems of payment are supposed to cause chiefly by the end customers and the prominent suppliers that presented right in the row with the conclusion of Abdul-Rahman et al. (2006) and (Mehr & Omran, 2013). By keeping this view, severe action upon the inappropriate payment trend supposed to be implemented moreover, the duration of the cash flow among all the firms and parties supposed to deemed lawfully. 6. CONCLUSION AND RECOMMENDATIONS The procrastinations of construction can be decreased by exploring the fundamental reasons and causes of fiscal- related issues. Unanimously it considers that customers should accept the highest onus and take the most significant part in reducing the influence monetary- connected building procrastinations. The feasible resolutions in reducing monetary procrastination. For instance to build the market, avoid overextending, to carry out some preparation on the flow of cash administration, for accessing the risk administration, to be extra vigilant to accept the bond to pick upright …