Time-Cost-Quality Tradeoff Modeling based on Resource Allocation

Read this article. The paper presents an optimization model that enables managers to effectively evaluate trade-offs related to time, cost, and other competing priorities. Pay particular attention to Section 6 as it provides an illustrated example of building a home.

Decision Variables and Assumptions

Relationship among Equipment Productivity, Quality, and Cost

Construction equipment is a crucial factor of construction techniques to increase construction quality, to reduce cost, and to shorten time. In order to calculate construction time variation impacted by equipment, a modified factor to labor productivity caused by equipment (i) is introduced:

\operatorname{PRD}_{(i)}=\operatorname{LPRD}_{(i)} \times \operatorname{DEK}_{(i)} \text {, }       (3)

where \operatorname{PRD}_{(i)} is the actual productivity in activity (i) ; \operatorname{DEK}_{(i)} is a modified factor to labor (i) productivity by changes of construction equipment parameters; \operatorname{LPRD}_{(i)} is labor productivity in activity (i).

A better equipment quality performance will improve construction productivity, so the modified factor \mathrm{DEK}_{(i)} could be derived from the equipment quality \mathrm{EQ}_{(i)} :

\mathrm{DEK}_{(i)}=\mathrm{DEK}_{i}^{\min }+\mathrm{DQK}_{i} \times\left(\mathrm{EQ}_{(i)}-\mathrm{EQ}_{i}^{\min }\right)      (4)

where \mathrm{DQK}_{i}=\left(\mathrm{DEK}_{i}^{\max }-\mathrm{DEK}_{i}^{\min }\right) /\left(\mathrm{EQ}_{i}^{\max }-\mathrm{EQ}_{i}^{\min }\right) .

Construction equipment quality and equipment cost is also assumed as an approximate linear function just like construction material:

\mathrm{EC}_{(i)}=\left[\mathrm{EC}_{i}^{\min }+\mathrm{EQK}_{i} \times\left(\mathrm{EQ}_{(i)}-\mathrm{EQ}_{i}^{\min }\right)\right]       (5)

where \mathrm{EQ}_{(i)}= actual quality level of construction equipment (i) in activity (i), \mathrm{EQ}_{(i)} \in\left(\mathrm{EQ}_{i}^{\min }, \mathrm{EQ}_{i}^{\max }\right) ; \mathrm{EQ}_{i}^{\min }= minimum quality level of construction equipment (i) in activity (i) ; \mathrm{EQ}_{i}^{\max }= maximum quality level of construction equipment (i) in activity (i) ; \mathrm{EQK}_{i}=\left(\mathrm{EC}_{i}^{\max }-\mathrm{EC}_{i}^{\min }\right) /\left(\mathrm{EQ}_{i}^{\max }-\mathrm{EQ}_{i}^{\min }\right) ; \mathrm{EC}_{i}^{\min }= minimum cost of construction equipment (i) in activity (i) ; \mathrm{EC}_{i}^{\max }= maximum cost of construction equipment (i) in activity (i) ; \mathrm{EC}_{(i)}= actual cost of construction equipment in activity (i), \mathrm{EC}_{(i)} \in\left(\mathrm{EC}_{i}^{\min }, \mathrm{EC}_{i}^{\max }\right).

Work overtime usually decreases construction productivity and increases hourly cost rate. Then construction equipment cost \mathrm{EC}_{(i)} will be modified by factor \alpha_{i} :

\begin{aligned} \mathrm{EC}_{(i)}=& {\left[\mathrm{EC}_{i}^{\min }+\mathrm{EQK}_{i} \times\left(\mathrm{EQ}_{(i)}-\mathrm{EQ}_{i}^{\min }\right)\right] \times \alpha_{i} } \\ =& {\left[\mathrm{EC}_{i}^{\min }+\mathrm{EQK}_{i} \times\left(\mathrm{EQ}_{(i)}-\mathrm{EQ}_{i}^{\min }\right)\right] } \\ & \times\left[1+\left(\mathrm{DPK}_{(i)}-1\right) \times \mathrm{EOK}_{i}\right], \end{aligned}        (6)  

where \alpha_{i}= construction equipment cost modification factor during overtime because of extra or additional construction equipment, \alpha_{i}=1+\left(\mathrm{DPK}_{(i)}-1\right) \times \mathrm{EOK}_{i}; \mathrm{EOK}_{i}= productivity decreased rate during overtime per unit time (e.g., hour), normally 20 \%.