Title A Profit Prediction Model in the International Construction Makret - focusing on Small and Medium Sized Construction Companies
Authors Hwang, Geon Wook ; Jang, woosik ; Park, Chan-Young ; Han, Seung-Heon ; Kim, Jong Sung
DOI http://dx.doi.org/10.6106/KJCEM.2015.16.4.050
Page pp.50-59
ISSN 2005-6095
Keywords Early Decision ; Case-Based Reasoning ; International Construction ; Sub Contractor ; Profit Prediction
Abstract While the international construction industry for Korean companies have grown in market size exponentially in the recent years, the profit rate of small and medium sized construction companies (SMCCs) are incomparably lower than those of large construction companies. Furthermore, small and medium size companies, especially subcontractor, lacks the judgement of project involvement appropriateness, which leads to an unpredictable profit rate. Therefore, this research aims to create a profit rate prediction model for the international construction project focusing on SMCCs. First, the factors that influence the profit rate and the area of profit zone are defined by using a total of 8,637 projects since the year 1965. Seconds, an extensive literature review is conducted to derive 10 influencing factors. Multiple regression analysis and corresponding judgement technique are used to derive the weight of each factor. Third, cased based reasoning (CBR) methodology is applied to develop the model for profit rate analysis in the project participation review stage. Using 120 validation data set, the developed model showed 11% (14 data sets) of error rate for type 1 and type 2 error. In utilizing the result, project decision makers are able to make decision based on authentic results instead of intuitive based decisions. The model additionally give guidance to the Korean subcontractors when advancing into the international construction based on the model result that shows the profit distribution and checks in advance for the quality of the project to secure a sound profit in each projec.t