A

Project Phase - 1 Presentation on

“An Economic Study Concerning the Cost Reduction of
Construction Projects Based on Different Optimization
Techniques”
Presented By (Group No. 10)
Mayur D. Kadam
Swaraj R. Pardeshi
Shivam A. Nanhai
Mayur D. Bhamare

Guided By
Prof. P.N. Ghumare
SAVITRIBAI PHULE PUNE UNIVERSITY, PUNE
MET's Institute of Engineering, Adgaon, Nashik- 422003
Civil Engineering Department
2021 – 2022
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

OUTLINE OF PRESENTATION
 Introduction
 Construction
 Construction Industry Overview
 Construction Cost
 Literature Review
 Aim of the Study
 Objectives of Study
 Research Methodology
 Problem Statement
 References Project Phase 1, BE CIVIL (2021-22), Group No. 10
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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

INTRODUCTION
 What is Construction ?
 Construction covers the processes involved in
delivering buildings, infrastructure and
industrial facilities, and associated activities
through to the end of their life. It typically starts
with planning, financing, and design, and
continues until the asset is built and ready for
use; construction also covers repairs and
maintenance work, any works to expand, extend
and improve the asset, and its
eventual demolition, dismantling
or decommissioning. Figure: Construction Site 3
Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

CONSTRUCTION INDUSTRY OVERVIEW

1. Construction industry is an important industry worldwide. The construction industry generally
defined as a sector of the economy. The Industry is playing an important role in economic growth
of the country, but it faces many challenges currently that lead to affect project goal and steady
growth of the economy.
2. Construction is a high hazard industry which comprises a wide range of activities involving plans,
design, constructs, alteration, maintains repairs and eventually demolishes of buildings, civil
engineering works, mechanical and electrical engineering and other similar works.
3. Construction is always complex that make industry susceptible to disputes, delays and cost
exceeding. The construction industry has characteristics that separately are share by other
industries but in combination appear in construction alone.
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IMPORTANCE OF CONSTRUCTION INDUSTRY

 The importance of the construction industry in the economy of any country derives from the
following factors.
1. Scale of the construction industry
2. Sectors
3. Employment
4. Investment
5. Government
6. Private Finance Initiative
7. Health and safety

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

SWOT ANALYSIS OF CONSTRUCTION INDUSTRY

1. Strength 3. Opportunities
a. Employment and training opportunities a. Private sector building continually increase will
b. Demands of construction – Private sector create construction opportunities
housing and commercial buildings b. Financial supports (loan, insurance)
c. Transportation advantages in the country
c. Government policies
d. Skilled Labour availability
e. Sufficient availability of raw materials 4. Threats

2. Weakness a. Long-term market instability

a. High cost b. Current economic situation

b. Management difficulties c. Lack of political willingness

c. Distance between projects and business d. Health and safety

d. Investment e. Environmental regulation

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Project Phase 1, BE CIVIL (2021-22), Group No. 10
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CONSTRUCTION INDUSTRY SECTOR

 One of the most resource-intensive industry sectors in the global economy.

Main Sectors of Construction

Buildings Infrastructure Industrial

Residential Construction Non-residential Construction

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
1. Building Construction

Figure: Residential Construction Figure: Non-residential Construction 8

Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
2. Infrastructure Construction 3. Industrial Construction

Figure: Infrastructure Construction Figure: industrial Construction 9

Project Phase 1, BE CIVIL (2021-22), Group No. 10
MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

CONSTRUCTION PROCESS
Planning

Finance

Legal

Procurement

Design

On-site Construction

Commissioning and Handover

Maintenance, Repair and Improvement

Demolition 10
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CONSTRUCTION COST
 Expense incurred by a contractor for labour, material, equipment, financing, service utilities etc.
plus overheads and contractors’ profit.
 Cost of land, architectural design, fee of consultant and engineer are not construction costs.
 Construction costs form part of the overall costs incurred during the development of a built
asset such as a building.
 Very broadly, construction costs will be those costs incurred by the actual construction
works themselves, and on some projects may be determined by the value of the contract with
the main contractor.
 However, the construction contract may include costs that might not in themselves be considered
literal construction costs (hard costs), such as fees, profits, overheads, and so on.
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TYPES OF COST
Cost

Fixed Cost Direct Cost Sunk Cost

a) Fixed Cost :- Fixed costs are those that do not change throughout the life-cycle of a project.
b) Direct Cost :- Direct costs are expenses that come out of the project budget directly.
c) Sunk Cost :- Sunk costs are those that have been incurred in a project, but have not produced
value towards the project’s objectives.
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FACTORS AFFECTING CONSTRUCTION COST

1) Similar Construction Projects 11) Size and Type of Construction Project

2) Construction Material Costs 12) Location of Construction

3) Labour Wage Rates 13) Engineering Review

4) Construction Site Conditions 14) Contingency

5) Inflation Factor
6) Project Schedule
7) Quality of Plans & Specifications
8) Reputation of Engineer
9) Regulatory Requirements
10) Insurance Requirements
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IMPORTANCE OF COST CONTROL IN PROJECT

MANAGEMENT
 Cost control is the process of monitoring, tracking and controlling the actual cost of any
construction project.
 This includes:
a) Monitoring cost performance
b) Ensuring all changes are correctly submitted
c) Announcing any changes and impact to costs to project stakeholders

Cost
Managem Estimate Determine Control
ent Costs Budget Costs
Process
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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

LITERATURE REVIEW
Sr. Title of Name of
References Highlights
No. Paper Journal
Author studied affordable housing: cost effective
construction materials for economically weaker
Affordable
section. In any populous country shelter for
Housing:
everyone is an emerging need. An experimental
Cost Science
investigation had been made with an aim to
Effective Direct:
suggest a cost effective construction technique in
Arun M. Constructio Materials
1 order to build an affordable house for EWS
et. al. [2021] n Materials Today:
people. In this attempt, various cost effective
for Proceedings
materials such as EPS (Expanded polystyrene),
Economica
coconut shell, Foundry sand, Fly ash were used.
lly Weaker
The cost analysis to cast every slab was made and
Section”,
obtained an optimum cost effective material with
high strength.

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Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Name of
References Title of Paper Highlights
No. Journal
This paper presented a comprehensive
cost comparative analysis of a mass
Analysis of Cost
timber building mainly developed with
Comparison and
cross-laminated timber (CLT). The actual
Effects of
Science construction cost of the project was
Change Orders
Shafayet A. Direct: compared with the modeled cost of the
During
2 et. al. Journal of same building designed as a concrete
Construction:
[2021] Building option. The result showed that the
Study of a Mass
Engineering construction cost of timber building is
Timber and a
6.43% higher than the modeled concrete
Concrete
building. The study was helpful to
Building Project
provide insight into the construction cost
of typical mass timber buildings.

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Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Title of Name of
References Highlights
No. Paper Journal
This paper explored the role of inflation
and how it affects the economy and the
construction industry. It had concluded that
Impact of
Science the inflation rate is neglected in most of the
Inflation
Direct: Ain construction projects economics and
Musarat M. Rate on
Shams budgeting that causes the project cost
et. al. Constructio
3 Engineering overrun as the building materials prices,
[2020] n Projects
Journal labour wages, and machinery hire rates
Budget:
were changing annually. The framework
A Review
was useful for the future budget estimation
model to eliminate project cost overrun
which occurs due to the inflation rate.

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Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Referenc Title of Name of
Highlights
No. es Paper Journal
The aim was to assess the relevance and impact of
the various delay causes on construction projects,
Systematic
to identify the responsible party as well as to
Processing
Science evaluate the effect of using the Building
Framework
Direct: Information Modeling (BIM) on delays. Thus, this
Elhussein for Analyzing
Ain paper promoted the use of a systematic processing
y H. The Factors
4 Shams framework to outline a course for examining delay
et. al. of
Engineeri factors of construction projects in Egypt while
[2020] Construction
ng validating the outcomes through a survey
Projects
Journal questionnaire. This leads to prioritize delay causes
Delays in
and hence to identify the most suitable approach for
Egypt
dealing with construction projects’ delays and their
associated cost impact.
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Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Referenc Title of Name of
Highlights
No. es Paper Journal
Author studied studied time and cost optimization
of construction project using mivan
technology.Mivan is comparatively a new
Time and Journal
construction technology upcoming for successful
Cost of
completion of mass project especially repetitive in
Gulhane Optimization Engineeri
nature. In this paper we have discussed about cost
A. of ng
5 as well as time comparison of mivan technology
et. al. Construction Research
with conventional formwork technology. The
[2018] Project Using and
Mivan technology is appreciably efficient with
Mivan Applicati
cost, quality and time saving as compare to
Technology on
conventional one. The basic ideology is to reach a
sturdy conclusion regarding the superiority of the
two techniques over another.

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Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Title of Name of
References Highlights
No. paper Journal
This study was carried out to identify the factors
affecting construction cost estimation. The
factors were identified based on questionnaire
Internation
Factors survey. Questionnaires were given to 64 experts
al Journal
Affecting in the construction industry to determine the
of Recent
Shabniya Construction importance of construction cost estimation and
Trends in
6 V. Cost to determine the score of each factor. Statistical
Engineerin
[2017] Estimation of analysis was carried out on the feedback of the
g&
Building respondents of the survey. The significance of
Research
Projects each factor used in the questionnaire was
(IJRTER)
determined. The significant factors were
identified using the mean score and their p-
value.

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Title of Name of
References Highlights
No. Paper Journal
The main goals of this paper were
getting buildings constructed or
Reducing Time modified in less time and cost by
and Cost of producing superior wall panels and
Construction improving the properties of normal
Ahmed AL. Projects by Science Direct weight concrete panels. Superior wall
7 et. al. improving the : Procedia panels were new panels that provide
[2016] Properties of Engineering the three properties listed above. The
Precast Normal- results from sample calculations
Weight Wall indicate considerable improvement in
Panels these properties and significant
savings in terms of construction time
and costs.

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Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Title of Name of
References Highlights
No. Paper Journal
Time and cost are two main concerns which
increase importance of cost reduction
techniques. Reduction of cost of
International construction was a constant goal for
Journal of construction industry. One way of reducing
Cost
Mahadik U. Engineering construction cost was to develop innovative
Reduction in
8 et. al. Technology, technologies as well as methodologies to
Construction
[2016] Management increase productivity. This paper covers
Projects
and Applied types of cost, factors affecting cost of
Sciences projects as well as discussion on
achievement of satisfactory results of time
and cost by applying cost reduction
techniques.

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Title of Name of
References Highlights
No. Paper Journal
The aim of project was to finish the projects
on time, within budget and to achieve other
project objectives. It was a difficult task
Internation
Effective undertaken by project managers in practice,
al Journal
Techniques in which include constantly measuring progress,
of Research
Rajguru A. Cost evaluation of plans, and corrective actions
in
9 et. al. Optimization should be taken whenever required.
Engineerin
[2015] of Construction Optimization is a systematic effort made to
g and
Project: An improve profit margins and obtain the best
Technology
Review results under given circumstances. There was
(IRJET)
a Systematic planning and programming with
effective management is necessary for timely
completion of the project.
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Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Title of Name of
References Highlights
No. Paper Journal
The paper deals with an introduction and
implementation of super performing
AICMT: building materials and techniques all in
National terms of energy saving efficiency of the
conference on material, cost efficiency, application
Smart
Dogne N. Alternative & feasibility, availability, vernacular
Construction
10 et. al. innovation characteristics, life span, etc. The paper
Materials &
[2014] Construction provided an overview of the types of
Techniques
Materials & materials available giving a new insight
Techniques into innovative methods and techniques that
will be available, and open new doors for
advancement and improvement in the
construction industry.

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Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Title of Name of
References Highlights
No. Paper Journal
Construction industry deserves the second
largest one in India. The infrastructure growth
of a country depends on the development of
Internation
Research construction industry since it teems with ample
al Journal
Methodology employment potential. Implementation of
Georgekut of
for Material infrastructure projects were usually failing in
ty K. Engineerin
11 Optimization each stage and ultimately failure occur, which
et. al. g Research
in leads to cost and time overrun. The real
[2012] &
Construction problem is construction become difficult since it
Technology
Projects will not complete with in the budget cost and
(IJERT)
time and finally leads to project failure as end
result. The methodology adopted had been
validated by a computer program.

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Contd…
Sr. Title of Name of
References Highlights
No. Paper Journal
This paper was written to fill a void created by
the absence of proper materials management on
construction sites. To managing a productive
National
and cost efficient site efficient material
Construction Conference
management was very essential. Research has
Patel K. Materials on Recent
shown that construction materials and
12 et. al. Management Trends in
equipment may constitute more than 70% of the
[2011] on Project Engineerin
total cost for a typical construction project. This
Sites g&
paper described the main results of survey
Technology
carried out in Ahmedabad that investigated the
material management of 3 well known builders
of Ahmedabad.

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

RESEARCH GAP
 In research work there is lack of study on cost optimization of construction projects.
 Hence it is taken into account for the study. Also, there is lack of research work available on cost
optimization of construction projects.

SIGNIFICANCE OF RESEARCH
 The research will encourage the new approach in construction field.
 The study surely is a step forward in the right direction to achieve economical construction and
low cost housing. it also helpful low income group of peoples.

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

AIM OF THE STUDY

 India is a country where every family dreams of staying in the house they own.
 But with the current increase in the land costs, construction material prices and labour charges,
it is becoming difficult for middle class families to fulfill their dream of living in their own
homes.
 So I thought of putting forward some conclusion that can be helpful for such families to build
the house of their dreams.
 Reduction of cost of construction is a constant goal for construction industry. One way of
reducing construction cost is to develop innovative technologies as well as methodologies to
increase productivity.

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

OBJECTIVES OF THE STUDY

1. To study different construction projects with respect to cost and material this includes
residential project, infrastructure project and industrial project.
2. To minimize total cost of construction projects with respect to different factors. (Direct cost
and Indirect cost).
3. To study cost reduction methods and advance materials for construction projects.
4. To compare cost of projects before and after using advance methods and materials.

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

RESEARCH METHODOLOGY
 Problem statement from literature survey :-

“An Economic Study Concerning the Cost Reduction of Construction

Projects Based on Different Optimization Techniques”
a) Review the existing literature for cost optimization of construction projects,
b) Select different construction projects for conducting study with respect to cost and material,
c) Study the different factors which are responsible for increasing cost of construction projects,
d) Study of direct and indirect cost for reducing total cost of construction,
e) Study of different cost reduction techniques and advance materials,
f) Comparative analysis of different projects with respect to cost,
g) Interpretation of results and conclusion.
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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Introduction

Literature Review

Cost and Material study of Residential, Infrastructure and Industrial Project

Study of Cost Optimization Methods and Advance Materials

Study of Direct and Indirect Cost

Comparative Analysis

Conclusion 31
Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

COST REDUCTION TECHNIQUES

 There are various cost effective techniques of construction. Many of them are also energy
efficient and easily adoptable. Since India is a developing country, the economy haves
importance. There is a need for the adoption of strong, durable, environment friendly,
ecologically appropriate, energy efficient and yet cost effective materials and appropriate
technologies in construction. In construction project reduction in cost can be achieved by some of
the following techniques:
1. Value Engineering
2. Material Management
3. Budgetary Control
4. Cost Optimization Techniques
5. Cost Reduction Techniques at site 32
Project Phase 1, BE CIVIL (2021-22), Group No. 10
 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

CONSTRUCTION PROJECTS FOR CASE STUDY

Sr. No. Project Description Location

“Prangan” Residential Flat

1 Residential
Project (G + 20 Residential Nashik
Project
Building)

Infrastructural Chatrapati Shivaji Maharaj

2 Nashik
Project Uddanpul

3 Industrial Industrial Shed, Sinnar

Sinnar
Project MIDC

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

Phase – II Work
Case Study for Different Projects

Cost Optimization and Cost Reducing Techniques

Comparative Analysis

Results and Conclusion

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 MET's Institute of Engineering, Civil Engineering Department (Project Phase I )

REFERENCES
[1] M. Arun, K. Baskar, B. S. Geethapriya, M. Jayabarathi and R. Angayarkkani, “Affordable Housing:
Cost Effective Construction Materials for Economically Weaker Section”, Science Direct: Materilas
Today: Proceedings, January 2021.

[2] Shafayet Ahmed and Ingrid Arocho, “Analysis of Cost Comparison and Effects of Change Orders
During Construction: Study of a Mass Timber and a Concrete Building Project”, Science Direct:
Journal of Building Engineering, 33, 101856, 2021.

[3] Muhammad Ali Musarat, Wesam Salah Alaloul and M.S. Liew, “Impact of Inflation Rate on
Construction Projects Budget: A Review”, Science Direct: Ain Shams Engineering Journal, 2020.

[4] Hayssam O. Elhusseiny, Ibrahim Nosair and A. Samer Ezeldin, “Systematic Processing Framework
for Analyzing The Factors of Construction Projects Delays in Egypt”, Science Direct: Ain Shams
Engineering Journal, 2020.
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Contd…
[5] Akshay Gulghane, Nikhil Pitale and Sanket Sanghai, “Time and Cost Optimization of Construction
Project Using Mivan Technology”, Journal of Engineering Research and Application, ISSN: 2248-
9622, Volume 8, Issue 8 (Part -II), pp. 70-74. August 2018.

[6] Shabniya V, “Factors Affecting Construction Cost Estimation of Building Projects”, International
Journal of Recent Trends in Engineering & Research (IJRTER), Volume 03, Issue 04, pp. 379-387,
April 2017.

[7] AL Kulabi Ahmed and Hakob Avetisyanb, “Reducing Time and Cost of Construction Projects by
improving the Properties of Precast Normal-Weight Wall Panels”, Science Direct : Procedia
Engineering, Volume 145, pp. 1066 – 1073, 2016.
[8] Urmila A Mahadik, “Cost Reduction in Construction Projects”, International Journal of Engineering
Technology, Management and Applied Sciences, Volume 3, Special Issue, pp. 397-400, September
2015.
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THANK
YOU
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