Construction Engineering

CVE 581- Construction Engineering
Lecture Note by Olayinka Okeola

University of Ilorin. Ilorin. Nigeria
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Preface
The course is designed to introduce students to processes involved in
project planning, a prerequisite to project execution. The civil engineering
students in particular need a basic background in construction engineering
knowledge and skills to practically build and flourish upon after graduation
through more practical experiences. Construction engineering is planned to
expose the students to the civil engineering projects planning, management
and execution. This is to be accomplished through application of theoretical
basic of project scheduling using CPM and PERT approaches and project
appraisal with engineering economics.
Good relevant textbooks in which practical exercises and homework were
taken from are listed under references and also recommended for further
studies. Project scheduling using CPM/PERT and projects appraisal with
engineering economics were applied to civil engineering infrastructure.
Occupational Health and Safety (OHS) and quality control in construction
works were discussed with case studies. Interactive sessions form part of
the course delivery to ensure students participation and better
understanding. At the end of the course, the students are expected to:
- Know the key members of the building team, their roles and
responsibilities.
- Understand project planning in term of cost, time and scope of work.
- Know work breakdown structure (WBS) and its application.
- Understand project scheduling: CPM and PERT approaches.
- Know the techniques of economic appraisal of projects.
- Understand ownership and operational costs of construction equipment.
- Understanding basic consideration in construction equipment selection.
- Know the importance of safety, duty of care and quality control within the
context of engineering construction works.
- Be well informed on commercial and open softwares for project
management with emphasis on the usage of Microsoft Project.
Acknowledgements
My esteemed students whose inspirations have brought colour and
meaning to this course delivery effort and specifically the following
students for their time and interest: Lukman Adebayo and Adedamola
Afolabi (for equations editing and diagrams) and Blessing Akapa & Muktar
Afodun (for effecting corrections in the equations, texts and diagrams).
October 2012
January 2013 (Revision)
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1. PROJECT MANAGEMENT
An Overview of Construction Industry
The importance of the construction industry in the national development cannot be overemphasized considering
the fact that at least 50% of the investments in various development plans is primarily in construction. It is the next
employer of labour after agriculture in underdeveloped countries, about 10% of labour force. In developed
countries, activities in the industry especially the building/civil works are used as indices of economic growth and
buoyancy or recession. There are two Million businesses in the US operating in the constructing industries. The
value of the UK construction industry was 56.3 billion in 1998 representing 9% of the GDP. The output of the
industry in Nigeria accounts for over 70% of GDP and therefore is a stimulator of national economy. The
construction industry also encapsulates large numbers of specialty trade contractors such as electrical, Plumbing,
Heating, and painting.
The industry can be divided into 3 major types: (1) Building construction done by general contractors (2) Heavy
construction also done by general contractor and specialty contractors (3) construction done by specialty trade
contractors such as electrician, plumber, etc. In most cases general contractors usually assume responsibility for
the entire construction projects and may subcontract aspect that required special skills or equipment. Construction
types can thus be broadly classified as follows:
1. General Building: commercial buildings, offices, stores, educational facilities, government buildings, hospitals,
medical facilities, hotels, apartments, housing, etc.
2. Manufacturing: auto assembly, electronic assembly, textile plants, etc.
3. Power: thermal and hydroelectric power plants, waste-to-energy plants, transmission lines, substations,
cogeneration plants, etc.
4. Water Supply: dams, reservoirs, transmission pipelines, distribution mains, irrigation canals, desalination and
portability treatment plants, pumping stations, etc.
5. Sewerage/Solid Waste: sanitary and storm sewers, treatment plants, pumping plants, incinerators, industrial
waste facilities, etc.
6. Industrial Process: pulp and paper mills, steel mills, nonferrous metal refineries, pharmaceutical plants,
chemical plants, food and other processing plants, etc.
7. Petroleum: refineries, petrochemical plants, offshore facilities, pipelines, etc
Building Team
Building project as a whole is made up of many fragmented units with different professionals performing different
functions because of the diversity and complexity involve in building operation. They share some sort of feedback
relationship because the work of each professional group is depended or related to the other; and are classified
and explained as follows:
Owner or Developer: In business term, this is known as the client and may be an individual or group of person,
local authority, Government or in general anybody recognize as a legal entity. The client engages the services of a
designer which is usually an architect to carry out his wishes. On upon the recommendation of tender by the
architect or surveyor can sign a contract with a contractor.
Architect: This is the man who in front of law has full right to act as design procedure by interpreting the client
requirement into specific design and generally take over the task of seeing that they are carried to a logical
conclusion. Right from take off of the project he is responsible to act and supervise on behalf of the client. He can
appoint clerk of works for the owner whose main responsibility is to ensure compliance with design and material
specification.
Structural Engineers: The engineer carries out structural analysis and design of every member of building part
depending on scope and complexity. They are usually private consultant commission by the client or Architect for
the project.
Mechanical and Electrical Engineer (M&E): The engineer is responsible for the design of electrical and mechanical
services. The design should be completed with details and specification that are readily interpreted by the
contractor. They are also private consultants.
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Quality Surveyor (QS): The QS carry out quantities of all item of work along with cost implication. They prepare the
bill of quantity (BOQ) used in tendering by interested contractors. They can be engaged by both the client and
contractor depending on the scope of work.
Contractor: The contractor carries out interpretation and turns the architect design into reality. They can engage
the services of subcontractor and specialist to contribute to the successful execution of the project.
PROJECT PLANNING
Project planning is fundamentally concern with the cost, time and scope of work. A project has a specific set of
objectives and a definite schedule, budget, and set of performance requirements (Park and Tippett, 1999). Project
plans tend to emerge gradually. They continuously modified and refined in terms of content, structure, and level of
detail. The most useful tool for accomplishing all these tasks is Work Breakdown Structure (WBS). A WBS connects
the entire project together and portrays scope graphically. It then allow resources to be assigned, permits estimate
of times and costs to be developed. Subsequently provide the basis for the schedule and budget.
Scope Management (SM)
SM is basically identifying what need to be done. This is the first step in project planning process. The WBS
identifies all major elements of work and then subdivides into smaller tasks until each task has become a
comfortable size to estimate, execute and monitor. The WBS does not show the sequence in which work is to be
done until after the schedule has been developed. Activity (or task) consume resources and define lengths of time
and expected cost.
Time Management (TM)
TM is basically identifying how long it will take to complete a whole job. The next step in project planning after
identifying all the activities (i.e. elements of work) is to estimate how long each activity will take. All the activities
are then combined to get how long the entire project would take to complete. This take into consideration
estimates of when individual activity is scheduled for completion. Some basic terminologies in time management
and scheduling are:
Critical activity: This is activity with no latitude in both start and finish times. That is if a critical activity does not
finish by the prescribed time, the project overall time line will be affected.
Critical path: This is the longest path in the network and all activities therein are critical activities.
Duration: This is the window of time within which an activity is expected to complete.
Float (or slack): This is the flexibility or latitude with regard to when a specific activity can be worked on.
Forward pass/backward pass: This is the techniques for analyzing the amount of float in the execution of individual
activities. Activities with no float are known as critical activities.
Parallel Activities: These are activities that can be done during the same period of time.
Predecessor Activities: An Activity that must be completed before the Activity under confederation can begin.
Series Relationship: Two Activities that must be done in a particular order, i.e. one must be done before the other.
Cost Management (CM)
CM aims at identifying how much it costs to get the job done. This goes beyond calculating the overall cost of a
project. It also consists of a budget creation and time-scaling of the overall project expenditure. Estimating budget
for project cost involves both the direct and indirect costs. A direct cost is an expenditure specifically and directly
incurred by the execution of the project. These include labour, materials, training, travel and other miscellaneous
costs. An indirect cost is a cost relating to supporting the facilities, general services, and organizational
environment within which the project team function. Example includes fringe benefits, facilities general and
administrative costs.
Project Cost Estimation
Refer students to the following:
Olayinka Okeola (2012) Civil Engineering Practice: A monograph on Civil Engineering Practice. Published by
Scribd.com. Available online at: http://www.scribd.com/doc/84984097/Civil-Engineering-Practice
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Interactive Class Session
1. Name 3 basic construction types.
2. Name key members of building construction team.
3. Explain project planning within the context of work breakdown structure (WBS), scope, time,
and cost management.
4. Enumerate the components of project costs.
5. The construction industry in the Nigerias quest for MDGs accomplishments.
6. The construction industry and the need for the recognition of professionalism.
2. PROJECT SCHEDULING
Network Techniques
The project scheduling cycle starts with the WBS as shown in Fig. 2.1(Park and Tippett, 1999). Scheduling is a
dynamic process as long as the project is progressing. The most common techniques are: Gantt or Bar Chart (Fig.
2.2), Milestone Chart, Line Balance and Networks. Gantt method: This method uses a bar chart to schedule and
monitor progress of the project. It was the first used technique and it is still widely use. Gantt method cannot
indicate dependencies and interrelationships among tasks which are very crucial to project management.
NETWORK ANALYSIS
Program Evaluation and Review Techniques (PERT) and
Critical Path Method (CPM) are network Analysis as the
techniques are commonly called were independently
developed in the late 1950s out of the need of Western
Industrial and Military establishments to plan, schedule
and control complex project. However the techniques
were able to address the shortcomings in Gantt method.
Framework for PERT and CPM
There are essential 6 steps which are common to both the
techniques. These are:
1. Define the project and all of its significant activities or
tasks. The project (made up of several tasks)
should have only a single start activity and a single
finish activity.
2. Develop the relationships among the activities. Decide
which activities must precede and which
must follow others.
3. Draw the Network connecting all the activities. Each activity should have unique event numbers.
Dummy arrows are used when required to avoid giving the same numbering to 2 activities.
4. Assign time and/or cost estimates to each activity
5. Then compute the longest path through the network i.e. which is the critical path.
6. Use the Network to plan, schedule, monitor and control the project.
Fig.2.1: Project scheduling and estimating
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Preparing Activity Network
5 key questions to ask when preparing activity network are:
1. Is this a start activity?
2. Is this a finish activity?
3. What activity precedes this?
4. What activity follows this?
5. What activity is concurrent with this?
Drawing the CPM/PERT Network
Each activity in a CPM/PERT Network is represented by an arrow symbol. Each activity is preceded and succeeded
by an event which is represented as a circle and numbered. i.e.
Definition of term in a network
Networks are combination of all project activities and the events. An event is the starting or ending points for one
or more activities, and an activity is the work required to precede from one event or point in time to another.
Activity uses up resources and consumes time.
Logic Emphasis in Network Construction
Network construction should be based on logical or technical dependencies among activities for e.g: Before activity
beam reinforcement can be started, the activity formwork must be completed. Also network should be built
on the basis of time logic.
Sequence of Activities
Network construction requires two inputs i.e. are the events represent the start or the completion of an activity?
Event completion is generally preferred.
Figure 2.2: Typical Gantt chart (Adapted from Park and Tippett, 1999)
2
Types of Network
Activity-on-node (AON): Nodes represent activities and arrows show precedence relationship.
Activity-on-arrow (AOA): Arrows represent activities and nodes are events for points in time.
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Example 1: A simple network considers a list of 4 activities in a building project:
Activity Description immediate
Predecessors
A Site clearing
B Removal of top soil A
C Setting out B
D Foundation excavation B, C
Immediate predecessors for a particular activity are the activities that, when completed, enable the
start of the activity in question.
Activities A & B can start work since neither depends upon the completion of prior activities.
Activity C cannot be started until B has been completed
Activity D cannot be started until both activities A and C have been completed.
Scheduling with Activity Time
Activity Immediate predecessor Completion Time (week)
A _ 5
B _ 6
C A 4
D A 3
E A 1
F E 4
G D, F 14
H B, C 12
I G, H 2
Total 51
Earliest Start & Earliest Finish Time
The utmost interest in the network is the longest path known as the critical path.
By starting at the networks origin (i.e. nodes) and using a starting time of 0, we can compute an earliest start (ES)
and earliest finish (EF) time for each activity in the network. The expression EF = ES + t can be used to find the
earliest finish time for a given activity. See Figure 2.3 for numenclatures.
For e.g.: For activity A, ES = 0 and t = 5, Thus EF = 0 + 5 = 5
ES Time rule: The earliest start time for an activity leaving a particular node is equal to the largest of the earliest
finish times
It can be observed the total time required
to complete all activities is 51 weeks. We
can also see that several of the activities
can be conducted simultaneously for
example A and B. Hence total completion
time can thus reduce
Activity
C(5, 9)
ES EF
4(8,12)
LF
LS
3
2
Fig. 2.3: Activity, Duration, ES, EF, LS, LF Nomenclatures
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Latest Start and Latest Finish time
We need backward pass calculation to find the critical path.
Starting at the completion point (node 7) and using a latest finish time (LF) of 26 for activity I, we can trace back
through the network computing a latest start (LS) and latest finish time for each activity.
The expression LS = LF - t can be used to calculate latest start time for each activity.
For e.g., for activity I, LF = 26 and t = 2.
Thus LS for activity I is LS = 26 2 =24.
Network with LS and LF time
Latest finish time rule
The LF time for an activity entering a particular node is equal to the smallest of the latest start times for all
activities leaving the node.
Slack (or Free or Float) Time
Slack is the length of time an activity can be delayed without affecting the completion date for the entire project.
For e.g., slack for C = 3 weeks, i.e. activity 3 can be delayed up to 3 weeks.
LF EF = 12 9 = 3
LS ES = 85 = 3
LF ES 4 = 12 5 4 = 3
Activity Schedule Example continue
Activity ES LS EF LF Slack Critical Path
A 0 0 5 5 0 Yes
B 0 6 6 12 6
C 5 8 9 12 3
D 5 7 8 10 2
E 5 5 6 6 0 Yes
F 6 6 10 10 0 Yes
G 10 10 24 24 0 Yes
H 9 12 21 24 3
I 24 24 26 26 0 Yes
Questions:
1. What is the total time to complete the project?
- 26 weeks if the individual activities are completed on schedule.
2. What are the schedule starts and completion times for each activity?
- ES,EF,LS,LF are as given for each activity
3. What activities are critical and must be completed as schedule in order to keep the project on time?
- Critical path activities: A, E, F, G, I.
5. How long can non-critical activities are delayed before they cause a delay in the projects completion time.
- Slack times available for all activities are as given.
Importance of Float and Critical Path
1. Slack or float shows how much allowance each activity has. That is how long it can be delayed without
affecting completion date of project
2. Critical path is a sequence of activities from start to finish with zero slack. Critical activities are activities
on the critical path
3. Critical path identifies the minimum time to complete project
4. If any activity on the critical path is shortened or extended, the project time will be shortened or extended
accordingly.
5. Effort therefore should be put in trying to control activities along critical path so that project can meet
due date.
6. Resources should not be wasted on non-critical activity because it will not shorten the project time
7
I (24, 26)
2
6
7
I (24, 26)
2
6
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Activity on node (AON) format for CPM Network t (Critical Path)
Figure 2.4 depicts a simple CPM network drawn in the activity on node (AON) format. The nodes or circles denote
activity. The connecting arrows show precedence between activities. There are various possible routes through the
network. The longest route defines the predicted total project duration. The activities on this longest route, or
critical path, are called critical activities. Any delay in the execution of these critical activities translates into a delay
in overall project completion. Other non-critical activities have a certain amount of leeway (or slack) associated
with them which allows the project manager some flexibility in scheduling resources. Thus the project manager
should pay special attention to critical activities in making tradeoff decisions, as these are the ones that can
potentially extend the project duration. However, it should be noted that non-critical activities can potentially
become critical if they experience delays greater than their original slack, so the project manager cannot become
complacent
Figure 2.4: Activity on node (AON) format for CPM Network
(Adapted from Park and Tippett, 1999)
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Que 1.
An existing access culvert to COMSIT building on campus is to be demolished. A new 10m long culvert is to be
constructed in its place using 800mm diameter precast ring culvert.
a. Prepare a work breakdown structure (WBS) that follow sequence of implementation.
b. Draw a Gantt chart of implementation.
Que 2.
Ken Johnston, the data processing manager for Stanley Morgan Banks is planning a project to install a new
management information system. He is now ready to start the project, and wishes to finish in 20 weeks. After
indentifying the 14 separates activities needed to carry out this project, as well as their precedence relationships
and estimated duration (in weeks). Ken has constructed the following project network.

1. Find all the paths and path lengths through the project network. Which of these paths is a critical path?
2. Find the earliest times, latest times and slack for each activities. Will Ken be able to meet his deadline if no
delays occur?
3. Use the information from part (2) to determine which of the paths a critical path is. What does this tell Ken
about? Which activities he should focus most of his attention on for staying on schedule?
4. Use the information from path (2) to determine what the duration of the project would be if the only delay is
that:
i. Activity I take 2 extra weeks
ii. What if only delay is that activity H takes 2 extra weeks?
iii. What if the only delay is that activity J takes 2 extra weeks?
0
6
4
3
4
6
3
5
6
5
5
3
0
7
4
4
START FINISH
A
B
C
D
G
E
H
I
J
K
L
M
N
F
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Solution:
(1) The paths and paths length through Stanley Morgan Banks project network
PATH LENGTH
START A D H M FINISH 6+4+3+6 = 19weeks
START A I M FINISH 6+5+6 = 17weeks
START B E J M FINISH 3+7+4+6 = 20weeks
START C F K N FINISH 4+4+3+5 = 16weeks
START C G L N FINISH 4+6+5+5 = 20weeks
Since the critical path is the paths with the longest path lengths thus, paths (iii) and (v) from the above table are
the critical paths. i.e.
(iii) START B E J M FINISH
(v) START C G L N FINISH
(2) Earliest times, Latest time and slacks for each activity
EARLIEST TIMES; ES and EF in weeks
For activity A: ES = 0 EF = 6
Activity B; ES = 0 EF = 3
Activity C; ES = 0 EF = 4
Activity D; ES = 6 EF = 10
Activity E; ES = 3 EF = 10
Activity F; ES = 4 EF = 8
Activity G; ES = 4 EF = 10
Activity H; ES = 10 EF = 13
Activity I; ES = 6 EF = 11
Activity J; ES = 10 EF = 14
Activity K; ES = 8 EF = 11
Activity L; ES = 10 EF = 15
Activity M; ES = 14 EF = 20
Activity N; ES = 15 EF = 20
LATEST TIMES; LS and LF in weeks
For Activity A: LS = 1 LF = 7
Activity B; LS = 0 LF = 3
Activity C; LS = 0 LF = 4
Activity D; LS = 7 LF = 11
Activity E; LS = 3 LF = 10
Activity F; LS = 8 LF = 12
Activity G; LS = 4 LF = 10
Activity H; LS = 11 LF = 14
Activity I; LS = 9 LF = 14
Activity J; LS = 10 LF = 14
Activity K; LS = 12 LF = 15
Activity L; LS = 10 LF = 15
Activity M; LS = 14 LF = 20
Activity N; LS = 15 LF = 20
Critical path with path lengths of 20 weeks each
NOTE
LS = Latest start time and LF = Latest finish
time. LF = LS duration for each activity
(Note The latest finish time for an activity
entering a particular node is equal to the
smallest of the latest start times for all
activities leaving the node)
NOTE
ES = Earliest start time and EF = Earliest
finish time. EF = ES + duration for each
activity. (Note that the earliest start time
for an activity leaving a particular node is
equal to the largest of the earliest finish
time)
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SLACKS AND CRITICAL PATHS
This is to be noted that the activity with zero slack is on the critical path. Slacks = LF EF
[i.e. Latest finish minus Earliest finish] in weeks
For Activity A; Slack= 7 1 = 1
Activity B; Slack = 3 3 = 0
Activity C; Slack = 4 4 = 0
Activity D; Slack = 11 10 = 1
Activity E; Slack = 10 10 = 0
Activity F; Slack = 12 8 = 4
Activity G; Slack = 10 10 = 0
Activity H; Slack = 14 13 = 1
Activity I; Slack = 14 11 = 3
Activity J; Slack = 14 14 = 0
Activity K; Slack = 15 11 = 4
Activity L; Slack = 15 15 = 0
Activity M; Slack = 20 20 = 0
Activity N; Slack = 20 20 = 0
Comment:
Ken will be able to meet his deadline of 20 weeks if no delays occur to any of the activities with the zero slack
i.e. activities that are on the critical path.
(3) Critical paths from the answer in part (b) are the activities with the zero slack which are;
(i) START B E J M FINISH
(ii) START C G L N FINISH
Comment:
For staying on schedule; Ken must focus most on each of the critical activity in the critical paths as shown above.
This means that activities B , C, E, G, J, L, M and N must be handled with no delay in order to stay on schedule.
(4) Using the information in part (b) to determine the project duration with the following
cases:
i. Activity : If activity should takes 2 extra weeks, it would not delayed the project duration of completion
since activity has a slack of 3 weeks which means that the activity can be delayed for 3 weeks without
affecting the project completion time.
ii. Activity : If activity should take 2 extra weeks, it would delay the project completion time because activity
has a slack of 1 week thereby making the duration 21 weeks.
iii. Activity : If activity takes 2 extra weeks, the project would be delayed by 2 weeks since j is a critical path
(slack = 0) thereby making the duration 22 weeks.
ACTIVITY SLACKS CTRITICAL PATHS
A 1 No
B 0 Yes
C 0 Yes
D 1 No
E 0 Yes
F 4 No
G 0 Yes
H 1 No
I 3 No
J 0 Yes
K 4 No
L 0 Yes
M 0 Yes
N 0 Yes
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Stanley Morgans Bank Project Network below. Note: Activity-on-Arrow Network (AON)
THE PERT (PROBABILISTIC) APPROACH
The PERT is used in handling uncertainty. The PERT approach is useful because it can accommodate the variation in
event completion times based on an experts or expert committees estimates.
For each activity, 3 time estimates are used:
The most optimistic (t
o
)
The most likely (t
m
)
The most pessimistic (t
p
)
The duration of an activity is calculated using the following formula:
PERT assumes that the form of the probability distribution is a beta distribution in order to calculate the mean (),
also known as expected time t
e
and variance (
2
) of probability distribution.
6
4
p m o
t t t
+ +
=
2
6
|
|
.
|
\
|
= o
o p 2
t t
Probability Computation:
Although the ts are randomly distributed, the average or expected project length T
e
approximately follows a
Normal Distribution. Since a lot of information about Normal Distribution is known, we can make several
statistically significant conclusions from the calculations.
A (0, 6)
6 (1, 7)
D (6, 10)
4 (7, 11)
C (0, 4)
4 (0, 4)
G (4, 10)
6 (4, 10) 5 (10, 15)
L (10, 15)
3 (11, 14)
H (10, 13)
N (15, 20)
5 (15, 20)
M (14, 20)
6 (14, 20)
J (10, 14)
4 (10, 14)
START
FINISH
(20, 20)
I (6, 11)
5(9, 14)
E (3, 10)
7(3, 10)
B (0, 3)
3(0, 3)
F (4, 8)
4(8, 12)
K (8, 11)
3(12, 15)
0
1
4
9
10
2
5
3
6
8
7
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The probability that a project is completed with specified time is
time specified (proposed) X mean time, standard project mean time, project

= = = =
= Z
e
t
X

Example
Activity
Immediate
Predecessor
t
o
t
m
t
p

2
A - 10 22 22 20 2 4
B - 20 20 20 20 0 0
C - 4 10 16 10 2 4
D A 2 14 32 15 5 25
E B, C 8 8 20 10 2 4
F B, C 8 14 20 14 2 4
G B, C 4 4 4 4 0 0
H C 2 12 16 11 2.32 5.4
I G,H 6 16 38 18 5.33 28.4
J D, E 2 8 14 8 2 4
a
(20,4)
d
(15, 25)
e
(10,4)
j
(8,4)
b
(20, 0)
c
(10,4)
f
(14,4)
g
(4, 0)
h
(11, 5.4)
i
(18, 28.4)
Critical path = 43
Figure 5: The complete network
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5
Critical Path Analysis (PERT Method)
Activity LS ES Slack Critical
a 0 0 0 Yes
b 1 0 1
c 4 0 4
d 20 20 0 Yes
e 25 20 5
f 29 20 9
g 21 20 1
h 14 10 4
I 25 24 1
J 35 35 0 Yes
Question
Refer to Fig. 5, Assume a project manager promised to complete the project in 50 days.
What are the chances of meeting that deadline?
Answer
Calculate Z
Known Parameter: = scheduled date = 20 +15 + 8 = 43

( )
50
33 4 25 4
2
=
= + + = =
X

745 . 5
43 50 X
Z

=

The probability value of Z = 1.22 is 0.888
The project manager can meet the deadline
Question
What deadline is 95% sure of meeting?
Answer:
Z value associated with 0.95% is 1.645
From

=
X
Z

days 45 . 52 43 ) 645 . 1 ( 745 . 5 = + =
+ = Z X
There is 95% chance of finishing the project in 52.45 days
Table 2.1: Comparism between CPM & PERT
CPM PERT
1. Uses network, calculate slack, identify critical path
& activities, guides to monitor and controlling of
project
Same as CPM
2. Use one value of activity time Require 3 estimates of activity time
Calculates mean & variance of time
3 Used where times can be estimated with certainty Used where time cannot be estimated with certainty
4 Minimizing cost is more important Meeting time target or estimating percentage
completion is more important
5 Example: Construction project Example: Research and Development
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1. Give basic comparison between CPM (critical path method) and PERT (program evaluation and review
technique).
2. Work Example:
Bill Fredlund, president of Lincoln Log Construction, is considering placing a bid on a building project. Bill has
determined that five tasks would need to be performed to carry out the project. Using the PERT three-estimate
approach, Bill has obtained the estimates in the next table for how long these tasks will take. Also shown are
the precedence relationships for these tasks. There is a penalty of $500,000 if the project is not completed in
11 weeks. Therefore, Bill is very interested in how likely it is that his company could finish the project in time.
(a) Construct the project network for this project.
(b) Find the estimate of the mean and variance of the duration
of each activity.
(c) Find the mean critical path.
(d) Find the approximate probability of completing the project
within 11 weeks.
(e) Bill has concluded that the bid he would need to make to have a realistic chance of winning the contract
would earn Lincoln Log Construction a profit of about $250,000 if the project is completed within 11 weeks.
However, because of the penalty for missing this deadline, his company would lose about $250,000 if the
project takes more than 11 weeks. Therefore, he wants to place the bid only if he has at least a 50 percent
chance of meeting the deadline. How would you advise him?
TIME REQUIRED (WEEKS)
TASK IMMEDIATE OPTIMISTIC MOST LIKELY PESSIMISTIC
PREDECESSOR ESTIMATE ESTIMATE ESTIMATE

A 3 4 5 4 1/9 1/3
B A 2 2 2 2 0 0
C B 3 5 6 4.83 1/4 1/2
D A 1 3 5 3 4/9 2/3
E B , D 2 3 5 3.17 1/4 1/2
17 1.056 2
(a) The project network for the above project is as shown next page
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(b) To obtain the estimate of the mean and variance
6
4
p m o
t t t
mean
+ +
= and
2
2
6
variance
|
|
.
|
\
|
=
o p
t t
( )
4
1
6
2 5
17 . 3
6
5 3 4 2
E; activity
2
2
= |
.
|
\
|
=
=
+ +
=
For
(c) Obtaining the mean critical path of the project:
Paths of the project Mean path length
START A B C FINISH 4 + 2 + 4.8 = 10.8
START A B E FINISH
START A D E FINISH
Activity path: Start A B C Finish is the activity with the mean critical
path.
(d) Appropriate probability of completing the project within 11 weeks will be;
weeks x
x
Z 11 ; =

( )
( )
( )
( )
9
4
6
1 5
3
6
5 3 4 1
D; ac
4
1
6
3 6
83 . 4
6
6 5 4 3
C; activity
0
6
2 2
2
6
2 2 4 2
B; activity
9
1
6
3 5
4
6
5 4 4 3
A; activity
2
2
2
2
2
2
2
2
= |
.
|
\
|
=
=
+ +
=
= |
.
|
\
|
=
=
+
=
= |
.
|
\
|
=
=
+ +
=
= |
.
|
\
|
=
=
+ +
=
tivity For
for
for
For
FINISH START
(4,1/9) (2,0) (4.83,1/2)
(3,4/9)
(3.17, 1/4)
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For the mean critical path;
6 . 0
36
13
36
13
4
1
0
9
1
83 . 10 83 . 4 2 4
2
2
= = =
= + + =
= + + =

Therefore 2833 . 0
6 . 0
83 . 10 11
=
= Z
Checking from the probability tables; the probability of completing the project
= 0.61153
= 61%
This means that the approximate probability of the project completion within 11 weeks will be 61%.
(e) For the duration of meeting a 50% chance of the deadline of 11 weeks for the project;
For at least a 50% chance;
Probability = 1 Pr (50%)
P
50
= 1 (0.5)
P
50
= 0.5
Checking from the table,
The value of Z corresponding to a probability of 0.5 is 0
That is Z = 0
Substituting into the equation;
weeks. 83 . 10
6 . 0
83 . 10
0
0.6; and 10.83
=
=
= =
=
x
x
where
x
Z

This implies that Bill has a 50% chance at least of meeting the bid deadline in 10.83 weeks which is less than the
project deadline of 11 weeks. So, Bill can go ahead and make his bid and have a realistic chance of winning the
contract and earn Lincoln Log Construction a profit of about $250,000.
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3. OCCUPATIONAL HEALTH AND SAFETY (OHS) IN THE
CONSTRUCTION INDUSTRY
Occupational Health and Safety (OHS) in construction is all about protecting people from injury at work or from
becoming ill through appropriate precautions. A safe, healthy and productive workforce is needed to achieve the
objective of national development and economic growth since construction industry is a stimulator for national
economy. However, each sector of the industry has its distinct hazards and risks determined by the peculiarities of
its labour process.
We are going to examine:
1. the concept of hazard and risk as cornerstone of effective OHS management.
2. the laws regulating OHS matters.
3. the state of OHS practices on the University of Ilorin construction sites and typical active site outside the
campus. The aim is to investigate current safety practices on the site; identify the nature and occurrence of
hazards; and the extent to which safety measures are employed.
Required material:
1. Okeola, O.G. (2009) Occupational Health and Safety Assessment in the Construction Field. Proceedings of 1st
Annual Civil Engineering Conference, (Aug. 26th 28th 2009). Pp 32 - 40. Department of Civil Engineering,
University of Ilorin, Nigeria
Available online at: http://www.scribd.com/doc/76525917/Occupational-Health-and-Safety-OHS-
Assessment-in-the-Construction-Industry-By-Okeola-O-G
2. Safety, health and welfare on construction sites: A training manual. Geneva, International Labor Office, 1995
/Trainers manual/, /Occupational safety/, /Occupational health/, /Construction industry/. 13.04.2 ISBN 92-2-
109182-1
Attention:
Students are urged to participate actively in all the interactive component of this topic both in the class and on
construction sites proposed for visitation
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HOMEWORK
Que. 1:
Sharon Lowe, vice president for marketing for the Electronic Toys Company, is about to begin a project to design
an advertising campaign for a new line of toys. She wants the project completed within 57 days in time to launch
the advertising campaign at the beginning of the Christmas season. Sharon has identified the six activities (labeled
A, B, . . . , F) needed to execute this project. Considering the order in which these activities need to occur, she also
has constructed the following project network. Using the PERT three-estimate approach, Sharon has obtained the
following estimates of the duration of each activity.
a. find the estimate of the mean and variance of the duration of each activity.
b. Find the mean critical path.
c. Use the mean critical path to find the approximate probability that the advertising campaign will be ready to
launch within 57 days.
d. Now consider the other path through the project network. Find the approximate probability that this path will
be completed within 57 days.
e. Since these paths do not overlap, a better estimate of the probability that the project will finish within 57 days
can be obtained as follows. The project will finish within 57 days if both paths are completed within 57 days.
Therefore, the approximate probability that the project will finish within 57 days is the product of the
probabilities found in parts (c) and (d). Perform this calculation. What does this answer say about the accuracy
of the standard procedure used in part (c)?
Optimistic Most Likely Pessimistic
Activity Estimate Estimate Estimate
A 12 days 12 days 12 days
B 15 days 21 days 39 days
C 12 days 15 days 18 days
D 18 days 27 days 36 days
E 12 days 18 days 24 days
F 2 days 5 days 14 days
FINISH
B D
A C E F
START
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Que. 2
Alfred Lowenstein is the president of the research division for Better Health, Inc., a major pharmaceutical
company. His most important project coming up is the development of a new drug to combat AIDS. He has
identified 10 groups in his division which will need to carry out different phases of this research and development
project. Referring to the work to be done by the respective groups as activities A, B, , J, the precedence
relationships for when these groups need to do their work are shown in the following project network. To beat the
competition, Better Healths CEO has informed Alfred that he wants the drug ready within 22 months if possible.
Alfred knows very well that there is considerable uncertainty about how long each group will need to do its work.
Using the PERT three-estimate approach, the manager of each group has provided a most likely estimate, an
optimistic estimate, and a pessimistic estimate of the duration of that groups activity. Using PERT formulas, these
estimates now have been converted into estimates of the mean and variance of the probability distribution of the
duration of each groups activity, as given in the following table (after rounding to the nearest integer).
1. Find the mean critical path for this project.
2 Use this mean critical path to find the approximate probability that the project will be completed within
22 months.
3. Now consider the other three paths through this project network. For each of these paths, find the
approximate probability that the path will be completed within 22 months.
4. What should Alfred tell his CEO about the likelihood that the drug will be ready within 22 months?
Duration
Activity Estimated Mean Estimated Variance
A 4 months 5 months
B 6 months 10 months
C 4 months 8 months
D 3 months 6 months
E 8 months 12 months
F 4 months 6 months
G 3 months 5 months
H 7 months 14 months
I 5 months 8 months
J 5 months 7 months
START FINISH
C F
D G
A E
B H
I
J
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(A) The Use of Computer Software in project management using PERT/CPMapproaches
i. General introduction
ii. Using both MS Project and other Excel template to handle the COMSIT culvert project on page 5.
(B) Uncertain activity duration
i. Dealing with uncertainty activity duration.
ii. Time-cost tradeoff for individual activities
Crashing
Crashing an activity
Crashing the project
(C) An overview of CPM/PERT
(1) How is the uncertainty in activity duration handled by the PERT?
i. Using 3 different types of activity duration namely most likely, optimistic
and pessimistic estimates.
ii. PERT assumes that the form of the probability distribution is a beta distribution
which is used to calculate mean and variance.
(2) What are the major deficiencies/shortcomings for some applications? These include:
i. Approximations of means and variance of activity durations
ii Approximation of the probability of meeting the deadline
iii Dealing with overlapping activities
iv. Incorporating the allocation of resources to activities.
Required material:
Chapter 22: Project Management with PERT/CPM
www.mhhe.com/hillier
Introduction to Operation Research. 9th Edition
F. S. Hillier
G. J. Lieberman
McGraw-Hill International Edition
Attention:
Lecture delivery will largely be interactive, hence Students are urged to participate actively and ask questions or
make contributions.
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4. ENGINEERING ECONOMICS
Techniques for the economics appraisal of project
Engineering project planning involves making choices among physically feasible alternatives; generally these
choices are made on economic grounds by placing a monetary value on each alternative course of action (or
project)
The concept of interest
Because of interest money is worth more today than sometime in the future. Interest can be defined as the money
that must be paid for the use of borrowed money. For public sector projects the government normally set the
minimum acceptable rate.
Cash flow series
Because of interest money has
different values through time. Cash
flow diagram provide a rationale,
simple way of showing how money
flows through time. A normal cash flow
transaction consists of series of
disbursement or receipts. The present
worth of any stream of payments can
be found by calculating the present
value of each individual payment and
summing the results. Once the present
worth is found, one can make other
equivalence calculations, such as
calculating the future worth by using
the interest factors. Cash flow
transaction can be grouped into 3
categories: (1) equal cash flow series,
(2) linear gradient series, and (3)
geometric gradient series.
Figure 4.1: Three major categories of cash flow
Uniform series: This is transaction arrangement of equal cash flows at regular intervals known as an equal-
payment (fig. 6a). Linear gradient series: The transaction arrangement in which the cash flow in a series increases
(or decreases) by a fixed amount (for 6b). Geometric gradient series: This is another type gradient series in which
the cash flow is determined, not by fixed amount like N500, but by some fixed rate, expressed as a percentage (fig.
6c).
DERIVATION AND USE OF BASIC INTEREST FORMULA.
Compound interest: Single payment
Present worth and future worth
Compound interest is interest computed on both the principal and interest outstanding for a given time period.
Define as follow:
i = interest rate for a given compound interest time period, expressed as a decimal;
n = number of time periods
p = present amount of money;
f = future amount of money at the end of period n.
If one were to deposit NP in a bank today, and earn compound interest for n time period, how much would be
available to receive at the end of period n?
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4
Calculation as follow:
End of period Amount Available
0 P = p
1 P(1+i) = P(1+i)
2 P(1+i) (1+i) = p(1+i)
2
3 P(1+i)
2
(1+i) = p(1+i)
3
. .
. .
. .
n P(1+i)
n-1
(1+i) = p(1+i)
n
Example:
Compute the present amount (P) that would be equivalent to the two receipts (in Naira) shown in the cash flow
diagram. The compound interest rate for a period is 5%.
Solution ( ) ( ) 8 %, 5 , 1000 3 %, 5 , 2000 F P F P P + =
Ref. Eqtn. (4.3) Ref. Eqtn. (4.3)
( ) ( )
8 3
05 . 0 1 1000 05 . 0 1 2000

+ + + =
( ) ( ) 676839 . 0 1000 863838 . 0 2000 + =
84 . 676 68 . 1727 + =
52 . 404 2 N =
Present Value of Arithmetic Gradient Series
These are annual series with constant increasing values such that
( )
( )G n G A A
G G A A
G G A A
A
n n
1

2
0
1
2 3
1 2
1
= + =
= + =
= + =
=

The cash flow diagram is as shown and G is called the gradient
F = p (1+i)
n
(4.1)
(1+i)
n
= single-payment compound amount factor
= (F/p, i, n) (4.2)
OR F = P(F/P, i, n)
Equation (1) can be used to solve for P in terms of F:
P = F (1+i)
-n
(4.3)
(1+i)
-n
= single-payment present worth factor
= (P/F, i, n) (4.4)
OR P = F(P/F, i, n)
G
2G
3G
(n-1)G
1 2 3
P=?
. . . n
The present value is
( )
( )
( ) n i G P G P
i i
in i G
P
n
n
, ,
1
1 1
2
=
+
+
=
(4.5)
P 1 2 3 4 5 6 7 8

2000 1000
0 1 2 3 4
A
1
A
2
A
3
A
4
G
1 2 3 4
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5
1. Present worth factor
A
0
( )
( ) (
(
+
+
=
n
n
i i
i
A P
1
1 1
.(4.6)
P= A( P/A, i, n)
2. Capital Recovery Factor
( )
( ) (
(
+
+
=
1 1
1
n
n
i
i i
P A .(4.7)
4. Sinking Fund Factor 3. Compound Amount Factor
A
STANDARD CASH FLOW SERIES
Uniform series
The uniform series present worth factor (pwf); i.e. (P/A, i, n) finds the present worth of a uniform series of n
receipts or payments of amount A each period while the uniform series capital recovery factor, (crf); i.e. (A/P,i, n)
permit calculation of the uniform series amount, A, that will recover an initial capital investment, P, in n periods.
The uniform series compound amount factor (caf); i.e. (F/A, i, n), is used to find the future worth of a uniform
series, A, while the uniform series sinking factor (sff), (A/F, i, n), permits calculation of the uniform series amount,
A, that must be deposited to finance a future capital investment, F, in period n.
Uniform series are common in Civil and Environmental engineering and few examples include:
1. Operation and maintenance costs
2. Estimated benefit stream from a project
3. Annualized capital costs
Uniform series Equivalence Formulas
A=?
n
P? P
A = P (A/P, i, n )
A=?
0 n 0 n
F=? F=?
.(4.8)
( ) (
(
+
=
1 1
n
i
i
F A .(4.9)
F = A (F/A, i, n) A = F ( A/F, i, n)
( )
(
(
+
=
i
i
A F
n
1 1
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Capitalized Cost
Major infrastructural facilities are expected to keep on delivering their service in perpetuity. Examples include
highways, dam, auditorium etc. Such facilities require periodical maintenance, renovation or replacement to
maintain an acceptable level of service delivery. Capitalized cost of such project is the amount of money required
to set aside now to provide for service delivery in perpetuity.
Let A= amount to be spent to maintain perpetual service. The initial principal must therefore be large enough such
that A = Pi (4.10)
=P ( A/P, I, )
Rearranging (4.10) : P = A/i
=A (P/A, I, )
Where: (A/P, I, ) is the uniform series capital recovery factor for an innite series, equal to the interest rate, i and
(P/A, I, ) is the uniform series present worth factor for an infinite series, which is = 1/i.
In the case of construction project, there is first an initial cost of construction and secondly a periodic maintenance
cost that doesnt incurred annually, rather after certain number of years. The initial cost is easily handled, however
the periodic maintenance (cost) would have to be resolved into its equivalent annual series before it can be
capitalized.
The geometric gradient series
The geometric gradient series is useful in cases of double compounding. For example when benefits from a
project grow at a compound rate and are themselves subject to compound interest (e.g. hydroelectric generation
benefits may grow at a compound rate equal to that of a regions economy, while the benefit itself is compounded
financially.
Example:
A project has a net income of $50 the first year, increasing by $100 every year for the next four years. What is the
net present worth of this project at an interest rate of 10%?
Answer:
The annual income is determined according to an arithmetic series above. The following cash flow diagram
presents the model for this example.
The cash flow can be broken into two cash flows as shown
1 2 3 4
50
150
250
350
100
200
300
4
50
+
0
0 0
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From Eqtn. 4.5 From Eqtn. 4.6
QUE 1:
A city wants to set aside enough money to build, operate, and renovate a sewage treatment plant in perpetuity. An
engineering company estimates that the plant will cost an immediate $20 million to build and will require $5
million every 20 years to replace major equipment and $10 million every 50 years to pay for major structural
renovation. It is estimated that operation and maintenance costs will be $1.5 million every year. What amount will
the city need to set aside? Interest earned on the annuity is 7%.
Answer:
The cash flow diagram is as shown below

$1.5m $1.5m $1.5m

$5m $5m $5m
$10m $10m $10m $10m

$20m $20m
$1.5m $1.5m
$5m $10m $10m
P =?
20 50 60 100 80
( )
( ) ( )
( ) ( )
3 . 596 $
170 . 3 50 378 . 4 100
4 %, 10 , 50 4 %, 10 , 100
4 , 50 , 100
:
, , , ,
=
+ =
+ =
= = =
|
.
|
\
|
+ =
A P G P PV
n and A G
where
n i
A
P
A n i G P G PV
+
P=?
P
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Spreading out each $5m and $10m to the left over the preceding 20years and 50years respectively, we have an
annual infinite series as shown below:
Therefore;
|
.
|
\
|
= n i
F
A
F , , A
1
Where |
.
|
\
|
n i
F
A
, , is the sinking fund factor
So that:
|
.
|
\
|
= 20 %, 7 , 000 , 000 , 5 $ A
1
F
A
( ) 1 1
5,000,000
+
=
n
i
i
( ) 1 07 . 0 1
07 . 0
5,000,000
20
+
=
02439 . 0 5,000,000 =
121,964.63 $ A
1
=
|
.
|
\
|
= 50 %, 7 , 000 , 000 , 10 $ A
2
F
A
( ) 1 1
10,000,000
+
=
n
i
i
( ) 1 07 . 0 1
07 . 0
10,000,000
50
+
=
3
10 46 . 2 10,000,000
=
50 . 598 , 24 $ A
2
=
n=50
$10m
A1
n=20
$5m
A1 A1 A1 A1 A1 A1 A1 A2 A2 A2 A2 A2 A2 A2
0
P
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2
9
|
.
|
\
|
=
i
A
rth Present Wo
So that 86 . 342 , 742 , 1 $
07 . 0
1
964 , 121 $ P
1
= =
14 . 407 , 351 $
07 . 0
1
5 . 598 , 24 $ P
2
= =
For $1.5million operation and maintenance, series present worth factor is applied so that:
|
.
|
\
|
= n i
A
P
A %, , P
3
Where |
.
|
\
|
n i
A
P
%, , = series present worth factor
Therefore,
( )
( )
n
n
i i
i
A
+
+
=
1
1 1
P
3

( )
( )
50
50
07 . 0 1 07 . 0
1 07 . 0 1
000 , 500 , 1 $
+
+
=
44 . 119 , 701 , 20 $ =
Total cost =
3 2 1 0
P P P P + + +
where 000 , 000 , 20 $ P
0
=
9.44 $42,794,86
.44 20,701,119 351,407.14 86 1,742,342. 20,000,000
=
+ + + =
QUE 2:
A flood control project has a construction cost during the first year of $10 million, during the second year $6
million, and during the third year $2 million. It is completed at the end of the third year and thereafter incurs an
annual operating cost of $200000 per year. Benefits from the project also begin during the fourth year and are
valued at $1.5 million in that year, growing at a 2% compound rate of increase out to the planning horizon of 50
years. The interest rate is taken to be 6%. Carefully draw the cash flow diagram. What is the present worth of cost?
What is the present worth of benefit? Is this a viable project economically?
PWC
$1.5m $1.5m $1.5m
1
6 5 2 3 4
$10m
$6m
$2m
$
2
0
0
,
0
0
0
$
2
0
0
,
0
0
0
$
2
0
0
,
0
0
0
$
2
0
0
,
0
0
0
$
2
0
0
,
0
0
0
n = 50
$
2
0
0
,
0
0
0
Therefore, the city needs to set aside
$42,794,869.44 for the project.
0
P
a
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3
0
Eqt. 4.3
Present worth of cost (PWC)
|
.
|
\
|
(
|
.
|
\
|
+ |
.
|
\
|
+ |
.
|
\
|
+ |
.
|
\
|
= 3 %, 6 ,
P
47 %, 6 ,
P
$200,000 3 %, 6 ,
P
$2m 2 %, 6 ,
P
$6m 1 %, 6 ,
P
$10m PWC
F A F F F
P=? n=1 Present worth Eqn. 4.3
P = A (P/A, i, n)
i = 6%
$10m
So that.
( ) ( ) ( )
( )
( ) ( )
3 47
47
3 2 1
06 . 0 1
1
06 . 0 1 06 . 0
1 06 . 0 1
000 , 200
06 . 0 1
1
000 , 000 , 2
06 . 0 1
1
000 , 000 , 6
0.06 1
1
10,000,000 PWC
+
+
+
+
+
+
+
+
+
=
( )
( ) (
(
+
+
=
n
n
i i
i
A P
1
1 1
74 . 769 , 617 , 2 $ 57 . 238 , 679 , 1 $ 64 . 978 , 339 , 5 $ 3 . 962 , 433 , 9 $ + + + =
21 . 949 , 070 , 19 $ =
Present worth of Benefit
|
.
|
\
|
|
.
|
\
|
= 3 %, 2 ,
F
P
47 %, 2 ,
A
P
$1.5m PWB
( )
( ) ( )
3 47
47
02 . 0 1
1
02 . 0 1 02 . 0
1 0.02 1
1,500,000 PWB
+
(
(
+
+
=

( )
( ) (
(
+
+
=
n
n
i i
i
A P
1
1 1
eqt. 4.6
3.93 $42,809,58 PWB =
9.21 $19,070,94 - 3.93 $42,809,58 PWC - PWB =
4.72 $23,738,63 PWNB =
The project is viable economically because PWB
is greater than PWC by an appreciable amount as
shown.
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DEPRECIATION
Introduction
In practice, economics decisions are complicated by such considerations as taxes, possible tax deductions (one of
which is depreciation of an asset) and inflation.
Depreciation represents the decline in market value of properly (for example equipment) due to age, wear,
deterioration and obsolescence. Depreciation can result from:
1. Physical deterioration occurring from wear and tear of the properly (i.e. machine)
2. Economic decline or obsolescence occurring over the passage of time.
Depreciation is defined as the allocation of the cost of an asset over its useful or depreciable life for tax purposes
minus salvage value. Thus
D
total
= P S
Where :
D
total
= total depreciation allowable over time,
P = initial asset value or cost
S = salvage value
There are three methods of calculating depreciation of equipment. The book value of an asset in year n is its initial
cost of value minus any depreciation charges taken up to that time.
Straight-line depreciation
The annual depreciation charge is assumed a constant amount chosen to produce a book value of S at the end of
year N:
( ) S P
N
SLD
t
=
1
SLD
t
= straight line depreciation taken at the end of year t and N = useful lifetime.
Example
A wheelbarrow is purchased for N10.000 and is to be depreciated over five years. Salvage value at the end of year
5 is N1000. Using straight line depreciation, what is the annual depreciation charge and schedule of book value?
Solution : ( ) 1800 1000 000 , 10
5
1
N SLT = =
Annual Depreciation is N 1800
Which gives a schedule for book value as follows :
Year Book Value (N) Depreciation Amount (N)
1 10,000 1800
2 8,200 1800
3 6,400 1800
4 4,600 1800
5 2,800 1800
6
1,000
(salvage value)
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Sum of the years digits depreciation
This method uses larger depreciation amounts early in time and thus allows larger tax deduction early resulting in
early savings. The method uses the sum of the years digits for the planning duration period N :
) 1 (
2
) 1 ( 3 2 1 + = + + + + + = N
N
N N digits years the of sum Total
And depreciation for the end of year t is calculated thus:
( ) S P
digits s year the of sum total
t year of beginning at remaining life useful
SOYDD
t
=
'
( ) S P
N N
t N
+
+
=
) 1 )( 2 / (
1
Where SOYDD
t
= sum-of-the-years- digits depreciation at the end of year t.
Example
Compute the SOYDD
t
depreciation for the same example P = N 10,000, S = N1000, N = 5
Solution:
15 ) 1 5 (
2
5
) 1 (
2
5 4 3 2 1
1
= + = + =
+ + + + =
N
N
SOYDD
( )
( ) 600 1000 000 , 10
15
1 1 5
3000 1000 000 , 10
15
1 1 5
5
2
=
+
=
=
+
=
SOYDD
SOYDD

Sum = N 9000
Total depreciation is N 9000, leaving only salvage value at the end of year N = 5. Note the higher SOYD
depreciation values in year1 and 2 as compared with straight line depreciation (N 1800 every year)
Declining balance depreciation
Declining balance (DB) depreciation is based on taking a constant current book value as the depreciation amount
every year. Double declining balance depreciation (DDBD) uses the fraction 2/N
) (
2
) (
2
) (
2
date to taken on depreciati total P
N
BV
N
value book
N
DDBD
t t
= = =
Worked Example
A bulldozer with initial cost of $20000 is to be depreciated over 8 years using straightline depreciation. Salvage
value is estimated at $2000. What is the annual depreciation charge and schedule of book value?
Also compute the depreciation and schedule of book value using (1) SOYD (2) DDB
( ) S - P
N
1
SLDt = N = useful lifetime; P = initial lifetime
Where: N = 8years, P = $20,000 and S = $2,000
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( ) 250 , 2 $ 000 , 2 000 , 20
8
1
SLDt = =
Year Book value Depreciation Amount
1 $20,000 $2,250
2 $17,750 $2,250
3 $15,500 $2,250
4 $13,250 $2,250
5 $11,000 $2,250
6. $8,750 $2,250
7 $6,500 $2,250
8 $4,250 $2,250
$4,250 $2,250
(Salvage value)
1. Sum of Years Digit Method (SOYD)
P = $20,000, S = $2,000, N = 8
( )
( ) 36 1 8
2
8
SOYD
1 N
2
N
SOYD
= + =
+ =
Where: N = useful lifetime; P = initial lifetime
( )
( )
( ) S - P
1 N
2
N
1 t - N
SOYDDt
(
(
+
+
=
( )
( )
000 , 4 $ 000 , 18
36
8
2000 - 20,000
1 8
2
8
1 1) - (8
SOYDD
1
= =
+
+
=
( )
( )
500 , 3 $ 000 , 18
36
7
2000 - 20,000
1 8
2
8
1 2) - (8
SOYDD
2
= =
+
+
=
( )
( )
000 , 3 $ 000 , 18
36
6
2000 - 20,000
1 8
2
8
1 3) - (8
SOYDD
3
= =
+
+
=
( )
( )
500 , 2 $ 000 , 18
36
5
2000 - 20,000
1 8
2
8
1 4) - (8
SOYDD
4
= =
+
+
=
Schedule of year book
Year Book value ($) SOYDD
t
($)
1 20,000 4,000
2 16,000 3,500
3 12,500 3,000
4 9500 2,500
5 7000 2,000
6 5,000 1,500
7 3500 1,000
8 2,000 500
(Salvage Value)
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4
( )
( )
000 , 2 $ 000 , 18
36
4
2000 - 20,000
1 8
2
8
1 5) - (8
SOYDD
5
= =
+
+
=
( )
( )
500 , 1 $ 000 , 18
36
3
2000 - 20,000
1 8
2
8
1 6) - (8
SOYDD
6
= =
+
+
=
( )
( )
000 , 1 $ 000 , 18
36
2
2000 - 20,000
1 8
2
8
1 7) - (8
SOYDD
7
= =
+
+
=
( )
( )
500 $ 000 , 18
36
1
2000 - 20,000
1 8
2
8
1 8) - (8
SOYDD
8
= =
+
+
=
SUM = $4,000 + $3,500 + $3,000 + $2,500 + $2,000 + $1,500 + $1,000 + $500
= $18,000
2. Double Declining Balance Depreciation (Ddbt)
( )
t
BV
N
2
date on to depreciati - P
N
2
DDBDt = =
( ) 000 , 5 $ 0 - 20000
8
2
DDBD
1
= =
( ) 750 , 3 $ 5000 - 20000
8
2
DDBD
2
= =
( ) 5 . 812 , 2 $ 3750 - 15000
8
2
DDBD
3
= =
( ) 38 . 109 , 2 $ 2812.5 - 11250
8
2
DDBD
4
= =
( ) 03 . 582 , 1 $ 2109.38 - 8437.5
8
2
DDBD
5
= =
( ) 52 . 186 , 1 $ 1582.03 - 6328.12
8
2
DDBD
6
= =
( ) 89 . 889 $ 1186.52 - 4746.09
8
2
DDBD
7
= =
( ) 42 . 667 $ 889.89 - 3559.57
8
2
DDBD
8
= =
Schedule of year book
Year BVt DDBDt
1 $20,000 $5,000
2 $15,000 $3,750
3 $11,250 $2,812.50
4 $8,437.50 $2,109.38
5 $6,328.12 $1582.03
6 $4,746.09 $1,186.52
7 $3,559.57 $889.89
8 $2,669.68 $667.42
8 $2,000
(salvage value)
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HOMEWORK
Que. 1
A dam initially cost $30 million and must be renovated every 50 years at a cost of $10 million. Interest is 7%. Find
the capitalized cost sufficient to construct and maintain the project in perpetuity.
Que. 2
A public utility commission requires a trust fund be established by a private company wishing to build and maintain
a water treatment plant for a small city. The company must deposit enough money to build the plant and then to
operate and renovate the facility in perpetuity. The plant will cost N10, 000,000 to build, has an annual operating
expense of 600,000, and must be renovated every 20 years at a cost of 1,000,000. The trust fund earns 6% interest.
What amount the company put in the trust fund?
Que. 3
A city water department has decided that two alternatives are available to meet the need for an additional 40
million gallons of water per day. One is to build a dam and reservoir, the other is to undertake a strong program of
water conservation/education. The dam and related facilities can be constructed over three year at a cost of $20
million in year 1, $10 million in year 2, and $5 million in year 3. Thereafter, maintenance is $0.5 million per year.
The conservations program will cost $50 million the first year, $4 million the second year, and $3 million the third
year. Thereafter, $2 million per year will have to be spent to maintain low water use. The planning horizon for both
alternatives is 50 year; any costs beyond this length of time are ignored and an interest rate of 7% is to be used.
Which alternative should be undertaken?
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5. QUALITY CONTROL IN CONSTRUCTION
Introduction
Quality in construction has assumed critical importance due to numerous instances of building collapses, the risks
associated with construction, and the need to ensure reliability and maintainability of completed structure. There
are high costs associated with poor quality of materials and equipment, including schedule delays, rework, and loss
of productivity. The Standard Organization of Nigeria (SON) is an organization established and charged with
responsibility of formulating national standard of quality assurance system. Much of the success of the
organization is in manufacturing industry with no impact on the construction industry. Management of quality is
the organizational function responsible for defect prevention [1]. There are various quality control techniques
depending on complexity and scope of project. To overcome the pressures of time and completion, contractors
and suppliers must have quality management plans and systems that are effective. Quality monitoring in
construction is continuous. It extends through the organization and definitely beyond inspection.
Quality Management
The accomplished quality of a building construction project is a function of intrinsic quality of materials used and
effectiveness of the quality control exercised during the construction by the team involved. The term supplier
quality implies conformance to materials requirement in specification. All engineered, fabricated, and bulk
materials supplied by vendors and subcontractors are included in this definition. The role of quality management
for a construction company is not an isolated activity, but intertwined with all the operational and managerial
processes of the company [2].
Total quality management (TQM) is often defined as a complete management philosophy that permeates every
aspect of a company and position quality as a strategic issue. The application of ISO standards has received much
attention in advance countries. However, the ISO 9000 standards series can form the basis for an efficient and
advantageous quality management system in the construction industry [2]. Management commitment to quality
and to continuous quality improvement is very important in each phase of the building process. ISO 9001:2000
requires the following in relation to management commitment:
1. Communicating about the importance of meeting customer as well as statutory
and regulatory requirements;
2. Establishing the quality policy;
3. Ensuring that quality objectives are established;
4. Conducting management reviews;
5. Ensuring the availability of resources.
However it has been argued that many of the concepts in ISO 9001 are experienced as being too abstract and
difficult to comprehend in construction process. Others were of the opinion that it seems difficult for a company to
improve its competitiveness and be more efficient by the use of ISO 9001 alone in view of the many stages of the
construction process encompassed and the diverging interests represented. The key personnel in material quality
management in building construction include Architect, Structural Engineer, Mechanical and Electrical Engineer,
Quantity Surveyor, and Contractor. It is not in all building works that all these personnel are involved. The key
personnel on building team and their roles in the chain of quality control management are enumerated as follow.
Note that what is been discussed is based on the author (as a Chief Civil Engineer) establishment of minimum
standard in quality control requirement from contractors on the University projects [3]:
Owner or Developer
The pursuit of quality starts with the client and continues through all the process and stages of construction and
the team involve. However recognizing that the Quality Control (QC) is a cost which is variable with scope of the
project, the client with his architect or engineer may evaluate the level of QC supervision so desire and how it is to
be achieved.
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Architect
Right from the take off of the project, he is responsible to act and supervise on behalf of the client. He normally
appoints a clerk of works for the client whose main responsibility is to ensure contractor compliance with design
and material specification.
Structural Engineer
The engineer is responsible for quality of the design. The design should encapsulate details and specification that
are readily interpreted by the contractor. The Engineer has based the design on stated standard of materials to be
used such as for example structural steel, iron rod (plain or twisted), granite among others. Depending on the
scope and complexity of the project, the following quality control measures are the basic requirement for the
contractor compliance [3]:
- Mixing of concrete should be by mechanical concrete mixers
- Functional vibrators should be provided and use on all concrete casting.
- At least six cube moulds (steel) should be provided on site for cube samples.
- Coarse materials should be granite chippings.
- Fine materials should be good river sand.
- All sandcrete blocks should be machine vibrated and of high quality
- All major concrete work should proceed on approval of the structural Engineer.
- Cube samples must be taken for all major reinforced concrete works.
- Cube samples must be crushed as and at when due and results promptly submitted to
the structural Engineer.
- Contractor must ensure correct sizes of reinforcement from source before site delivery.
- From the consignment of reinforcement, tensile test may be required on specific sizes before
use as directed by the Structural Engineer.
Mechanical and Electrical Engineer (M&E)
The engineer is responsible for quality of the design of all electrical and mechanical services. The design should be
complete with details and specification that are readily interpreted by the contractor. Depending on the scope and
complexity of the project the following quality control measures are the basic requirement for the contractor
compliance[3]:
- Samples of electrical and mechanical conduit pipes must be certified before usage.
- Conduit pipes layout for both electrical and mechanical services must be certified correct
before concrete casting.
- Samples of electrical cables and fittings must be certified okay before usage and there
should be no cable joining within conduit pipes.
- All mechanical fittings/fixtures must be certified okay before usage.
The Contractor
The contractor is the sole party to the contract and has a direct control on the quality of the project. He has a duty
to perform in accordance with the plans and specifications of the contract. It must be recognized that the
contractor is production-oriented for a profit. Therefore, it is imperative on the client to ensure or transfer the
responsibility of ensuring all quality control measures are spelt out for contractor compliance.
On-Site Quality Control
The effective site control of incoming materials is pre-establishing responsibility. One individual (or commissioned
consultant), probably the appointed clerk of works may be responsible for determining whether materials can be
accepted, returned, or replaced. The authority to accept or reject should be vested in an organization or individual
who is not influenced by compromising issues such as schedule, cost, or vendor pressure to accept non-conforming
material.
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Discourse:
Critique the quality of commissioned projects on the University campus
Critique the quality of ongoing projects in Ilorin by the government of AbdulFatah government.
References
1. Kolawole, JO (1998) The role of the client in quality assurances and management in the construction industry.
Nigerian Journal of Construction Technology and Management. Vol. 1, No 1, 46 50
2. Chin-Keng, T and Hamzah, A. (2011) Study of quality management in construction projects. Chinese Business
Review, Vol. 10, No. 7, 542-552
3. Okeola, OG (2009). Quality Control Management in Building Construction. Paper delivered at Workshop
organized by Kwara State Universal Basic Education Board (KWSUBEB) Ilorin. Held at NOCBUL Hotel, Ilorin,
Kwara State. 21st -22nd April, 2009.
Bibliography
1. Journal of Professional Issues in Engineering. Vol. 112, No 4, 1996
2. Journal of Performance of Constructed Facilities. Vol. 3, No 2, 1989
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6. CONSTRUCTION EQUIPMENT
INTRODUCTION
Plant equipment and tools are synonymous with major construction operations and are categorized into 3. They
are also estimated according to the category.
Small tools and consumable:
These are tools such as blades, drill bits and consumable like electrodes etc commonly use on project. They are
normally priced as a percentage of total labour prices.
Equipment shared by a number of works:
These kinds of equipment item are kept at the site over a period of time as long the project last and are used on
the project
Equipment used for specific tasks:
These are capital intensive and are used in for example excavation. These types of equipment are not kept on site;
however, they are brought in, employed for a particular task, and thereafter demobilized from site. Excavation
equipment, cranes, hoisting, equipment highly specialized and costly items such as concrete saw, are all fall in to
this category.
Construction equipment is very crucial in the operation of construction industry. Therefore estimating the cost of
acquiring and operating this category construction equipment is very important in preparation of BEME for major
civil engineering project. In the case of contractors in the heavy civil construction industry, the cost of acquisition
and operation of equipment are key part of doing business in a profitable manner.
TOTAL COST OF EQUIPMENT
Total costs of construction equipment are made up of two major components: ownership costs and operating
costs. Ownership cost are fixed cost (aside the one-time initial capital cost of purchasing) that are incurred each
year, irrespective of whether the equipment is operated or idle, while operating costs are the cost, incurred only
when the equipment is used. Both costs have different method of calculation.
Ownership cost:
Ownership cost is fixed costs which are basically annual in nature. They include: initial capital cost, depreciation,
investment cost, insurance cost, taxes and storage cost.
Initial cost
The cost is incurred for getting the equipment into contractors yard or site, and having the equipment ready for
operation. Normally this cost is made up of the following: factory price; Shipping cost; related charges (e.g. taxes)
and assembling & erection costs.
Investment cost
This cost represent the annual cost of capital invested in a machine, however if a loan is taken to purchase an
equipment, the equipment cost is simply the interest charged on these funds. The average value of equipment can
be determined as follow:
2
) 1 ( +
=
n IC
P _______Eqt 6.1 Where: IC = the total initial cost
P =average value
n =the useful life in years.
Equation 6.1 assumes that a unit of equipment will have no salvage value at the end of its useful life. However if a
unit of equipment has salvage value when it is disposed of, the average value during its life can be obtained from:
n
n s n IC
P
2
) 1 ( ) 1 ( + +
= _______Eqt 6.2 Where: s = salvage value
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Insurance tax and storage costs
Insurance cost represents the cost incurred due to fire, theft, accident, and liability insurance for the equipment.
Tax cost is in real term the cost of property tax and licenses for the equipment, although this is non-operation in
Nigeria. Storage cost includes the cost of rent and maintenance for equipment storage, yard, security guard wages,
and employees involved in moving equipment in and out of storage as well as associated direct overhead
TOTAL OWNERSHIP COST
Total equipment ownership cost is calculated as the sum of depreciation investment cost insurance cost, tax and
storage cost. Normally after all elements of ownership costs have been calculated they can be summed up to yield
total ownership cost per hour of operation.
COST OF OPERATING CONSTRUCTION EQUIPMENT
Operating costs of construction equipment represents a significant cost category and therefore very important for
considerations. They are basically the costs associated with the operation of a piece of equipment and are only
incurred when the equipment is actually used. The fall into the following categories: - (1) maintenance and repair
costs (2) tire cost (3) consumable costs.
Maintenance and repairs cost constitutes the largest amount of operating expense for construction equipment.
generally this cost got higher as the equipment year got older, the tire cost represent the cost of tire repair and
replacement the consumables are the items required for the operating of a piece of equipment that literally gets
consumed in the course of its operation. These include but not limited to fuel, lubrication, electrodes and other
petroleum products. The cost of equipment mobilization and demobilization can be large and are therefore always
important items in any job where substantial of equipment are used.
BASIC CONSIDERATION FOR EQUIPMENT SELECTION
Equipment categories
The construction equipment is categorized in to three main categories as follow:
1. Earthmoving equipment: Bulldozers; Front-end loaders; Motor graders; Scrapers and Trucks.
2. Excavating equipment: excavators; Backhoes and Front shovels.
3. Lifting equipment:
- Hoisting: Mobile, crawler, and tower cranes
- Material moving: Forklifts, concrete pumps
- People moving: Personnel lifts
Specific consideration
First and foremost equipment needs are function of complexities and uniqueness of specific work events. For
example equipment need for road construction (e.g. grader, roller, paver etc) are different for say a 20-story
building (e.g. concrete mixer, crane and trucks). From this example, the basic consideration in equipment selection
is in appropriating the right equipment with work activity. A typical mechanical operation is required for the three
equipment categories. It is instructive to ensure that appropriate equipment is matched with work activity to
prevent failure. Failure to match machine appropriately with work activity would result in operational inefficiency
which may shorten the useful life. Failure prevention is also facilitated through proper and timely service,
maintenance and repair.
Desire productivity
The desired productivity is the key major influence on the three categories of equipment selection. The physical
properties of clay, gravel, sand, silt or their combination require to be moved or excavated will dictate the type and
capacities of equipment selected for a particular task. The equipment productivity would be affected by the ease
or difficulty of removing or excavating soil material and subsequently would determine the capacity and type of
bucket, blades and accessories. The type and condition of working surface and travel distance will determine the
choice of tires or tracks. Lifting production is heavily dependent on ground and on-structure craft support
efficiency. Lifting capacity and vertical hoist speed are the primary equipment influences on lifting production.
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Equipment failure
All equipment can fail structurally or mechanically due to overloading or overstressed beyond the physical
capabilities of its component. Stability failure also can result due to overloading or imbalance positioning on
uneven surface during operation.
TYPICAL CONSTRUCTION EQUIPMENT
Excavator
Excavator combines digging and lifting abilities. They come in a wide range of bucket sizes, boom length and
operating speed.
Grader
The grader is mainly used to move soil to create a level surface and can be used for light surface excavation. The
grader is a long tractor-driven piece of equipment with a blade mounted underneath. The blade is used to push
dirt straight ahead or to the side at a desired level.
Backhoe
Backhoes can be used as a hoe or a loader and can accommodate many different accessories and attachments for
different operations. One of the backhoes greatest strengths is that many attachments can be used to increase its
versatility on a job site. The backhoe is ideal for light underground utility construction. The hoe can be used for
trenching and lifting like the excavator.
Tower Crane
Tower cranes are one of the greatest construction equipment achievements. They are designed to work in
congested areas. The cranes are a lifting device on top of a tower or mast. When a pick is made, the same lifting
forces occur as for any other crane. Counterweight must be provided to balance the load. Compression is
transferred down to the ground by the tower instead of outriggers, tires, or tracks. Lifting from up in the air can be
a lot more demanding and complicated than lifting while sitting on the ground. Manufacturers classify tower
cranes as top slewing, bottom slewing, self-erecting, and special application.
Trucks
Trucks are very crucial part of the earthmoving and material moving process. They are basically a tractor and a
trailer with sides. There are available a wide range of trucks based on hauling conditions and needs. They are
normally sized by their trailer volume. Trucks are typically used with excavators and loaders for excavation and soil
haul off or delivery. There are two basic considerations for choosing a truck trailer: (1) method of dumping and (2)
class of material hauled. Trucks can dump from the rear, from the bottom (belly dump) or from the side depending
on the type of material and work activity.
Trucks are dependent on another piece of equipment for loading. Trucks load are rated by volume and weight.
Typical cycle fixed times include loading, dumping, and required spotting times. The loading time equals number of
cycles required to load the truck times the estimated cycle time. The number of loader cycles to fill a truck equals
volume of the truck divided by the volume of the loader bucket per cycle. Trucks are usually loaded by front-end
loaders or excavators. Spotting to load or dump and wait or delay times are influenced by job conditions
NOTE:
The following pictures of relevant construction equipment within the scope of the CVE 581 course are adapted
from Douglas, et. al., (2000)
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Belly dump truck
Tracked loader
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Backhoe
Motor grader
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1. Discuss the: (1) reasons for using construction equipment on site and (2) methods of acquisition of equipment.
2. Give three types of equipment for each of the following construction operations: (1) Excavations only
(2) Combined excavation and loading (3) Combined haul and deposit and (4) Combine excavation, load, haul
and deposit
3. Discuss the safety procedures required in the following construction processes (1) transportation of
construction loads (2) earthmoving (3) masonry works and (4) concreting.
Excavator
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REFERENCES
1. Ardalan, A. (2000) Economic and Financial Analysis for Engineering & Project Management. Technomic
Publishing Company, Inc USA
2. Douglas, DG, Calin, MP and Richard, CR (2000) Constructions Equipment Management for Engineers,
Estimators and Owners. Taylor & Francis Group, LLC. USA. Copyright 2000
3. Heerkens, GR (2000) Project management. McGraw-Hill, USA.
4. Kerzner, H. (2003) Project Management: A System Approach to Planning, Scheduling & Controlling. John Wiley
and Son, Inc. New Jersey, USA
5. Bernett, LF (2003) The Management of Construction: A project Life Cycle Approach. Butterwort- Heinemann
Inc. UK.
6. Okeola, OG and Salami, AW. (2012). A pragmatic approach to the Nigerias engineering infrastructure dilemma.
Epistemics in Science, Engineering and Technology.(2):1 pp 55-61
7. Okeola, O.G. (2009) Occupational Health and Safety Assessment in the Construction Field. Proceedings of 1st
Annual Civil Engineering Conference, (Aug. 26th 28th 2009). Pp 32-40. Department of Civil Engineering,
University of Ilorin, Nigeria.
8. Okeola, O.G. (2009). Quality Control Management in Building Construction. Paper delivered at Workshop
organized by Kwara State Universal Basic Education Board (KWSUBEB) Ilorin. Held at NOCBUL Hotel, Ilorin, and
Kwara State. 21st -22nd April, 2009.
9. Park, CS and Tippett, DD (1999)Engineering Economics and Project Management Mechanical Engineering
Handbook. Ed. Frank Kreith. Boca Raton: CRC Press LLC, 1999
10 Revelle, CS, Whitlatch, EE and Wright, JR (1997)Civil and Environmental Systems Engineering. Prentice Hall,
Upper Saddle River, New Jersey.
Olayinka Okeola
Dr Okeola is a licensed professional engineer under the Nigerian law and had over 10 years experience in
structural engineering design and in tendering/contract administration, checking of consultant submission and
project monitoring, supervision and reporting. He has written monographs, instructional guides and joint
technical papers. Dr Okeola is a Peace Ambassador and has received the Pillars of Nation Building Award to
2012 Distinguished Academic ICON from the Strategic Institute for Natural Resources and Human
Development of Nigeria (SINRHD). His favorite books include: Giving by Bill Clinton; Happiness by Matthieu
Ricard, Social Ethics (Morality & Social Policy) by Mappes & Zembaty, and The 7 habits of highly effective
people by Stephen R. Covey. Contact Info: ogolayinka@unilorin.edu.ng; okeolaolayinka@gmail.com
+234-703-230-7770

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CVE 581- Construction Engineering

Lecture Note by Olayinka Okeola

$1.5m $1.5m $1.5m

$10m $10m $10m $10m

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