Development of a systematic integration approach for multi-level cost flow prediction and management

Existing approaches for cost flow predictions embodied in the cost/schedule integration approach and the budgeting model are largely blind to the effects of significant factors embedded in relative subcontract information, such as payment frequency and the payment component. The blindness to considerations of the significant factors produces a great discrepancy between the pattern of cost flow predictions and that of payment flow projections. Likewise, existing approaches for cost flow predictions fail to account for problems in the logic of the schedule between construction and cost activities when generating cost flows. This failure further exacerbates the discrepancy between the pattern of cost flow predictions and that of payment flow projections.; Furthermore, construction research has mainly focused on the improvement of the integration between cost items and construction activities and schedule; the notion of the effects of payment flows and payment uncertainty on cost flows is almost completely absent from the construction and financial literature. The absence of this notion leads to a failure to address complex interactions between construction and payment activities or between cost flows and payment flows; as a result, solutions to the influences of payment flows and payment uncertainty on cost flows are completely missing from the literature.; In response to these limitations, we develop a robust model of cost flows and payment flows. This model explicitly links cost and schedule, the significant factors, and payment and schedule, and hence creates the synergy that completes the required strengths to solve and/or mitigate the limitations of existing approaches. While this model not only resolves and/or alleviates the existing cost flow forecasting models' problems, by coordinating with the typology of payment conditions and the managerial approach, it also provides a novel systematic integration approach, an answer to reaching the accuracy of multi-level cost flow prediction and management. As well, this systematic integration approach further introduces a new way to approach the accuracy of multi-level cash flow forecasting for high-level applications and for better employment of working capital.