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OPTIMIZING MODEL OF CONSTRUCTION PROJECT SCHEDULE TO MINIMIZE ADDITIONAL COSTS DUE TO INTEREST OF FUNDING
In a construction project, although a schedule of project has been developed optimally, a contractor should still consider additional costs possibly occurred during construction. The costs may emerge due to interest imposed on balancing funds needed when there are negative discrepancies between payments and disbursements of cash flow. Besides the nature of cash flow itself, a delay of payment from owner to contractor is a major cause of such discrepancies. Some contract agreements even specify that owners are given a specified period to study progress reports submitted by Contractors before issuing payment certificates. This paper introduces an optimizing model if delays of payments are specified and taken into consideration. The model is in a binary integer linear programming and aims at minimizing additional costs due to interest of funding by shifting schedules of activities. An optimization software package namely Quant System v.2.0 is used to solved the problem.
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