Analysis of Uncertainty Inherent to Valuation Methodologies in Construction Industry
In this research investigation, the authors present a Scheme to analyze uncertainty inherent to valuation methodologies in the construction industry. Firstly, 63 construction projects are considered and their Uncertainities are computed for each of the valuation methodologies of Cost Approach Method, Market Approach Method and Income Approach Method. For each of the Valuation Approach, these Uncertainities are then clustered using K-Means Clustering Algorithm. Using a proposed notion of Cluster Level Uncertainty, the authors compute the Upper Bound and Lower Bound Uncertainities for the aforementioned thusly Clusteredrote Uncertainities of the 63 Construction projects. Furthermore, a notion of Relative Importance Index and Ensembling Schemeis also proposed to ascribe importance coefficient to the Cluster Level Uncertainty of each Construction Project for the different valuation approaches used and combine the values of the three valuation approaches appropriately to get one value of Cluster Level Uncertainty, respectively. Cluster level Uncertainty is useful as most Construction projects have some semblance with past projects and therefore one can use the Cluster Level Uncertainty to find the Uncertainty of any Construction project in progress, i.e., which has not finished yet. For validation purposes the authors consider the above analysis for all 63 projects and we repeat this scheme on the first 58 Construction Projects and for the next 5 Construction Projects, the authors use Linear Regression based Forecasting to predict the Uncertainities of the aforementioned last 5 Construction Projects. Then, the Uncertainities of the first 58 Construction Projects and the predicted Uncertainities last 5 Construction Projects are considered and these are Clustered using K-Means Clustering Algorithm. The authors then compute the Cluster Level Uncertainities for each of the last 5 Construction Project Uncertainities using the proposed notion of Cluster Level Uncertainty and use the proposed Relative Importance Index and Ensembling Scheme to combine the values gotten by each of the three valuation approaches. Finally, the authors compare these Ensemble Values of the Validation Approach and the actual data case analysis
Year of publication: |
2020
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Authors: | I. L. N., Prasad ; Balaji, K. V. G. D. ; ChittiBabu, Kapuganti |
Publisher: |
[S.l.] : SSRN |
Saved in:
freely available
Extent: | 1 Online-Ressource (21 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | In: International Journal of Advanced Research in Engineering and Technology, 11(6), 2020, pp. 786-806 Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 22, 2020 erstellt |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014095085
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