Cost Overruns Essays

Cost Overruns Essays Cost Overruns Essay Cost Overruns Essay Cost overruns are as a result of the mismatch between projected costs and the actual results. For most construction projects, projections are necessary for the project to go on smoothly and at the same tine be done within the three factors of performance, which are, time, quality and cost. As the study indicated, the main factor leading to cost overrun is the political situation, especially for a politically unstable region, such as the West Bank. The main reasons for this are that political instability leads to lack of predictability. With this kind of high unpredictability, it is hard for those involved to plan properly, because there are many variables that van affect the accuracy of their predictability. Without the project managers being able to plan effectively, it becomes harder for the project to be done within time, budget and expected quality. Time, for instance is a major factor that needs to be addressed because it is a cost driver. With political uneasiness, it is hard for projects to be done in time. This is because delays will happen when there are disruptions in the peace of the region. With time of project completion not being predictable, it is hard for the project to be done within budget. This is as a result of the fact that time affects the other aspects of project completion, such as quality and cost. Every time there is a delay, more cost is added to the project. As a result, this could be the reason why unstable regions such as the West Bank experience more cost overrun and have higher risks of cost overruns. The other reason that can be attached to the reason why political instability is the most significant factor that affects the cost overrun is the fact that it has a direct impact on the economics of a nation or regions. With modern projects, international operations is almost always a necessary. This would mean that there is a flow of foreign currency meant for the project, and any political instability is likely to cause changes in the exchange rate. Although this was not a major variable in the study, it is feasible to conclude that political instability can lead to cost overruns through the foreign exchange rates that are affected by the political stability of a region. This would definitely change a lot of factors ranging from the cost of materials to labor cost. It is also necessary to note that the political instability can lead to not only shifting foreign currency exchange rates but also to disruption of labor. With a region such as the West Bank, it would be necessary to note that when there is political upheavals, more people are likely to forgo work, which would then lead to high cost of labor. As a result, it is no surprise that political instability is cited as the most serious reason for cost overruns for construction projects in unstable regions. As the results indicate, over 45% of the respondents allocated an increase of 11% to 30% on consecution projects in the West Bank region, while , 41.7% of the participants allocated 6% to 10% of cost overrun in such projects. These percentages are too high, especially considering that the projects are who millions of dollars, which would mean that even a 1% increase in the estimated cost would lead to a lot of money which was not planned for the project being injected to the project. This can be highly risky for construction firms that take out jobs on contracts because it can eat on the profits of the firm and render such projects unprofitable. It is also necessary to note that 8.3% of the respondents even estimated cost overruns of up to 51%. With such overruns rates, carrying out projects in such an area can be an impossible endeavor, whether for contracting firms or for those who carry out own projects. While 72.9% of responders indicated that all of there are many factors for cost overrun, 16.7% attributed political instability to the problem of cost overruns. Construction projects, just like any economic endeavors, are affected by political problems in a big way. This could be because of, apart from the problem of unpredictability, the fact that political instability is something that is beyond the control of players that affect the economic at the micro level. Unlike other factors such as social issues that are easier to navigate, political instability is difficult to control, which would then make it harder for those affected to avoid its impact on their economic activity. However, as the results indicated, social factors also have a major impact on the way a project is planed and implemented and can affect how well a project will be able to stick to the projected costs, time and quality. For managers operating in such regions, mastering the art of navigating the unpredictable p olitical labyrinth can be a big factor to help them deal with cost overruns.

Characteristics of a Real Number

Characteristics of a Real Number What is a number? Well that depends. There are a variety of different kinds of numbers, each with their own particular properties. One sort of number, upon which statistics, probability, and much of mathematics is based upon, is called a real number. To learn what a real number is, we will first take a brief tour of other kinds of numbers. Types of Numbers We first learn about numbers in order to count. We began with matching the numbers 1, 2, and 3 with our fingers.  Then we and kept going as high as we could, which probably wasnt that high. These counting numbers or natural numbers were the only numbers that we knew about. Later, when dealing with subtraction, negative whole numbers were introduced. The set of positive and negative whole numbers is called the set of integers. Shortly after this, rational numbers, also called fractions were considered. Since every integer can be written as a fraction with 1 in the denominator, we say that the integers form a subset of the rational numbers. The ancient Greeks realized that not all numbers can be formed as a fraction. For example, the square root of 2 cannot be expressed as a fraction. These kinds of numbers are called irrational numbers. Irrational numbers abound, and somewhat surprisingly in a certain sense there are more irrational numbers than rational numbers. Other irrational numbers include pi and e. Decimal Expansions Every real number can be written as a decimal. Different kinds of real numbers have different kinds of decimal expansions. The decimal expansion of a rational number is terminating, such as 2, 3.25, or 1.2342, or repeating, such as .33333. . . Or .123123123. . . In contrast to this, the decimal expansion of an irrational number is nonterminating and nonrepeating. We can see this in the decimal expansion of pi. There is a never ending string of digits for pi, and whats more, there is no string of digits that indefinitely repeats itself. Visualization of Real Numbers The real numbers can be visualized by associating each one of them to one of the infinite number of points along a straight line. The real numbers have an order, meaning that for any two distinct real numbers we can say that one is greater than the other. By convention, moving to the left along on the real number line corresponds to lesser and lesser numbers. Moving to the right along the real number line corresponds to greater and greater numbers. Basic Properties of the Real Numbers The real numbers behave like other numbers that we are used to dealing with. We can add, subtract, multiply and divide them (as long as we dont divide by zero). The order of addition and multiplication is unimportant, as there is a commutative property. A distributive property tells us how multiplication and addition interact with one another. As mentioned before, the real numbers possess an order. Given any two real numbers x and y, we know that one and only one of the following is true: x y, x y or x y. Another Property - Completeness The property that sets the real numbers apart from other sets of numbers, like the rationals, is a property known as completeness. Completeness is a bit technical to explain, but the intuitive notion is that the set of rational numbers has gaps in it. The set of real numbers does not have any gaps, because it is complete. As an illustration, we will look at the sequence of rational numbers 3, 3.1, 3.14, 3.141, 3.1415, . . . Each term of this sequence is an approximation to pi, obtained by truncating the decimal expansion for pi. The terms of this sequence get closer and closer to pi. However, as we have mentioned, pi is not a rational number. We need to use irrational numbers to plug in the holes of the number line that occur by only considering the rational numbers. How Many Real Numbers? It should be no surprise that there are an infinite number of real numbers. This can be seen fairly easily when we consider that whole numbers form a subset of the real numbers. We could also see this by realizing that the number line has an infinite number of points. What is surprising is that the infinity used to count the real numbers is of a different kind than the infinity used to count the whole numbers. Whole numbers, integers and rationals are countably infinite. The set of real numbers is uncountably infinite. Why Call Them Real? Real numbers get their name to set them apart from an even further generalization to the concept of number. The imaginary number i is defined to be the square root of negative one. Any real number multiplied by i is also known as an imaginary number. Imaginary numbers definitely stretch our conception of number, as they are not at all what we thought about when we first learned to count.