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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/2056

Title: STUDY ON THE EFFECTS OF UNPREDICTABLE PRICE FLUCTUATION ON THE CAPACITY OF CONSTRUCTION CONTRACTORS
Authors: ASTEWAY, YIGEZU
Advisors: PROF. DR. - ING. ABEBE DINKU
Keywords: Contractors’ capacity
cost estimation
price fluctuation
price fluctuation compensation
pricing
Copyright: Dec-2008
Date Added: 2-May-2012
Publisher: AAU
Abstract: One of the wide ranging problems that the construction industry is facing is the price fluctuation of construction inputs. This major problem is spread all over the country and domestic contractors are critically affected. Moreover the projects’ performances are also affected against time, cost and quality. The research is about investigating the effects of unpredictable price fluctuation on the capacity of domestic contractors from the contractor’s perspective. The study concepts were developed through literature survey that enables to find out the variables. Questionnaire based studies and project case studies are used to assess the problem. Recommendations that would reduce adverse effects of price fluctuation are forwarded. The research result shows that the problem of price fluctuation occurs in an unpredictable manner with increase in price by more than 34%. Contractors lose portion of their expected profit by at least 2.43% of contract amount. To accommodate at least some portion of any future fluctuation contractors introduce some risk factors in their pricing. The price fluctuation system that is in place is limited to few construction inputs. Moreover, contractors get compensation only for portion of the price increase of inputs. Project delay was found to be one of the major effects of price increase and delay caused by the contractors is also affecting the themselves by making them vulnerable to effects of price increase. Finally, based on the analysis of the results, recommendations for contractors and other stake holders have been proposed that enables to minimize the adverse effect of price fluctuation on contractors and favors the construction industry for better performances.
URI: http://hdl.handle.net/123456789/2056
Appears in:Thesis - Constructional Technology & Management

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