Professional Documents
Culture Documents
Engineering
Unit 3: Applied Mathematics for Construction and the Built
environment
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Contents
Introduction Page 3
Appendix Page 14
Bibliography Page15
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Introduction
3
Brief
Contract 1
Fig1.1
Contract 2
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It will be essential to determine the best fit line for
this data in order to extrapolate the costs for the entire contract.
The contract has a value of £1.4 million so it is important to
establish the profit or loss at the end of the contract and to
determine the break point of the contract.
Contract 3
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Contract 1
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In the following example the profit for each month
has been kept at £6,000. Although this may give the projected
£60,000 profit at the end of the contract certain things need
taking into account. These include interest rates that would be
charged by the bank when going into the overdraft, and also
interest earned when in profit. There is also the fact that even
though the bill is sent to the client for month one the money for
this will not be received for at least 30 days, so the balance will
always be in arrears for the first month.
From this table and graph we can see that the break
point for this contract would be in October with the balance
showing a loss for nearly the entire duration. This could make
cash flow a problem meaning that any unforeseen problems
that could arise would be difficult to deal with. Also the
company would be making a loss of -£8,258.33 in April at the
end of the financial year; due to interest charges the company
will only make £59,500 meaning that £500 is lost due to these
charges.
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As an alternative to both these models it is possible
to calculate the percentage of profit for the contract and to
make sure that this percentage is billed into the profit for that
month.
£60,000/£450,000*100=13.33
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Contract 2
Fig3.1
Month 1 2 3 4 5 6 7 8 9 10 11
Cost
Cumulative 41000 87000 99000 112000 177000 277000 319000 412000 509000 612000 677000
Cost
Monthly 41000 46000 12000 13000 65000 100000 42000 93000 97000 103000 65000
Fig 3.2
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It will be important to try and minimise the monthly
cost of the contract, it may be possible to do this by cutting the
labour force at the end of the contact, and cutting the plant
used on site.
The middle half of the contract is often the most
expensive, if costs during this period become too great it would
be very easy to loose out on profit or for the job even to make a
loss, it is important to try and keep these cost from escalating
too much.
The variable costs for this contract at 7.5 months
are possible to obtain from the graph, this being £365000, also
the cost for that month alone £22,000.
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Contract 3
Fig 4.1
1600 = 1570
So we can see that the total cost for the contract will be:
For this tender under these conditions it will cost nearly £21/m²
to complete the work. It is the project manager’s job to try and
work out the best ways to try and minimise these costs and to
maximise profits for each individual contract.
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In this contract there are a number ways to try and
minimise the costs for the work tendered. Instead of having one
bricklayer and half a labourer to pay for; having another
bricklayer and still only one labourer would cut the costs, as
shown below:
Taking that the labourer earns £6.00 /hour means
that the cost for a second bricklayer will be £11.50 /hour. Plus
this team will also be able to share the plant for the job.
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So by increasing the amount of hours worked daily it is possible
to make a saving of £1.26/m², which over the duration of the job
would equate to a saving of £2022. It is important to mention
that the only saving in this is with the hire of the plant and not
with the overall labour cost, as the bricklayers charge per
meter.
In reality it is not possible to just keep on increasing
the labour force indefinitely to cut the amount of time taken to
complete it as the is limited by the amount of space available,
as the bricklayers and labourers would be tripping over one
another and the amount of plant required to service these
operatives would increase too much with more than two gangs.
Also increasing the hours is not always possible depending on
the time of year and therefore amount of light available and the
weather.
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Appendix
14
Bibliography
Virdi, 2006. Construction Mathematics. Butterworth-
Heinemann.
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