Judgemental forecasting in construction projects

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Abstract
Forecasting is a very important strategic task within the project control framework. Forecast activity seeks to answer one of project management's prime questions: ‘When will the the project be completed and what will it cost?’ Large variances in costs or schedules will impact the profitability, cashflow and, in extreme cases, the viability of projects. This paper discusses a new approach to forecasting within the context of project control. The paper concerns itself with the situation wherein a project manager has observed a variance from a project goal (a wage rate, for example) and the manager must now predict (i.e. forecast) the final actual wage rate for the project. Forecasting is a difficult task because one must understand the effect of past performance and the impact of future events. A good forecasting technique, therefore, needs to include both historical trend-based data and competent judgements based on construction experience and knowledge. This research was conducted to develop an alternative approach to forecasting which would use both historical data and human judgement in a formal forecasting model. This paper describes the adaptation of Social Judgement Theory to forecasting for construction project control.

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