TY - GEN
T1 - Modeling and forecasting fluctuations of asphalt cement price index
AU - Ashuri, Baabak
AU - Ilbeigi, Mohammad
AU - Hui, Yang
AU - Shahandashti, Mohsen
N1 - Publisher Copyright:
Copyright © 2013 by Research Publishing Services.
PY - 2013
Y1 - 2013
N2 - Transportation agencies and highway contractors across the nation are facing great challenges of variations in construction costs for transportation projects. Significant volatility in the costs of construction materials, such as asphalt cement, is one of the most important drivers of uncertainty about transportation construction costs. Most State Departments of Transportation use unit-price contracts with price adjustment clauses to share the risk of increasing Asphalt Cement price with highway contractors. Also, most State DOTs consider these price adjustment clauses to benefit from the possible opportunity of decreasing Asphalt Cement prices. Price adjustment clauses are defined based on the Asphalt Cement Price Index. However, there is little knowledge about how the Asphalt Price Index fluctuates over time. This gap in knowledge makes it difficult for transportation agencies to assess the financial impacts of price adjustment clauses on project costs under uncertainty about Asphalt Price Index. The ability to forecast Asphalt Cement Price can result to evaluate the value of offering Price Adjustment Clause in construction projects. The research objective of this paper is to create appropriate time series models for estimating and forecasting fluctuations in Asphalt Cement Index. After investigation on characteristics of historical time series data of monthly asphalt cement price index, several univariate time series models are created. The accuracy and predictability of these time series models are examined using asphalt price index data, which were not used in model creation efforts. It is expected that this work helps state DOTs systematically examine the financial implications of offering price adjustment clauses for asphalt cement in transportation projects.
AB - Transportation agencies and highway contractors across the nation are facing great challenges of variations in construction costs for transportation projects. Significant volatility in the costs of construction materials, such as asphalt cement, is one of the most important drivers of uncertainty about transportation construction costs. Most State Departments of Transportation use unit-price contracts with price adjustment clauses to share the risk of increasing Asphalt Cement price with highway contractors. Also, most State DOTs consider these price adjustment clauses to benefit from the possible opportunity of decreasing Asphalt Cement prices. Price adjustment clauses are defined based on the Asphalt Cement Price Index. However, there is little knowledge about how the Asphalt Price Index fluctuates over time. This gap in knowledge makes it difficult for transportation agencies to assess the financial impacts of price adjustment clauses on project costs under uncertainty about Asphalt Price Index. The ability to forecast Asphalt Cement Price can result to evaluate the value of offering Price Adjustment Clause in construction projects. The research objective of this paper is to create appropriate time series models for estimating and forecasting fluctuations in Asphalt Cement Index. After investigation on characteristics of historical time series data of monthly asphalt cement price index, several univariate time series models are created. The accuracy and predictability of these time series models are examined using asphalt price index data, which were not used in model creation efforts. It is expected that this work helps state DOTs systematically examine the financial implications of offering price adjustment clauses for asphalt cement in transportation projects.
KW - Asphalt cement price index
KW - Forecasting
KW - Time series
UR - http://www.scopus.com/inward/record.url?scp=84923164290&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84923164290&partnerID=8YFLogxK
U2 - 10.3850/978-981-07-5354-2-RADM-5-131
DO - 10.3850/978-981-07-5354-2-RADM-5-131
M3 - Conference contribution
AN - SCOPUS:84923164290
T3 - ISEC 2013 - 7th International Structural Engineering and Construction Conference: New Developments in Structural Engineering and Construction
SP - 685
EP - 690
BT - ISEC 2013 - 7th International Structural Engineering and Construction Conference
A2 - Yazdani, Siamak
A2 - Singh, Amarjit
T2 - 7th International Structural Engineering and Construction Conference: New Developments in Structural Engineering and Construction, ISEC 2013
Y2 - 18 June 2013 through 23 June 2013
ER -