Cost estimation model of prefabricated construction for general contractors based on system dynamics

PurposeThe poor capacity of prefabricated construction cost estimation is the essential reason for the low profitability of the general contractor. Therefore, this study aims to focus on the cost estimation of prefabricated construction as the research object. This research aims to enhance the accuracy of total project cost estimation for general contractors, ultimately leading to improved profitability.Design/methodology/approachThis study used Vensim PLE software to establish a system dynamics model. In the modeling process, a systematic research review was used to identify cost-influencing factors; ABC classification and the analytic hierarchy process were used to score and determine the weights of influencing factors.FindingsThe total cost error obtained by the model is less than 2% compared with the actual value. It can be used to cost estimation and analysis. The analysis results indicate that there are 7 key factors, among which the prefabrication rate has the most significant impact. Furthermore, the model can provide the extreme range cost; the minimum cost can reduce by 13% from the value in the case. The factor's value can compose a cost control strategy for general contractors.Practical implicationsThe cost of prefabricated buildings can be estimated well, and deciding the prefabrication rate is crucial. The cost can be declined by correct cost control strategies when bidding and subcontracting are in process. The strategies can follow the direction of the model.Originality/valueA systemic, quantitative and qualitative analysis of cost estimation of prefabricated buildings for general contractors has been conducted. A mathematical model has been developed and validated to facilitate more effective cost-control measures.