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Paper convr-2013-13:
Cash flow optimization and visualization of residence housing for builders

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Li H-X,Liu H,Zhou X,Sun C,Ngan K-H,Al-Hussein M

Cash flow optimization and visualization of residence housing for builders

Abstract: Cash flow management is widely considered to be a key issue within the construction industry, especially for residential homebuilders. Cash flow in the residential housing industry involves multiple stakeholders, such as lot developers, banks, clients, trades, and builders - usually the builder initiates a complex plan involving lot procurement, construction investment, and housing sales, which has the potential to lead to more profitable solutions for the builder. This research develops a decision support system subject to variable developer and bank payment schedules, and is based on a twofold objective: (1) Maximize cumulative (negative) cash flows, subject to the guaranteed net present value (NPV) for developers and bank. The optimum solutions help builders to stay within the bank overdraft limit and reduce the pressure of cash demands for builders. (2) Maximize builder’s NPV and increase the NPVs of developers and banks as much as possible. With the multi-objective optimization, the win-win optimal solutions serve as negotiation strategies between these stakeholders. The proposed decision making system is highlighted by the application of visualization techniques - two types of visualization techniques, i.e., a combined Excel and add-in and a preliminary Augmented Reality (AR), are utilized to illustrate the optimizing process and the optimal solutions, with the cash inflows, outflows, and the net cash flows for different time periods displayed dynamically. A case study based on a project in Edmonton, Canada is utilized to demonstrate the proposed methodology.

Keywords: Cash Flow Management,Cash Flow Optimization,Residential Housing,Builder,Visualization,Decision Support System


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