The Arab Academy for Science and Technology & Maritime Transport

College of Engineering and Technology

Construction and Building Department

Assessment of the Expected Cost of Quality (COQ) in Construction Projects in Egypt

A Thesis Submitted In Partial Fulfillment Of The

Requirements For The Master Of Science In Construction

And Building Engineering

Submitted by: Hany Shoukry Tawfek

Under the Supervision of Prof. Dr. Mohammed Emam Abdel Razek

Construction and Building Department, College of Engineering & Technology, The Arab Academy for Science and Technology and

Maritime Transport.

Associate .Prof. Hossam EL-Deen Hosny Mohammed Construction Engineering Department,

Faculty of Engineering, Zagazig University.

MAY 2011

ARAB ACADEMY FOR ScIENCE, TECHNOLOGY AND MARITIME TRANSPORT

College of Engineering and Technology

( Assessment of The Expected Cost of Quality (COQ) in

Construction Projects in Egypt)

by

Hany Shoukry Tawfik Milik.

A Thesis

Submitted in Partial Fulfillment to the Requirements For the Master's Degree in

Construction Engineering and Management

Supervisors

Prof. Dr. Mohamed Emam Abd El-Razek Prof .,Construction and Building

~e:. AASTMT, Cairo Branch.

Examiner

7~'~ -"

Dr. Hossam EI-Deen Hossny Mohamed Ass. Prof., Construction Engineering

Dept., Zagazig University.

Examiner

Dr. Ahmed Abd Elaty Gab AlIa Ass. Prof., Construction Engineering

Dept., Zagazig University. A;A~~

MAY 2011

ACKNOWLEDGMENTS

Thanks to God for the help and knowledge bestowed upon us.

This Thesis could not have ever taken place without the active support of many

individuals. It is the least possible wished complement to thank Prof. Dr. Mohamed Emam

Abdel- Razek and Associate. Prof. Dr. Hossam EI-Deen Hosny Mohamed for their

valuable contribution, inspiration and provision of opportunity in granting the thesis life.

Their constant encouragement, guidance and help comments were outstanding at all times.

Also, I wish to thank the consultants, project managers and academicians who gave me

all the needed answers about my questions and allowed me to collect the actual real life

project data.

Last but not the least I express my special gratitude to my Mother & Father's spirit.

Also, I am especially grateful my wife, my daughters for their encouragement,

And fortitude patience,

Thank you.

II

ABSTRACT

Many Defmitions for quality we re provided by experts. Among these definition are:

Quality is fitness for use Juran (1988), conformance to requirements Crosby (1979)

Quality is a predictable degree of uniformity and dependability, at low cost and suited to

the market Deming (1986) Quality is the degree to which a specification fulfill the

Requirements Gilmore (1974).

The cost of quality is an essential element of the total cost of any construction project.

Consequently, the accurate assessment of such cost of quality can materially affect the

reliability of the estimated cost of any construction project. Stated differently, the

accurate and reliable cost estimating for any construction projects is not really possible

without the deep investigation for the expected cost of quality of this project. Cost of

quality is generally affected by many factors. Such factors clearly describe the different

project, site and management conditions. Among these factors are planned COQ for the

project, awareness of quality for project team, supervision team experience, labor skills,

suppliers, design errors, defected material, plan of improving quality, external factors,

accident, equipment down time, project duration. Any attempt to assess the cost of

quality of any project should take the different cost of quality factors into consideration.

COQ is usually understood as the sum of conformance plus non-conformance costs,

where cost of conformance is the price paid for prevention of poor quality (for example,

inspection and quality appraisal) and cost of non-conformance is the cost of poor quality

caused by product and service failure (for example, rework and returns). According to

Dale and Plunkett (1995), it is now widely accepted that quality costs are: the costs

incurred in the design, implementation, operation and maintenance of a quality

management system, the cost of resources committed to continuous improvement, the

costs of system, product and service failures, and all other necessary costs and non-value

added activities required to achieve a quality product or service.

III

The main objective of this research is to establish a Neural Network model that will

enable any construction firm belonging to the first or the second category of construction

companies in Egypt to assess its cost of quality for any future building project. This will

improve the existing construction company performance and their ability to successfully

compete with other companies through the improvement of their bids accuracy. The

"Neural Connection 2.0 Professional" was chosen to generate the proposed model for

predicting the expected cost of quality of the buildings projects as a percentage of the

total project's cost. This wi11lead to an adequate and acceptable estimation of the cost of

quality as a percentage of the total project cost.

This research was performed in the following sequence:

Review of the previous studies conducted in the field of cost of quality.

Identifying a list of cost of quality factors for building projects based on literature

review.

Comparison between that list and the factors that contribute to cost of quality in

Egypt from the experts' point of view, with the help ofa questionnaire.

• Collection of real-life cost of quality data for a sample of building survey

construction projects through a number of construction companies in Egypt.

Impact analysis to understand the effect of each of the previously identified cost of

quality factors on the percentage of total cost of quality for building projects. The

average cost of quality percentages for construction building project in Egypt for the

selected (52) sample projects was found to be 1.53% of the total project cost.

Preparation of an Artificial Neural Network (ANN) model to predict the cost of

quality percentage for building construction projects in Egypt.

A sample of building projects in Egypt was used to act as demonstrative examples to

investigate the validity of the designed ANN model.

IV

N-Connection 2.0 Professional (1997) Neural Network Simulator usmg the back

propagation learning algorithm was used for developing the mode . The best structure of

the model was obtained through the traditional trial and error process. However, 106

network structures were experimented and the satisfactory model was obtained. This

model consists of an input layer with ten (l 0) input nodes and one hidden layer with eight

(8) neurons and one (1) output node with Tangent Transfer Function. Data of 47 real-life

building projects from Egypt were used in the training processes.

To test the validity of the proposed model, it was tested with 5 projects (facts) that were

still unseen by the network. The results of the model testing clearly show that the model

correctly predicted the expected cost of quality for (80 %) of the selected projects sample.

This demonstrates the viability of neural network as a powerful tool for modeling the

percentage of cost of quality for building projects in Egypt. The model is a simple and

easy-to-use tool that can help contractors firm to improve the reliability of the

percentage of cost of quality assessment.

v

TABLE OF CONTENTS

LIST OF TABLES

LIST OF FIGURES

CHAPTER ONE: INTRODUCTION

1.1 General

1.2 Cost of Quality

1.3 Problem Statement

1.4 Study Objective And Scope

1.5 Study Methodology

1.6 Thesis Organization

CHAPTER TWO : LITERATURE REVIEW

2.1 Introduction

2.1.1 Quality Assurance And Quality Control

2.2 What is Cost of Quality?

2.2.1 Major Components of Cost of Quality

2.3 Cost of Quality Models

2.4

2.3.1

2.3.2

General

Review of COQ Models

2.3.2.1 P-A-F Model

2.3.2.2 Crosby's Model

2.3.2.3 Opportunity And Intangible Costs Model

2.3.2.4 Process Cost Model

2.3.2.5 An Activity-Based Costing (ABC) Mode

Cost of Quality in Construction

2.4.1

2.4.2

Cost of Quality Versus Cost of Non-Quality

Assessing Contractor Quality Performance

VI

Page

x XI

2

2

3

4

5

5

6

8

lO

10

12

14

15

16

18

19

20

20

21

2.4.3 Determining The Causal Structure of Rework 22

2.4.4 Capturing The Cost of Non-Conformance 23

2.4.5 A Project Management Quality Cost Information 25

2.4.6 Cost And Quality Benefits of Semi-Prefabrication 25

2.4.7 New Approach to Quality Control in Construction 26

2.4.8 The Role of Managerial Actions in The Cost 27

2.4.9 Quantifying The Causes And Costs of Rework 28

2.4.10 Implementing environmental management systems 29

2.4.11 Strategic Use of Quality Function Deployment 29

2.4.12 The Cost of Non-Conformance During A Highway Project 30

2.4.13 Some Observations on The Issues of Quality Cost in Construction 31

2.4.14 Measuring Design And Construction Quality Costs 31

2.4.15 A Construction Quality Costs Quantifying System for Building

construction 32

2.4.16 The Cost of Quality in The Egyptian Construction 32

2.4.16.1 General 32

2.4.16.2 Quality Cost Knowledge 33

2.4.16.3 Quality Cost Expenditure 34

2.4.16.4 Classi fication of Quality Cost 34

2.5 Factors affecting the Cost of Quality 37

CHAPTER THREE: DATA COLLECTION & ANALYSIS

3.1 Introduction 38

3.2 Data Collection 39

3.2.1 Factors Effecting Cost of Quality 40

VII

3.2.2 Factors effecting Cost of Quality in Egypt:

3.2.2.1 Questionnaire Preparation:

3.2.2.2 Analysis of Questionnaire Data

3.3 Analysis of Projects Data

3.3.1 The influence of awareness of quality team on the COQ

3.3.2 The Influence of Project Time on The Percentage of COQ

3.3.3 The Influence of Contractor's Class on The COQ

3.3.4 The Influence of Client Type on The COQ

3.3.5 The Influence of Project Location on The COQ

3.3.6 The Influence of Labor Skills on The Percentage of COQ

3.3.7 The Influence of Project Type on The COQ

3.3.8 The Influence of Supervision Team Experience on The COQ

3.3.9 The Influence of Projects Size on The Percentage ofCOQ

3.3.10 The Influence of Planned Project's COQ on The COQ

CHAPTER FOUR: COST OF QUALITY NEURAL NETWORK MODEL

4.1 Introduction

4.2 Steps to Design The Artificial Neural Network Model

4.2.1 Define The Problem

4.2.2 Data Collection And Design of The Neural Network

4.2.3 Design ofthe Neural Network Model

41

42

43

48

49

50

51

52

54

55

56

58

60

61

63

64

64

66

66

4.2.3.1 Selection of The Neural Network Simulation Software 66

4.2.3.2 Determining The Best Network Architecture 67

4.2.4 Training The Network

4.2.5 Testing The Network

4.2.6 Creating Data File for Neural Connection

VIII

70

71

72

4.3 Determining The Best Model 81

4.4 Testing The Validity of The Model 90

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

5.2 Conclusions

5.3 Recommendations for Future Work

REFERENCES

Appendix A Questionnaire Form, Expertise List And Questionnaire Sample

Appendix B Projects Data Collection Sheet

Appendix C Collected Project Data

IX

92

96

97

98

100

112

113

LIST OF TABLES

No Table Page

2.1 Generic COQ models and cost categories 13

2.2 Factors Affecting COQ 37

3.1 COQ From Previous Studied 41

3.2 Importance Index Analysis 44

3.3 Factor Affecting COQ 45

3.4 The Most Important Factor Affecting COQ 46

3.5 The Influence of Awareness of Quality Team on The COQ 49

3.6 Contractors Class & Percentage of COQ 51

3.7 Client Type V s The Percentage of COQ 52

3.8 Projects Location & Percentage of COQ 54

3.9 Labor Skills & Percentage of COQ 55

3.10 Project type & Percentage of COQ 56

3.11 Supervision Team Experience & Percentage of COQ 59

3.12 Projects Size of Projects & Percentage ofCOQ 60

3.13 Planned of COQ & Percentage of COQ 61

4.1A Experiments for Determining the Best Model Group One 82

4.1B Experiments for Determining the Best Model Group Two 83

4.1C Experiments for Determining the Best Model Group Three 84

4.1D Experiments for Determining the Best Model Group Four 85

4.1E Experiments for Determining the Best Model Group Five 86

4.1F Experiments for Determining the Best Model Group Six 87

4.2 Characteristics of The Best Model 89

4.3 Actual And Predicted Percentage ofCOQ for The Test Sample 91

5.1 Factor Affecting COQ 93

x

LIST OF FIGURES

No. Figure Page

2.1 Classical View on The Left And The Modem View on The Right 15

2.2 The Responsibility of Each Stakeholder for Non-Confonnance 35

2.3 The Causes for Quality Failure 36

3.1 Experts Type Classification 42

3.2 Expert's Experience Classification 42

3.3 Top Ten Ranked Factors 47

3.4 COQ vs. Awareness of Quality Team 49

3.5 COQ vs. Projects Duration 50

3.6 COQ Percentage vs. Clients 53

3.7 COQ Percentage vs. Project Location 54

3.8 COQ Percentage vs. labor skills 56

3.9 COQ Percentage vs. Project Type 57

3.10 Influence of Project Type on COQ 58

3.11 COQ Percentage vs. Supervision Team Experience 59

3.12 COQ Percentage vs. Project Size 61

3.13 COQ Percentage vs. Plan of Improving Quality 62

4.1 Neural Network Design (Lawrence, 1994) 65

4.2 The Main Program Screen 73

4.3 The Original Generated Data Excel Sheet 74

4.4 The Program Data Input Tool 75

4.5 The Program Desired Data Sets Sizes 75

4.6 Saving the Program Data File 76

4.7 Designing The Model Parameters 77

4.8 Choosing The Data Output Locations 78

XI

4.9A Running The Program 78

4.9B Running The Program 79

4.9C Running The Program 79

4.10 Model's Output Sheet 80

4.11 Structure of The Best Model 89

5.1 F actors Affecting COQ 93

5.2 Frequency of COQ% 95

XII

REFERENCES

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(6) Dennise, B. (2000)."Cost of Quality, Quality Planning and the Bottom Line.", Vietnamese

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Construction Engineering and Management, vol. 115, iss .3, pp. 385-400.

(8) Firuzan, Y. et al. (2002). "Assessing Contractor Quality Perfonnance.", Construction

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(9) Feigenbaum, A. (1956). "Total Quality Control", Harvard Business Review, vo1.34, no.6,

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Construction Management and Economics, vol. 18, iss. 4, pp: 479-490

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98

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(17) Plunkett, et al. (1987). "A Review of the literature on Quality-Related Costs",

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(18) Rosenfeld, Y. (2009). "Cost of Quality Versus Cost of Non-quality in Construction",

Construction Management and Economics, vol: 27, iss: 2, pp.: 107 - 117)

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99

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