A Data Analytics Approach for Forecasting Cash Flow in Construction Projects

Hasan Mahmoud’s research aims to benefit the construction industry by providing an "owner perspective" cash flow prediction framework that allows for more accurate cash flow estimates. 

As one of the most crucial sectors in any economy, the construction industry leads the development of underlying infrastructure across the board, including industrial, transportation, environmental and commercial elements. The industry fosters and executes projects that strengthen corporate performance and is considered the largest employer worldwide, engaging and training various technical and vocational expertise. It is vital, therefore, that the construction industry maintains its financial competitive advantage through the combined performance of individual projects and collective programs to sustain its operations.

As such, there is a continuous need for owners to more accurately forecast, monitor and control project performance. While many tools have been developed to monitor both the cost and scheduled performance of construction projects, most have lacked a comprehensive integration of risk factor quantification tools and the inclusion of owner-tailored input, particularly in cash flow monitoring and prediction.

Under the supervision of Dr. Vian Ahmed and Dr. Salwa Beheiry, Hasan has successfully created, validated and tested a Cash Flow Risk Index that integrates relevant risk factors and collects and models project data to analyze contractors' default probabilities and predict time and cost overruns. In addition, he has created a metric that measures the response of project owners towards identified risks and their response strategy. Finally, Hasan has created an interactive tool for owner-developers to monitor and control the financial performance of project operations. 

Earlier this month, the first related article was accepted in the Journal of Risk and Financial Management as the first of a series of articles scheduled to come out of this study.