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Study group problem:Modelling profit, risk and quality in the construction sector- Presented by Skanska

In collaboration with the Universities of Bristol and Bath, the KTN the European Study Group with Industry sessions are bringing together some of the best mathematical minds in the UK and beyond to solve industry problems.

Our first two study group problems are presented by Heathrow Airport and Skanska, one of the UK’s leading contractors.

We have an excellent pipeline of further problems which we will make available in the coming weeks. The ESGI problems will be amenable to a wide range of different mathematical techniques.

Modelling profit, risk and quality in the construction sector Presented by Skanska

Why is construction a 1 % profit margin sector for Tier 1 companies? The nature of large infrastructure projects is that profit margins are low, especially for the main Tier 1 contractors. Such projects typically have a network of interdependency with many sub-projects and many companies involved at different tiers. Within each project there will be mixture of areas which make profit and others which lead to waste. These are likely to be tangled up. Furthermore, companies at Tiers 1 and 2 typically have lower profit margins than those in lower down tiers and yet they are often the tiers at which most risk is taken.

Download the full problem description here

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