INVESTIGATION OF THE MOST IMPORTANT FACTORS AFFECTING COST OVERRUNS IN CONSTRUCTION PROJECTS USING HYBRID SYSTEM DYNAMIC AND DEMATEL METHOD

One of the main goals of any construction is to provide a project within the budget range. However, most of the construction projects cost more than predicted. Cost overrun is a worldwide problem, but it has become a major challenge in developing countries. The purpose of this research is to identify the most important structures related to cost overrun in construction projects in Iran using the hybrid method of Systems Dynamic and DEMATEL. For this purpose, 55 factors affecting cost overruns in construction projects were identified through a literature review and classified into 6 groups. From the 55 identified factors, more important factors were selected based on the frequency and experts' opinion. Then, using the System Dynamic method, the Causal Loop Diagram of factors affecting the cost overrun and the interrelations of these factors are built in the project work process in the form of four subsystems including labors, materials, equipment, and overhead. The resulting causal loop diagram obtained from SD were used subsequently for identifying the most significant factors influencing and influenced by cost overrun through the Decision Making Trial and Evaluation Laboratory (DEMATEL) method. The ranking of the factors was determined by the amount of affecting degrees. Factors and subsystems were also divided into cause and effect groups. The results of this study indicate that lack of cash flow, lack of technical and specialized personnel, and the reworks are the most affecting factors on the cost overrun in construction projects. Also, the duration of the project, cash flow, and efficiency of the employees, respectively, are the most affected factors by the cost overrun in construction projects. Also, according to the model presented in this study, the factors in the labor subsystem with 36.3%, overhead with 24.4%, materials with 21.7%, and the equipment with 17.6%, respectively, have the most effect on the cost overrun. Finally, the most important loops related to cost overrun has been identified.