Second-order confirmatory factor analysis model for estimating the overall risk of change orders in road projects

Abstract

Purpose: Change orders in construction projects may lead to an increase in time and cost highlighting the need for a systematic analysis of the causes of change orders. Each cause of change orders has a probability of occurrence and impact; therefore, there is a need to reassess the causes of change orders based on the probability and impact. The purpose of this paper is to determine the risk score for each factor and develop a model for estimating the overall change orders based on the measured and latent variables. Design/methodology/approach: The research methodology consists of four parts. The first part identifies the causes of change orders in road projects from a literature review and develops the final list using the Delphi technique. The second part includes designing the final questionnaire to determine the probability and impact of each factor on the five-point Likert scale and 237 questionnaires received validity. The data were divided into training and testing sets and analyzed using AMOS software. Findings: The proposed structural equation model presents an insight into the influence of measured and latent factors, which are not obvious in the traditional equations. The main cause for change orders was a change in design. Originality/value: The results of this research are expected to improve the execution of road projects by identifying the main causes of the change orders and hence the project manager can develop a proper risk response plan.