Research On Investment Decision Of Extension Projects Based On Value Engineering

Extension project, which means the maintenance and technical modification of existing projects, has been more and more important in our industry construction in recent years. Technical modification is a necessary method keeping old enterprises active. Experience indicates that 30%~60% of capital invested can be saved through technical modification compared with building a new one of the same scale, besides equipments economization and reduction of erection time. To study the investment decision of extension projects is in favor of selecting the investment scheme, and can yield good economic returns accordingly. In this paper, a method for investment decision of extension project is developed, and the attempts that have been done are as follows:First of all, the characteristics and contents of extension project as well the procedure during the estimation of extension project are discussed in this paper. Secondly, various indexes such as function, cost, techniques and economy of the project are considered in the estimation, and an investment decision model of extension projects based on value engineering is presented subsequently. This model overcomes the defect of the traditional method, in which only the direct economic earnings are considered. And also, fuzzy comprehensive evaluation is utilized to calculate function ratio, and the determination of calculated period of the project is discussed.The decision method based on value engineering can evaluate various programs generally and objectively. It is implemented in a case and has good results.