INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA

KULLIYYAH OF ARCHITECTURE AND ENVIRONMENTAL DESIGN

DEPARTMENT OF QUANTITY SURVEYING

BAQS 1140 Economics for Quantity Surveying

Semester 1, Session 2021/2022

Assignment 1

Lecturer: Dr. Tan Chin Keng

Prepared By: AI CONSTRUCTION SDN BHD

NAME MATRIC NO

MUHAMAD ALIF AIMAN BIN NOOR AZMEE 2119355

ISKANDAR DZULKARNAIN BIN ADNAN 2113909

AJRIYA AFINA AISYAH BINTI MD DAUD 2117588

AINA ARISSA BINTI AHMAD FAUZI 2110534

AISHAH SOFEA BINTI MUHAMMAD AJIS 2117516

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 TABLE OF CONTENTS

NO. CONTENTS PAGES

1. Introduction 3

2. Market Mechanism 4
2.1 What To Produce 4
2.2 For Whom To Purchase 5
2.3 How to Produce 5
2.4 Demand 6-8
2.5 Supply 9-11
2.6 Market Equilibrium 12-13

3. Market Structure 14-16

4. Inputs or Factor of Production Required 17

4.1 Fixed Inputs 17-19
4.2 Variable Inputs 20

5. The Acquisition of the Required Inputs of Factor of Production 21

5.1 Fixed Inputs 21-26
5.2 Variable Inputs 27

6. Efforts to make the company success 28

7. Conclusion 29

8. References 30-31

9. Appendices 32-34

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1.0 INTRODUCTION
What does it mean by construction company? In general, a construction company is a sort
of business, firm, enterprise, or organisation dedicated to the construction of a wide range of
structures, including apartments, infrastructure, developments, properties, amenities, housing,
paths, pavement, roads, and highways, among other things.The proper job in the construction is to
allocate construction business sectors such as paper work, management, land investment, design,
financial arrangements, and maintenance. Construction companies can be divided into several
types based on their expertise such as Residential Building, Institutional and Commercial Building,
Specialized Industrial Construction and Infrastructure and Heavy Construction. Our company, Al
Construction, specialized in Residential Building or to be precise, in the small renovation industry.

What exactly does "small renovation company" imply? During a renovation, a kitchen
remains a kitchen and a bedroom remains a bedroom, despite the fact that repairs and alterations
are made. Painting, replacing cabinet knobs and faucets, and installing new flooring are all
examples of what this requires. The process of rebuilding a structure is frequently referred to as
"renovation." If decaying wood members are discovered, they will be removed and the area (wall,
subfloor, or roof) will be rebuilt with new wood. Our small renovation firm provides a simple
renovation project either interior or exterior, renovation calculations, and all other services that
other organisations provide.Even though our company provides a variety of services, interior
design is our specialty, which includes home decor, kitchen decor, bathroom decor, and bedroom
decor.

The increase in demand for house renovations following the Prime Minister of Malaysia's
release of the second phase of the Movement Control Order (MCO 2.0) created an opportunity for
us to enter this market. Our company, Al Construction, chose to hire 20 people to run the business,
with degrees ranging from quantity surveyor to civil engineer to interior designer to contractor to
project manager. Al Construction Company made RM 28.2 billion in profit each year, which is a
good profit for a construction company. The objective for our company is with each passing day,
we strive to improve our project management, building construction, renovation, and built-in
furniture services, consequently meeting all of our clients' and customers' needs and expectations
and providing the finest possible service. We use all of our qualified builders' and team members'
skills and experience to provide the greatest work possible, and this is our main goal and ambition.
Price also acts as a balance wheel in the market mechanism.

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2.0 MARKET MECHANISM
A market can be defined as the organization exchange of a commodity between buyers and
sellers within a specific geographic area and in a given period of time. Everything in the market
system has a price, which represents the terms on which people and companies freely exchange
for various commodities. In the market system, price also serves as a balance wheel. All
construction companies put a higher price on our services because it can reduce consumer purchase
but encourage production but still as reasonable as we can give. The higher price is due to the fact
that renovation projects require a lot of highly skilled-labour and high-grade products in order to
maintain our work's quality.

In addition, there are three common economic issues: what to produce, for whom to
produce, and how to produce.

WHAT TO PRODUCE

This difficulty is remedied by defining the consumer's purchase choice, which in our case
requires confirmation and agreement from both our company and our customer regarding the type
of renovation they want, the number of square feet they want to renovate their home, and the theme
they want. In a simple word, our company provides renovation services for houses.

For instance, if our client has consented to renovate only their bedroom and simply wants
an aesthetic theme, our labourers and project managers can devote all of their attention and effort
to fulfilling the client's request. Other than that, our company also can purchase the correct
commodity for the renovation project in order to avoid loss.

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FOR WHOM TO PURCHASE

The second economics issue is for whom to produce.This problem can be handled by
locating those who are in favour of our services and including additional parties who benefit from
them.As far as our firm is concerned, the services will undoubtedly be provided for clients or firms
interested in renovating a bungalow, apartment, or any other form of home.

For instance, house renovations are currently high in demand for those who want a
renovation for their bedroom, kitchen, living room and even their entire property after the
announcement of the Movement Control Order (MCO) phase 2. For additional information,
according to ChannelNewsAsia, renovation project demand in Malaysia, particularly in the Klang
Valley, is increasing, but contractors are experiencing labour and supply shortages. In short,
Renovation company is a good idea to invest in because the demand is high and it can give our
company a great starter.

HOW TO PRODUCE

The final major economic issue is how to produce. It can be solved by determining producer
competition, meeting price competition, and maximising profit by using the most efficient
techniques of production. Inshort, it means that our company, which is Al construction company,
needs to figure out the best possible way to maximise profit at the lowest feasible cost.

There is no competition for our company because our company is based in Setia Alam,
Selangor, a developing city, and there is currently no renovation company in the area. Only large
corporations from various fields of competence operate in the area. Top glove, Proton, Audi, and
Racuntech are just a few examples.

Then, in order to improve our profit, our organisation must determine how to produce
service by searching for the greatest accessible material to construct with, as well as recruiting
skilled professionals at the lowest possible cost.

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DEMAND
Buyers' desire to buy a certain amount of goods due to their ability and willingness to buy
it at a specific price in a specific time frame is referred to as demand. Market demand includes the
law of demand, which states that quantity demanded is related to a price. It means that the higher
the price of a product, the lower the quantity demanded, or the lower the price of a product, the
larger the quantity demanded.

One of the demands our company faces as a construction company is market demand,
which is calculated by adding the total of multiple consumer demand in the present market based
on the client's preference. There are many different types of house renovations, such as living room
renovations, bathroom renovations, bedroom renovations, and kitchen renovations, to name a few.
However, kitchen and living room renovations are currently fashionable and well-known among
Setia Alam residents.

Price (RM) based on square feet Demand for services

10000 (200 square feet) 25

20000 (250 square feet) 20

30000 (300 square feet) 15

40000 (350 square feet) 10

50000 (400 square feet) 5

Table for demand of Living room Renovation.

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 Graph for demand of Living room Renovation.

Price (RM) based on square feet Demand for services

20000 (100 square feet) 15

30000 (150 square feet) 12

40000 (200 square feet) 9

50000 (250 square feet) 6

60000 (300 square feet) 3

Table for demand of Kitchen Renovation

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 Graph for demand of Kitchen Renovation.

We can observe from the graphs and tables above that quantity demanded has an inverse
relationship, as explained previously. Furthermore, because it serves as a family meeting place,
the demand for living room renovation is higher than the kitchen renovation. When you return
home from a long day at work, it is the first room you see, thus, It should be warm and inviting.

It might be referred to as the non-price factor in this situation because it includes

consumers' income, consumers' expectations on future prices, income and supply, price of other
goods, and the quantity of consumers. These non-price factors can influence demand graph shifts,
whether demand is increasing or falling.

D1= An increase in demand

D2= A decrease in demand

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SUPPLY

The law of supply that has been applied in this case for the supply pattern is that the amount
delivered is related to a price. The link between product price and amount supplied is that the
higher the product price, the larger the quantity supplied, and the lower the product price, the lower
the quantity supplied. In comparison to the demand pattern, it is inverted.

Al Construction company is offering a service based on the price and what kind of services
the client wants. The renovation project can be counted using square feet for a fixed price. For
example, if the client wants to renovate their kitchen, our workers will take the total space of the
kitchen using square feet and for this moment, a 100 square feet kitchen will cost about RM 20000.
Our company will try to keep the budget as low as possible while still maintaining the quality of
the project.

Price (RM) based on square feet Services provided

10000 (200 square feet) 2

20000 (250 square feet) 4

30000 (300 square feet) 6

40000 (350 square feet) 8

60000 (400 square feet) 10

Table for services provided for Living room Renovation.

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 Graph for services provided of Living room Renovation.

Price (RM) based on square feet

Services provided

20000 (100 square feet) 4

30000 (150 square feet) 5

40000 (200 square feet) 6

50000 (250 square feet) 7

60000 (300 square feet) 8

Table for services provided of Kitchen Renovation

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 Graph for services provided for Kitchen Renovation.

By looking at the graphs above, we can see that supply and demand are inextricably
linked, and that when prices rise, so do the services provided to clients. Both ceramic and
hardwood finishing required a team of professional personnel to assure the greatest
possible condition of our final product.

In which, as a non-price factor, equipment expertise and technology alter the supply
graph. Non-price factors in the supply graph include the price of resources, price
expectations, government regulations, the price of other items, and the number of
producers. Which, in our instance, falls under the category of technology, as having a
superior set of equipment has an indirect impact on the number of services provided.

S1= A decreasing in supply

S2= An increasing in supply

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MARKET EQUILIBRIUM
When opposing forces are exactly offset from one another and there is no inherent
tendency for change, equilibrium exists; in other words, both forces are balanced. When
demands and suppliers exchange a mutually agreed quantity at a mutually agreeable price,
market equilibrium is achieved. For example, our company and our clients both agreed on the
costs offered for the services we provided to construct their flooring as well as the finishes they
required.

The equilibrium price and quantity are also affected by equilibrium, with the equilibrium
price being the price that equates the quantity demanded and provided in the market. For our
company, market equilibrium happens at the price of RM40000 with the quantity services at 6
for the kitchen renovation services.

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 Surplus

When the market is not in equilibrium, there will only be two possibilities: surplus or
shortage happen. Surplus occurs when the amount of service provided by our organisation
exceeds the number of clients who have requested our service. To address this issue, Al
Construction company might reduce service rates in order to increase the quantity required,
causing clients to choose to pay us more. It is difficult to reduce our service pricing because our
firm uses highly skilled labour and high-quality products during the renovation process. As a
result, Al construction company must ensure that this plan benefits both the provider and the
demand.

Shortage

In terms of shortage, the number of services required for our renovation project exceeds
the number of services our organisation can provide. The best method to tackle this type of
shortage problem is to raise our service prices so that the number of people who want to use our
service reduces. This is not a loss, but rather a means of balancing demand and supply in order to
achieve equilibrium. As a company, we are pleased to be paid a higher price for our services, and
we are eager to produce higher quality and quantity service in order to eliminate shortages.

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3.0 MARKET STRUCTURE
Perfect Competition

As for AI Construction company particularly in housing construction, perfect competition

is the most suitable market structure that suits the company because of the characteristics of it such
as our company does included in the companies that non-stop competing among ourselves in the
industry, this company can also enter and exit the market freely, the services that we provided for
our clients is homogeneous with the other housing constructions companies and lastly the
companies in this industry including AI Construction Company are all price taker but not price
maker.

Our ongoing process of renovating client’s house

1. Many Competing Firms

There are many firms in the industry including AI Construction Company, therefore each firm is
very small and has no influence on the market price. This means that firms are known as ‘price
takers’. In other words, our company and others must sell at the ‘equilibrium’ price, this is where
we sell when supply and demand align. If not, our company will go out of business, as there are
many other firms that sell the same goods/services at a lower price. As a result, clients have little
cost of switching to a substitute good. The number of competitors in the market means that each
company is prevented from raising prices. If one of the firms do, then they will be forced out of
the market as consumers are able to switch to cheaper alternatives. We should really consider if
we want to put a higher price on the constructions, otherwise clients can easily switch to other
construction companies that can give them better services and prices.

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2. Ease of Entry and Exit

AI Construction Company can enter and exit the market with little cost. This can come in the form
of financial, time, or information. For instance, the construction industry requires a high level of
up-front investment. As such, this is a barrier to entry for the competitors. Under perfect
competition, these costs do not exist or are in fact insignificant. Additionally, our firm is able to
exit the market with ease under perfect competition. For example, a firm may have a long-term
contract. But they are unable to leave the market without significant costs.

3. Products are homogeneous

In perfect competition, competitors provide or sell similar products. This is otherwise known as
‘homogenous’ meaning the products are similar. Small businesses may be indistinguishable to the
average customer. As a result, the ability and willingness for the clients to switch to the other firms
are easy and costless. For instance, AI Construction Company does provide the same service as
the other construction companies which are constructions, so if there's a company among these
firms that is unfamiliar to the clients or the services they provided are known bad, the company
will easily go out of business.

4. Firms are price takers and not price maker

A perfectly competitive firm is known as a price taker, because the pressure of competing firms
forces them to accept the prevailing equilibrium price in the market. If a firm in a perfectly
competitive market raises the price of its product by so much as a penny, it will lose all of its sales
to competitors. When a wheat grower, as discussed in the Bring it Home feature, wants to know
what the going price of wheat is, he or she has to go to the computer or listen to the radio to check.
The market price is determined solely by supply and demand in the entire market and not the
individual farmer. Also, a perfectly competitive firm must be a very small player in the overall
market, so that it can increase or decrease output without noticeably affecting the overall quantity
supplied and price in the market.

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Perfect Competition in the Short Run: In the short run, it is possible for an individual firm to make
an economic profit. This scenario is shown in this diagram, as the price or average revenue,
denoted by P, is above the average cost denoted by C.

Perfect Competition in the Long Run: In the long-run, economic profit cannot be sustained. The
arrival of new firms in the market causes the demand curve of each individual firm to shift
downward, bringing down the price, the average revenue and marginal revenue curve. In the
long-run, the firm will make zero economic profit. Its horizontal demand curve will touch its
average total cost curve at its lowest point.

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4.0 INPUTS OF PRODUCTION
4.1 Fixed Inputs

Office Building

In business, capital can refer to a variety of tangible and intangible assets. Office building
is one of the examples of capital that is considered as a tangible asset because it is a physical and
measurable asset that is used in the company’s operations. Since the company is a construction
company that provides services, the company needs to purchase or rent an office building in order
to make it easier for clients to deal with the firm about the services demanded by them. In addition,
the purpose of the office building is to control the performance of the company and provide
comfort and positive surroundings to employees. Moreover, the firm is operating in the short run
production function which means once the entrepreneurs sign a lease of the building, they are
obligated to stay in the building until it expires and they cannot choose a larger or smaller building
because it is limited to use the current building. The company also will purchase office equipment
in the certain amount depending on the company’s budget and its necessity.

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Tools and Machineries

Tools and machinery are another capital that will be used in the renovation services by the
firm. As a short run firm, the company decided to purchase tools and machinery with high quality
to ensure that the equipment lasts longer and it can help workers to make their work easier. In the
world of construction, it is vital to prioritize the safety of laborers in order to maintain and improve
the quality of their works. Therefore, the company has to provide safety vests, dust goggles, gloves
and steel toe boots to prevent any injuries while doing the renovation works and the labourers must
wear them before the commencement of renovation work.

Steel toe shoes dust goggles and mask and safety gloves
protective helmet

Meanwhile, for the renovation works, the company will purchase tools like hammers,
screwdrivers, ladders, pliers, measuring tapes, adjustable wrench, screed and other basic
renovation tools. Besides, there are several machines that will be purchased by the company to do
the work such as a concrete mixer, drill machine, vibrator, circular saw machine and many more.
All these tools and machinery will remain as long as possible because the company does not intend
to exchange them unless the firm turns into a long-run production function in the future.

Tools Concrete Mixer Drill

Tools and machinery

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Land

Land is natural resources which are used by man in production. It is also considered as the
primary factor of production because it is rich in coal, water and petroleum, which are used for
generating power such as electricity. In order to provide services to the clients, the firm purchases
machines that use energy from earth to help workers do their work in the easiest way instead of
using hand tools. In addition, using machines in construction or renovation work can shorten the
time required to complete the project. Currently, most of the machines are using electricity to
generate power but there is no denying that there are some machines that still use petroleum as
their power source. It is therefore, land is a most vital input that is used by man in production,
besides the supply of land is fixed because it cannot increase or decrease like other factors of
production like labour.

Coal Water Petroleum

Power sources

In the construction industry, not only machines need natural resources from the land to
enable its function, the land also produces raw materials such as bricks, cement, wood, glass and
various other materials that are the source for the industry to build buildings and infrastructures.
In short, everything around us comes from land because it was considered to be the original and
inexhaustible gift of nature. Even Though the company is providing services, the company also
will purchase various types of raw materials according to the clients’ demand and give the best
services to them so that they will tend to demand more services from our firm.

Brick Wood Cement

Raw Materials

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4.2 Variable Input

Labour

Labour refers to the sum of all human physical and mental efforts put into the development
of commodities and services with the goal of making money. According to Marshall, any exertion
of mind or body undergone partly or wholly with a view to some good other than the pleasure
derived directly from the work is called labour. Labourers are considered the backbone of an
organization or a firm since they are the one who supply their energy and services to the clients.
A sufficient number of workers must be engaged based on the job’s requirements, and the financial
allocation by the firm. There are so many companies that categorize labour as part of fixed inputs
since they are hired by the skills they have and it is profitable to keep those labourers as long as
they are responsible, disciplined and show improvement throughout the work. However, as a short-
run firm, labour is considered as variable input since it can be increased and decreased based on
the services demanded by clients. It means the greater services demanded by clients, the company
will also hire more labourers and if demand decreases, the firm has to fire the workers who lacked
focus while doing their work. In short, the firm will hire labour as long as the marginal revenue
product of it does not exceed the market price which is the wage.

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5.0 THE ACQUISITION OF THE REQUIRED INPUTS OF
PRODUCTION
5.1 Fixed Input

Office Building

An office building is a reflection of our renovation construction company. When customers

and clients see our office, they are seeing our professionalism on display and will judge
accordingly. Furthermore, an office is our work environment. If it is organized and conducive to
our employees, then we will enjoy an unrestricted ability to grow our company. However, getting
a proper office can be a time-consuming and costly endeavor, which is why rentals can be the best
choice for our small renovation construction business looking to set up.

Rental Office building is a more plentiful and more affordable option that gets our business set up
in what would normally be an unaffordable locale. We can have access to key downtown amenities
and prime business locations to better attract and appeal to clients and customers.

Tools and Machinery

a) Tools

The term ‘tools’ have been integral to the renovation construction of building, for the
earliest use of timber, bone, antler, stone and so on for cutting, scraping, chopping, hammering
and moving, to the development of modern power tools enabling renovation activities to be
performed more quickly and accurately or with fewer people. Tools might be hand tools, power
tools and machine tools. Hand tools such as, screwdrivers, brushes, trowels, wrenches, knives,
crimpers, clamps. Tools also might be power tools which may be powered by electricity,
compressed air, liquid fuel, hydraulic power or powder-actuated and might include such as mixers,
saws, cutters, drills, guns, breakers. Machine tools are used for shaping materials into components
by cutting, boring, grinding and so on. Tools may be general tools such as shelves and hammers
or specialist tools such as electrical tools or measuring devices and some tools are multi-functional.

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 Renovation construction tools are generally reusable, and so as well as we will be
purchased new, and we may be purchased second hand or hired. However, the quality of a tool
that has already been used may not be clear, and so we should only be obtained from reputable
sources, and carefully inspected before use. It is important that the correct tools are available to
carry out the works, otherwise there may be delays, or attempts to carry out the works with an
inappropriate tool which can cause damage, improper installation or safety issues. However, there
can be a tendency to oversupply tools or to obtain over-sized tools ‘just in case’ which can lead to
similar problems.

It is important that workers are properly trained in the use of tools and that they are supplied
with appropriate information for their safe operation along with any necessary personal protective
equipment (PPE). PPE should not interfere with the proper use of the tool, for example, safety
glasses fogging, or gloves making it difficult to operate controls.

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 THE LIST OF TOOLS REQUIRED IN RENOVATION PROJECT

HAND TOOLS

No. Items Quantity Description

1. Hammers 4 Used for pushing in nails, pulling out nails and

demolishing material.

2. Wrenches One set Tighten or loosen a nut by twisting the tool.

3. Saws (manual) 2 Cut the wooden material

4. Chisel 4 To remove the settled mortar from the floor

5. Measuring tape 5 To accurately measure out the sizes and distances of

different elements.

6. Screwdrivers One set Used to twist in screws by matching up their heads

with the requisite bit.

7. Shovels 3 Used to dig through soil and dirt that to the wedge
and scoop at one end.

8. Trowel 3 To lift and apply the cement mortar in small

quantities.

9. Hoe 3 To break up the surface of the soil.

10. Polisher 1 To smoothen the surface of tiles, wood works and

Others.

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 POWER TOOLS

1. Concrete mixer 1 To mix the material for preparing the concrete.

2. Drill Machine 2 To make a hole in walls, slabs, doors, window

frames.

3. Wall chaser 1 To cut narrow spaces in brick, stone or concrete

walls.

4. Jackhammer 1 To break stone or concrete.

5. Router 2 To hollow out a small space in wood or plastic

materials.

6. Sanders 2 To smoothen the wooden surface.

7. Impact driver 2 To spin a screw into a place with an instant.

8. Nail gun 3 To install nails into wooden surface at incredible

speeds

9. Circular saw 3 To cut steel rods and wooden materials.

10. Welding Torch 2 To melt or cut metal rods such as tin, aluminium and
steel.
5.1(a) Table 1

According to Table 1, this data collection is known as a tender document. This document contains
a complete list of items that notify us about the amount of quantity required and to specify the
details of each type of tool by using the Standard Measurement Method. Therefore, the document
can be a competition which is equivalent and fair in the process of tendering. Tenderer will set up
the price of each item according to the amount of quantity required and the total quantity will
become the price of the tender that is bidded. However, bidders that are chosen to be in charge of
the building construction will become a contractor for the project.

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 b) Machinery

The term ‘machinery’ is being used largely in construction, industrial buildings, road work and the
others to pick up, carry, transfer, loosen, distribute or classify stone or soil. These machines are
adaptable and could remove most of the dangers that are involved with physical materials
management if they are used appropriately. This sort of machinery is extremely convenient and is
used all around the world. Most of the tasks have become easier and faster. Nevertheless,
innovations have evolved which includes from wheel barrowing to concrete pumping and from
manual lifting of materials to crane-assisted lifting of various materials.

Earth-moving equipment is ubiquitous across applications in the renovation construction industry.

They are used for a wide range of earthworks including laying foundations, grading soil, removing
dirt and rocks, digging trenches, and demolition works. These complex machines are operated by
professionals. Different types of earth-moving machines are capable of accomplishing different
types of tasks and owing to technological advancements in the industry, today there are various
types of earth-moving machinery available in the market capable of catering to almost any kind of
construction activities.

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 THE LIST OF HEAVY MACHINES REQUIRED IN RENOVATION PROJECT

MACHINERY

No. Items Quantity Description

1. Excavator 1 Used in excavation, demolition, heavy lifting,

grading, landscaping, mining, dredging and
more.

2. Backhoe Loader 1 To excavate the earth up to 3m depth,

landscaping, breaking asphalt, paving roads and
as light transportation of building materials.

3. Bulldozer 1 To push earth or rocks and level the earth

surface

4. Pile drilling 1 To strengthen the soil in the ground and provide

machine foundation support of the building.

5. Mobile crane 1 To lift heavyweight objects and move them in

short distances.

6. Hydra crane 1 To lift and carry the load of materials.

7. Power generator 1 It pays to be prepared when there is an issue

with electricity blackouts.
5.1(b) Table 2

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5.2 Variable Input

Labor Productivity

Since labor constitutes a large part of the construction cost and the quantity of labor hours
in performing a task in construction is more susceptible to the influence of management than are
materials or capital, this productivity measure is often referred to as labor productivity. However,
it is important to note that labor productivity is a measure of the overall effectiveness of an
operating system in utilizing labor, equipment and capital to convert labor efforts into useful
output, and is not a measure of the capabilities of labor alone. By investing in a piece of new
equipment to perform certain tasks in our construction, output may be increased for the same
number of labor hours, thus resulting in higher labor productivity.

The market demand in construction fluctuates greatly, often within short periods and with
uneven distributions among geographical regions. Even when the volume of construction is
relatively steady, some types of work may decline in importance while other types gain. Under an
unstable economic environment, employers in the construction industry place great value on
flexibility in hiring and laying off workers as their volumes of work wax and wane. On the other
hand, construction workers sense their insecurity under such circumstances and attempt to limit
the impacts of changing economic conditions through labor organizations.

There are many crafts in the construction labor forces, but most we hire 20 from only a few
of these crafts to satisfy their specialized needs. Because of the peculiar characteristics of
employment conditions, employers and workers are placed in a more intimate relationship than in
many other industries. Labor and management arrangements in the AI Construction Sdn.Bhd
industry include both unionized and non-unionized operations which compete for future
dominance. Dramatic shifts in unionization can occur.

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6.0 EFFORTS TO MAKE COMPANY SUCCESS
A lot of companies have their own unique strategies for making their business successful
in order to expand the business growth all over the world. Therefore, AI Construction Sdn Bhd has
come up with ideas to make the company successful and gaining booming profits.

First and foremost is to modify employee working hours. Every company wants to create
maximum profits that can only be achieved if the company is able to acquire the highest level of
business performance in which the employees of the organization play a very important role.
Hence, AI Construction Sdn Bhd has decided to manage and make some changes regarding
employee schedules so that they can work in a shorter period of time with breaks. This is to ensure
that they are always energetic and not exhausted by continuous working hours which can reduce
the performance of our construction company. Our company will adjust employee schedules to
maximize efficiency as well as to reduce costs after adhering to different schedules.

In addition, for our renovation company to strive for success, we will provide adequate
training and development programs specifically for our employees. By providing skilled training,
it can not only help strengthen employee satisfaction but also generate endless benefits for the
company. Training initiatives should be well planned by the management team and properly
funded and designed to meet organizational and employee goals. This effort will motivate the
employees to improve and move up in the organization. It can also positively affect employee
productivity to maximize profits as well as increase work efficiency.

Moreover, AI Construction Sdn Bhd has to ensure its quality to be the top among the other
construction companies by using more quality building materials as a source for the house
renovation projects. By using quality building materials, we can ensure lower maintenance
requirements for clients to handle which can be a result of satisfaction as it has long life
expectancy. Product performance is very important because the greater the attention to product
quality in production, the fewer the demands on the customer service operation to correct
subsequent problems which can positively reduce excessive spending of money for maintenance.

Furthermore, company advertising is also a vital factor for success. Nowadays, social
media platforms have been widely used by all levels of people from childrens to adults. This is the
easiest and convenient way of promoting our renovation company, especially through media
sharing via the company's own Youtube, social media such as the official Instagram page or
Facebook to help people realize about the AI Construction company. People need to learn about
our services and details first before engaging and dealing with our company, and that is what
advertising does which is to introduce a company in detail and attract people to use our services.
The more people know the product, the better the profit the company can make. In addition,
companies need to make their ads unique and compelling so that people are willing to see them.

28
7.0 CONCLUSION
In conclusion, AI Construction Sdn Bhd is confident that the housing renovation business
can thrive and improve the quality of services to meet customer satisfaction. Our renovation
construction company promises fast and efficient services in line with its vision to be a viable
and competitive business entity. We also hope that we can deliver our objectives on improving
the project management and system consequently to meet our clients’ expectations by giving our
best as well as providing our well-trained and qualified employees skills in order to offer the best
services possible.

Moreover, AI Construction company strives to be consistent in providing excellent

service while being innovative and creative in the renovation process. Our construction company
offers renovation services using high quality tools and machineries as well as good building
materials to give the best outcome for the clients which can help our business to expand more in
the construction industry. In addition, we hope the business can run more efficiently and grow
nationwide and in turn contribute to the national economy.

Furthermore, in relation to the pandemic that hit the whole country especially from the
economical aspect, AI Construction Company has received high demand of house renovation
services which can further help the company to survive in facing economic problems in Malaysia
while following the standard operation procedures as stated by the government. Although our
company is competing with other similar businesses in the market, AI Construction Sdn Bhd will
do the best in maintaining our position at the highest as one of the top notch construction
companies in the country.

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8.0 REFERENCES

1. A. (2020, April 10). What are the Various types of Construction Companies?
ConstructionPlacements.
https://www.constructionplacements.com/construction-companies/

2. Static Malaysia. (2018, January 12). Department of Statistics Malaysia Official Portal.
Department of Statistics Malaysia. Retrieved November 16, 2021, from
https://www.dosm.gov.my/v1/index.php?r=column/ctwoByCat&parent_id=76&menu_id
=OEY5SWtFSVVFVUpmUXEyaHppMVhEdz09

3. Tan, V. (2021, October 6). Renovation demand in Malaysia’s Klang Valley rises as
COVID-19 curbs ease, but contractors face labour and supply issues. CNA.
https://www.channelnewsasia.com/asia/malaysia-klang-valley-covid-19-renovation-
demand-rises-contractor-labour-shortage-rising-material-costs-2222496

4. Taylor, G. (2019, September 19). What’s the Difference: Renovation vs. Remodel? Bob
Vila. https://www.bobvila.com/articles/renovation-vs-remodel/

5. A, s. (n.d.). Land in Economics: Notes, Characteristics, Functions, Importance and

Productivity. economics discussion. https://www.economicsdiscussion.net/land/land-in-
economics-notes-characteristics-functions-importance-and-productivity/31125

6. Costello, J. (2019, april). It’s Tool Time: The Ultimate List of Home Renovation Tools
and Equipment You Need. CONTRACTORS FROM HELL.
https://contractorsfromhell.com/its-tool-time-the-ultimate-list-of-home-renovation-tools-
and-equipment-you-
need/#:~:text=Basic%20Home%20Renovation%20Tools.%20Whether%20you%20are%
20planning,home%20remodeling%20tools%3A%20Extension%20cords.%20A%20ham
mer.%20

7. fixed input. (n.d.). amosweb. https://www.amosweb.com/cgi-

bin/awb_nav.pl?s=wpd&c=dsp&k=fixed+input

8. 40+ Construction Tools List with Images for Building Construction. (n.d.). The
Constructor, Building ideas. https://theconstructor.org/construction/construction-tools-
list-images-building/20238/

9. Murphy, C. B. (2021, april). How Do Tangible and Intangible Assets Differ?

Investopedia. https://www.investopedia.com/ask/answers/012815/what-difference-
between-tangible-and-intangible-
assets.asp#:~:text=Tangible%20assets%20are%20typically%20physical%20assets%20or
%20property,a%20monetary%20value%20since%20they%20represent%20potential%20r
evenue

30
10. Production of Short Run. (n.d.). OS Microeconomics.
https://courses.lumenlearning.com/suny-microeconomics2/chapter/production-in-the-
short-run/

11. Shaikh, D. (n.d.). Labour: Meaning, Kinds and Importance | Economics. economics
discussion. https://www.economicsdiscussion.net/labour/labour-meaning-kinds-and-
importance-economics/13749

12. Short run. (n.d.). corporate finance institute.

https://corporatefinanceinstitute.com/resources/knowledge/economics/short-run/

13. Designing Buildings Ltd. 2021. (2021, June 15). Construction Tools. Designing
Buildings. https://designingbuildings.co.uk/wiki/Construction_tools

14. Dutch-American Engineering Construction Company. (2019, September 19). Always

Use the Right Tools. https://dutchamengr.com/en/always-use-the-right-tools/index.htm

15. Carnegie Mellon University. (n.d.). Labor, Material and Equipment Utilization.
https://www.cmu.edu/cee/projects/PMbook/04_Labor,_Material,_And_Equipment_Utiliza
tion.html

16. Capital Critical Care. (2008). Perfect Competition. Economics Online.

https://www.economicsonline.co.uk/Business_economics/Perfect_competition.html

17. de Valence. (2017, August 31). Market Structure in Building and Construction.
Construction Industry Economics and Policy. https://gerard-de-
valence.blogspot.com/2017/08/market-structure-in-building-and.html?m=1

18. Principle of Economics. (n.d.). Pressbook.

https://opentextbc.ca/principlesofeconomics/chapter/8-1-perfect-competition-and-why-it-
matters/

19. BOYCE, P. (2021, march 29). Perfect Competition Definition. BoyceWire.

https://boycewire.com/perfect-competition-definition/

20. Perfect Competition. (n.d.). lumen (Boundless Economics).

https://courses.lumenlearning.com/boundless-economics/chapter/perfect-competition/

31
9.0 APPENDICES
1. Type of construction company

Construction companies can be divided into several types based on their expertise such as
Residential Building, Institutional and Commercial Building, Specialized Industrial Construction
and Infrastructure and Heavy Construction

A. (2020, April 10). What are the Various types of Construction Companies?
ConstructionPlacements.
https://www.constructionplacements.com/construction-companies/

2. Renovation meaning
The process of rebuilding a structure is frequently referred to as "renovation." If decaying wood
members are discovered, they will be removed and the area (wall, subfloor, or roof) will be
rebuilt with new wood

Taylor, G. (2019, September 19). What’s the Difference: Renovation vs. Remodel? Bob Vila.
https://www.bobvila.com/articles/renovation-vs-remodel/

3. Renovation demand in Malaysia

Renovation demand in Malaysia's Klang Valley rises as COVID-19 curbs ease

Tan, V. (2021, October 6). Renovation demand in Malaysia’s Klang Valley rises as COVID-19
curbs ease, but contractors face labour and supply issues. CNA.
https://www.channelnewsasia.com/asia/malaysia-klang-valley-covid-19-renovation-demand-
rises-contractor-labour-shortage-rising-material-costs-2222496

4. Profit for renovation company

The value of construction work done in third quarter 2021 contracted by 21.0 per cent to RM24.8
billion

Static Malaysia. (2018, January 12). Department of Statistics Malaysia Official Portal.
Department of Statistics Malaysia. Retrieved November 16, 2021, from
https://www.dosm.gov.my/v1/index.php?r=column/ctwoByCat&parent_id=76&menu_id=OEY5
SWtFSVVFVUpmUXEyaHppMVhEdz09

32
 5. Fixed Inputs

Building - Office building is one of the examples of capital that is considered as a tangible asset.

Murphy, C. B. (2021, april). How Do Tangible and Intangible Assets Differ? Investopedia.
https://www.investopedia.com/ask/answers/012815/what-difference-between-tangible-and-
intangible-
assets.asp#:~:text=Tangible%20assets%20are%20typically%20physical%20assets%20or%20pro
perty,a%20monetary%20value%20since%20they%20represent%20potential%20revenue

Land - considered as the primary factor of production because it is rich in coal, water and
petroleum, which are used for generating power.

A, s. (n.d.). Land in Economics: Notes, Characteristics, Functions, Importance and Productivity.

economics discussion. https://www.economicsdiscussion.net/land/land-in-economics-notes-
characteristics-functions-importance-and-productivity/31125

6. Variable Input

Labour - According to Marshall, any exertion of mind or body undergone partly or wholly with a
view to some good other than the pleasure derived directly from the work is called labour.

Shaikh, D. (n.d.). Labour: Meaning, Kinds and Importance | Economics. economics discussion.
https://www.economicsdiscussion.net/labour/labour-meaning-kinds-and-importance-
economics/13749

7. The Acquisition of The Required inputs

Office building- An office building is a reflection of our renovation construction company.

When customers and clients see our office, they are seeing our professionalism on display and
will judge accordingly.

https://innovativeprofessionaloffices.com/blog/benefits-of-renting-an-office-space

Tools- The term ‘tools’ have been integral to the renovation construction of buildings, for the
earliest use of timber, bone, antler, stone and so on for cutting, scraping, chopping, hammering.

Dutch-American Engineering Construction Company. (2019, September 19). Always Use the
Right Tools. https://dutchamengr.com/en/always-use-the-right-tools/index.htm
Labors- Since labor constitutes a large part of the construction cost and the quantity of labor
hours in performing a task in construction is more susceptible to the influence of management
than are materials or capital, this productivity measure is often referred to as labor productivity.
Labor, Material and Equipment Utilization. (n.d.).
https://www.cmu.edu/cee/projects/PMbook/04_Labor,_Material,_And_Equipment_Utilization.ht
ml

33
 8. Perfect Competition
A perfectly competitive market is a hypothetical market where competition is at its greatest
possible level. Neo-classical economists argued that perfect competition would produce the best
possible outcomes for consumers, and society.

Capital Critical Care. (2008). Perfect Competition. Economics Online.

https://www.economicsonline.co.uk/Business_economics/Perfect_competition.html

9. Market Structure in Building Construction

The importance of industry structure to industry economics lies in the way that structure is seen as
the most important determinant of competition in an industry, and the form that competition takes.
The appropriate model of the construction industry's market structure will depend on the definition
of industry products or markets adopted and the sector of the industry that is to be analysed.

de Valence. (2017, August 31). Market Structure in Building and Construction.

Construction Industry Economics and Policy. https://gerard-de-
valence.blogspot.com/2017/08/market-structure-in-building-and.html?m=1

10. Perfect Competition and Why it Matters

A perfectly competitive firm is known as a price taker, because the pressure of competing firms
forces them to accept the prevailing equilibrium price in the market. If a firm in a perfectly
competitive market raises the price of its product by so much as a penny, it will lose all of its
sales to competitors.

Principle of Economics. (n.d.). Pressbook.

https://opentextbc.ca/principlesofeconomics/chapter/8-1-perfect-competition-and-why-it-matters/

11. Characteristics of Perfect Competition

Although perfect competition is based on a number of assumptions, that in reality, rarely exist –
there are some close examples. With that said, there are a number of key characteristics of
perfect markets that identify them as such.

BOYCE, P. (2021, march 29). Perfect Competition Definition. BoyceWire.

https://boycewire.com/perfect-competition-definition/

12. Conditions of Perfect Competition

A firm in a perfectly competitive market may generate a profit in the short-run, but in the long-
run it will have economic profits of zero.
Perfect Competition. (n.d.). lumen (Boundless Economics).
https://courses.lumenlearning.com/boundless-economics/chapter/perfect-competition/

34