Project Cost Estimating Tools & Techniques

Image result for estimation and costing images

Project Cost Estimating
Tools & Techniques

Project cost estimating scares a lot of people. They don't know how much something will cost, but they know whatever value they give, they will be held to it by their manager.

The challenge with estimating is that it always involves some uncertainty. Some of the factors that contribute to this uncertainty include...
  • Experience with Similar Projects:
    The less experience you have with similar projects, the greater the uncertainty. If you've managed similar projects, you will be able to better estimate the costs of the project.
  • Planning Horizon:
    The longer the planning horizon, the greater the uncertainty. The planning horizon you are considering may be the whole project or just a certain phase. Either way, you will be able to better estimate costs for the time periods that are closer to the present.
  • Project Duration:
    The longer the project, the greater the uncertainty. This is similar to planning horizon in the sense that if a project is of a shorter duration you are more likely to account for most of the costs.
  • People:
    The quantity of people and their skill will be a huge factor in estimating their costs. Early in the project, you may not even know the specific people that will be on the project. That will increase the uncertainty of your cost estimates.
Fortunately, there are some tools and techniques used by professional project managers that you can use to develop more accurate cost estimates.
Fortunately, there are some tools and techniques used by professional project managers that you can use to develop more accurate cost estimates.
Expert JudgmentExpert judgment uses the experience and knowledge of experts to estimate the cost of the project. This technique can take into account unique factors specific to the project. However, it can also be biased.
Analogous EstimatingAnalogous estimating uses historical data from similar projects as a basis for the cost estimate. The estimate can be adjusted for known differences between the projects. This type of estimate is usually used in the early phases of a project and is less accurate than other methods.
Parametric EstimatingParametric estimating uses statistical modeling to develop a cost estimate. It uses historical data of key cost drivers to calculate an estimate for different parameters such as cost and duration. For example, square footage is used in some construction projects.
Bottom-Up EstimatingBottom-up estimating uses the estimates of individual work packages which are then summarized or "rolled up" to determine an overall cost estimate for the project. This type of estimate is generally more accurate than other methods since it is looking at costs from a more granular perspective.
Three-Point EstimatesThree-point estimates originated with the Program Evaluation and Review Technique (PERT). This method uses three estimates to define an approximate range for an activities cost: Most Likely (Cm), Optimistic (Co), and Pessimistic (Cp). The cost estimate is calculated using a weighted average: Cost Estimate = (Co + 4Cm + Cp)/6
Reserve AnalysisReserve analysis is used to determine how much contingency reserve, if any, should be allocated to the project. This funding is used to account for cost uncertainty.
Cost of QualityCost of Quality (COQ) includes money spent during the project to avoid failures and money spent during and after the project due to failures. During cost estimation, assumptions about the COQ can be included in the project cost estimate.
Project Management Estimating SoftwareProject management estimating software includes cost estimating software applications, spreadsheets, simulation applications, and statistical software tools. This type of software is especially useful for looking at cost estimation alternatives.
Vendor Bid AnalysisVendor analysis can be used to estimate what the project should cost by comparing the bids submitted by multiple vendors.

Comments

Post a Comment

Popular posts from this blog

40+ Construction Tools List with Images for Building Construction

Image
Construction tools list for building construction works such as concrete, brick masonry, leveling, wood works, floor works, slab works, brick laying, plastering etc. is provided. Every construction tool is necessary to achieve good results in the whole project. Along with these tools, the workers should also use some safety tools to prevent them from the unexpected accidents. Construction Tools List for Building Construction Some important construction tools and their uses are listed below: Bolster Boning rod Brick hammer Bump cutter/screed Chisel Circular saw Concrete mixer Cordless drill Crowbar Digging bar End frames Float Gloves Hand saw Helmet Hoe Iron pan Jack plane Ladder Line and pins Mason’s square Measuring box Measuring tape Measuring wheel Pick axe Plumb bob Plumb rule Polishers Putty knife Rammer Rubber Boots Safety glasses Safety helmet Sand screen machine Scratchers Sledge hammer Spade Spirit level Straight edge brushes Til
Read more

Building Materials properties and their Importance in Construction

Image
Building materials or construction materials are the major requirement in this modern age of technology. There are many types of building materials used for different construction works. Properties of Building Materials For a material to be considered as building material, it should have required engineering properties suitable for construction works. These properties of building materials are responsible for its quality and capacity and helps to decide applications of these material. Such properties of building materials are categorized as follows. Physical properties Mechanical properties Chemical properties Electrical properties Magnetic properties Thermal properties Physical Properties of Building Materials These are the properties required to estimate the quality and condition of the material without any external force. The physical properties of engineering materials are as follows. Bulk density Porosity Durability Density Density index Specific gravity
Read more

How to Prevent Errors During Setting Out Building Plan on Ground?

Image
Setting out building plan on ground is one of the most significant steps in building constructions and any errors at this stage would cause considerable problems, if it is not tackled immediately. Errors During Setting Out Building Plan on Ground There are different types of errors that might be made when a structure is set out for example gross errors, systematic errors and random errors. These errors should be prevented and there are some measures to tackle these issues. These measures will be discussed in the following sections. Fig.1: Setting Out of Building Plan on Ground Fig.2: Setting Out Building Plan on Ground How to Prevent Errors During Setting Out of Building? Following are the different types of control that should be carried out to prevent any errors during setting out building plan on ground: Good practice in office On site control Equipment and staff Checks Marking the ground Use of grid offset Good Practice in Office To successfully set
Read more

Factors Affecting Selection of Foundation for Buildings?

Image
Factors which affect selection of foundation for a building can be many from the soil conditions to the type of structure and loads from the building. All the factors are considered during selection of foundation for durable building construction. Factors Affecting Selection of Foundation Following are the factors which affect the selection of suitable foundations for building construction: Loads from building Type of soil Type of structures in neighborhood Type of foundations 1. Loads from Building The first factor considered is loads from building on the foundation. This load is a combination of dead load and imposed loads on the buildings. Other loads such as wind loads, earthquake loads, snow loads etc. are also considered based on location. The quantity of loads depends on the type of structure, number of floors and material of construction. As the number of floors increases, the dead load and imposed loads also increase. Choice of material for construction su
Read more

Ceiling types used in Building Construction and their Applications

Image
Various types of ceiling are used in building construction. Applications, aesthetics, advantages and disadvantages of these types of ceilings are discussed in this article. The ceiling of a building form one of the most important structural elements it terms of functionality as well as creativity which in turn bring good aesthetics to the building interior. This document would help you understand ceilings that in turn would help you understand the most suitable options while undertaking either repair or renovation work of our building interior. The ceiling gains a definition, ” A part of a building which encloses and is exposed overhead in a room, protected shaft or circulation space.” It helps us to create an enclosure and separation between spaces. They provide perfect lighting in the room by controlling diffusion of light. It also controls the sound around a room by making the room sound proof. It, therefore, stops the passage of sound between the rooms. Now ceiling also po
Read more

HOW TO DETERMINE DEPTH OF FOUNDATION

Image
Many factors affects the determination of depth of foundation. Calculation for foundation depth is done based on type of soil, ground water table, loads from structure, bearing capacity of soil and other factors. General factors to be considered for determining depth of foundation are: 1. Load applied from structure to the foundation 2. Bearing capacity of soil 3. Depth of water level below the ground surface 4. Types of soil and depth of layers in case of layered soil 5. Depth of adjacent foundation The minimum depth of foundation should be considered to ensure that the soil is having the required safe bearing capacity as assumed in the design. However, it is advised to carry out soil investigation before deciding on depth of foundation. Soil investigation report will suggest the foundation depth based on the type of structure, soil properties, depth of water table, and all other variable that should be considered. Soil investigation report provides bearing capacity of
Read more

WHAT IS VOLUME BATCHING OF CONCRETE AND HOW IT IS DONE IN FIELD?

Image
WHAT IS VOLUME BATCHING OF CONCRETE? Batching of concrete means measuring different ingredients of concrete (i.e. cement, sand, coarse aggregate and water) before mixing it. When this measurement is done on the basis of volume, we call it  Volume Batching . Below are mentioned some of important points to remember before adopting volume batching method in field. Volume batching is not a good method for measuring concrete materials. It is not applicable in case of reinforced concrete structure. This method of concrete batching may not be economical. It can be only used for unimportant concrete or for small concrete works. HOW VOLUME BATCHING IS DONE IN FIELD? Before batching concrete ingredients in terms of volume, we need to know two things. What is the relative proportion of concrete ingredients in terms of volume? What is the water-cement ratio? After knowing these two things you can proceed to batch concrete ingredients in field. The table shown below can be
Read more

Construction Project Management Softwares

Image
Construction PM Software A new wave of web and cloud apps are streamlining communication, simplifying document management, and improving efficiency in construction management.  Here are some of top construction management tools: Smartsheet Smartsheet  is a spreadsheet-inspired work management tool with robust collaboration and communication features. With pre-built construction templates, it’s easy to create a timeline, track progress, manage documents, and organize the details. Gantt charts are automatically created and auto-adjust every time a change is made, so you can share the most up-to-date timeline with team members or stakeholders. You can upload files from your computer, Google Drive, Box, Dropbox, Evernote, or add a web URL, creating a central repository for all project documentation and contracts. Team members can have discussions directly in the sheet and set reminders and alerts, so everyone is on the same page. And lastly, Smartsheet integrates with ot
Read more

Methods of underpinning, Procedure and Applications in Foundation Strengthening

Image
Underpinning is a method for repair and strengthening of building foundations. Underpinning methods, procedures and their applications in strengthening of different types of foundations is discussed in this article. There are situations where a failure in foundation or footing happens unexpectedly after the completion of whole structure (both sub and superstructure). Under such emergency situation, a remedial method has to be suggested to regain the structural stability. The  method of underpinning  help to strengthen the foundation of an existing building or any other infrastructure. These involve installation of permanent or temporary support to an already held foundation so that additional depth and bearing capacity is achieved. Selection of Underpinning Methods Underpinning methods are selected based on age of structure and types of works involved. Structure categories based on its age: Ancient Structures :Age greater than 150 years Recent Structures : Age between 5
Read more

Methods for Calculating Cost of Engineering Consultant Services

Image
here are several methods by which calculation of engineering consultant services cost can be carried out in construction. It is possible to employ various charging approach at different phase of the consultant services. The application of each method or combination of methods is dependent on nature, scope and complexity of the required engineering services. In this article, these charging consulting services are discussed. Following are the topics discussed for calculating cost of engineering services or consulting services in construction: What are the factors that affect the engineering service cost? Methods for charging engineering services What are the Factors that affect the Engineering Service Cost in Construction? There are various factors that control the cost of engineering services required for a specific project. These factors are outlined below: The conditions at project site. Degree of danger that may be encountered and exposure possibility. System of pr
Read more