COST > Module 3 > Flashcards

Module 3 Flashcards

(55 cards)

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1
Q

The management of project cost

A

Cost engineering

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2
Q

Cost engineering involves the ff:

A
  • estimating
  • cost control
  • cost forecasting
  • investment appraisal
  • risk analysis
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3
Q

What is the primary aim of cost engineering?

A

to achieve the ideal balance
between the price, quality and time obligations of a project

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4
Q

What are the phases in construction?

A
  • pre construction
  • construction phase
  • post construction
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5
Q

Content of pre construction

A
  1. Land acquisition
  2. Technical consultation
  3. Design process
  4. Budget and estimation
  5. Permits
  6. Hiring of contractor
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6
Q

Content of construction phase

A
  1. Site clearing and layout
  2. Excavation and foundation
  3. Framing and masonry
  4. Slab
  5. Roofing
  6. Finishing
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7
Q

Content of post construction

A
  1. Occupancy permit
  2. Project turnover
  3. Warranty
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8
Q

What are the reasons construction project fail?

A
  • poor estimating
  • scope creep
  • delays
  • confusing specifications
  • budgetary problems
  • communication failure
  • inadequate planning
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9
Q

It refers to the overall cost for the development of a facility or an asset?

A

Construction cost

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10
Q

It is a complex process since it involves variable factors.

A

Estimation of construction cost

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11
Q

Cost in construction can be of _________ costs or _________ costs.

A

Tangible and intangible

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12
Q

It is the cost that can be measured in monetary terms.

A

Tangible costs

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13
Q

Example of tangible costs.

A

Labor and material costs

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14
Q

_________ are the costs that are difficult to measure in monetary terms

A

Intangible costs

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15
Q

Example of intangible costs.

A

Service-related cost and goodwill

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16
Q

Project cost = __________ + _________ + __________+__________+___________

A

Direct cost
Indirect cost
Fixed cost
Variable cost
Sunk cost

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17
Q

What are the types of construction cost?

A
  • direct cost
  • indirect cost
  • fixed cost
  • variable cost
  • sunk cost
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18
Q

It is the cost incurred due to the work performed on the specific project.

A

Direct cost

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19
Q

Example of direct cost.

A

Wages
Bonuses
Material cost
Subcontractor cost

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20
Q

It is the cost of running the organization

A

Indirect cost

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21
Q

Example of indirect cost

A

Facilities
Water and electricity
Accounting
Security

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22
Q

It is the cost that does not change with the size of the project or its duration.

A

Fixed cost

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23
Q

Example of fixed cost

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A

Machinery setup cost
One time advertisement

24
Q

It is the cost which grows in direct relationship to the size and length of the project.

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A

Variable cost

25
Example of variable cost
Equipment rental Project based manpower
26
It is the cost which has already occurred and over which we no longer have any control.
Sunk cost
27
Example of sunk cost
Losses
28
anything that is required for the delivery of the project and that cannot be included in the direct costs. Generally, _________ costs are 8% to 10% of the contract value.
Overheads
29
Example pf overheads
• Salaries and benefits • Insurance policy – Group workmen policy, Contractors all risk (CAR) policy, equipment policy, provident fund, premium etc. • Financing cost – Interest, guarantees, warranties, bonds, penalties etc. • Progress photographs and videos • Conveyance cost – Cost for the transportation of labors to and from the site, senior engineers for their site inspection, employees transportation cost etc. • Travel and transfer cost • Temporary site installations and facilities like barracks, parking, site offices etc. • Utilities like electricity, water, drainage etc which are temporary for the site offices, barracks • Taxes and Duties • Miscellaneous expenses
30
is the backup money or future money that we keep aside. _________ are usually 2% to 5% for normal projects whereas it increases up to a maximum of 10% if the project is uncertain at the time of tender
Contingency
31
combination of general office overheads, risk and contingency
Markup
32
It is the determination of probable construction costs of any given project.
Building construction estimating
33
The purpose of ____________ is to describe the steps for developing size, effort, cost, schedule and critical resource estimates for a project throughout its life cycle.
Estimating process
34
Accuracy of Estimates
 Level of detail – i. e. the degree of decomposition of the Work Breakdown Structure.  Risk assessment results and the remediation plan.  Quality of requirements.  The point in the project lifecycle where the estimating took place.  The estimator’s experience.  The estimating method.
35
What are the three level of estimating accuracy
Ballpark estimates Preliminary estimates Accurate estimates
36
are made when little information about the project is available and there are no detailed requirements, except the initial project request.
Ballpark estimates
37
The accuracy range of the ballpark estimates has a range of
-25% to +75%
38
are used to establish the preliminary project budget and are often used to establish initial project funding
Preliminary estimates
39
The accuracy range of preliminary estimates never exceeds
-10% to +25%
40
Accurate or definitive estimates are prepared from a well-defined detailed data and WBS
Accurate estimates
41
The best accuracy that can ever be achieved has a range of
-5% to +10%
42
What are the type pf estimates?
Assembly estimating Square-foot estimates Parametric estimates Model estimating Project comparison estimates Detailed estimates
43
rather than bidding each of the individual components of the project, the estimator bids the components in groups known as assemblies.
Assembly estimating
44
It is useful for conceptual and preliminary estimates. By using broad assemblies, an estimate can be prepared quickly for an entire building
Assembly estimating
45
This are prepared by multiplying the square footage of a building by a cost per square foot and then adjusting the price to compensate for differences in the building heights, length of the building perimeter, and other building components.
Square-foot estimates
46
It is useful for preparing conceptual estimates based on assumptions of key building parameters or estimates based upon early designs.
Parametric estimates
47
the equations used in ___________ estimates are more complex and may use log functions, ratios of parameters, and multiplication of parameters
Parametric
48
It similar to assembly estimating, but it requires less input from the estimator.
Model estimating
49
It uses computer models to prepare an estimate based on a number of questions answered by the estimator
Model estimating
50
These are prepared by comparing the cost of a proposed project to a completed project.
Project comparison estimates
51
the estimator starts with the costs of a comparable project and then makes adjustments for differences in the project.
Project comparison estimates
52
Includes determination of the quantities and costs of everything that is required to complete the project.
Detailed estimates
53
It Includes Materials, Labor, Equipment, Insurance, Bonds, Overhead, and Profit
Detailed estimates
54
The contractor must have a complete set of contract documents. Each item of the project should be broken down into its parts and estimated
Detailed estimates
55
What are the common mistakes in estimation?
• Not conducting a site visit • Labor cost • Construction Materials Costs & Supplies • Making Uneducated Guesses • Failing to Assess Risks & Creating Contingencies • Not Reviewing Your Work • Not Reviewing Subcontractor Estimates
COST
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