It is a process where project managers predict the amount of money they need to fund their projects.
Cost estimation
Importance of Cost Estimation
- Budgeting and Financial Planning
- Project Planning and Control
- Risk Management
- Decision-Making
- Stakeholder Communication
Types of Estimates
- Preliminary
- Intermediate
- Final
These are employed in the early planning phases of a proposed project to match an owner’s needs with budget constraints in order to establish its overall scope (size) and quality expectations.
Preliminary
These are employed at various stages of project design development to maintain accountability for initial budget projections and as a means of evaluating competing alternative construction assemblies, systems, and materials.
Intermediate
The estimate should be organized in the same WBS as required of the bidders, which typically is CSI Master Format. This then allows for a comparison of the final estimate with the bids received and can aid in negotiating with the lowest bidder.
Final
Cost Estimating Methods
- Project Comparison Estimating or
Parametric Cost Estimating - Square Foot and Cubic Foot Estimates
- Assembly and Systems Estimates
They contribute to the overall success and sustainability of projects by providing a detailed and reliable financial framework.
Cost Estimating Methods
uses historical data to calculate the costs associated with different components of a project.
Parametric Estimating Method
3 Key Steps in Parametric Estimating Method
- Identify the number of project units, such as square footage.
- Identify the cost of each unit.
- Multiply the total number of units by the cost of one unit.
“preliminary” or “ballpark” estimate, less than 15-25% accuracy
PROJECT COMPARISON ESTIMATING OR PARAMETRIC COST ESTIMATING
used when little information in known about the program
PROJECT COMPARISON ESTIMATING OR PARAMETRIC COST ESTIMATING
requires approximate gross area of proposed work
PROJECT COMPARISON ESTIMATING OR PARAMETRIC COST ESTIMATING
the greater the number of prior project combinations, the easier
PROJECT COMPARISON ESTIMATING OR PARAMETRIC COST ESTIMATING
are common
methods used in cost estimation, particularly in
construction and real estate.
SQUARE FOOT AND CUBIC FOOT ESTIMATES
several historical databases available that are adjusted annually and many firms maintain their own databases
SQUARE FOOT AND CUBIC FOOT ESTIMATES
make adjustments and additions based on market
SQUARE FOOT AND CUBIC FOOT ESTIMATES
for preliminary and intermediate budgets based on historical data
SQUARE FOOT AND CUBIC FOOT ESTIMATES
Involves calculating costs based on the area of a space.
Square Foot Estimates
It is commonly used for estimating costs related to flooring, painting, roofing, and other surface-based elements.
Square Foot Estimates
In calculations, costs are identified by multiplying the area of space (in square feet) by a unit cost rate.
Square Foot Estimates
This method involves calculating costs based on the volume of a space.
Cubic Foot Estimates
It is used for estimating costs related to volumetric elements such as insulation, concrete, or excavation.
Cubic Foot Estimates
In calculating, costs are determined by multiplying the volume of the space (in cubic feet) by a unit cost rate.
Cubic Foot Estimates
