WBS also provides the framework necessary for detailed costestimating, along with providing guidance for schedule development and control. Comparing actual costs using the same WBS organisation will help project controls to track any cost changes against the baseline WBS element. Cost breakdown structure (CBS) based on WBS should be adopted for the Projectcost estimates. CBS should match the level of work breakdown and the level of information available. Work breakdown level will depend on the type of estimate and the likely delivery method. For example, for a strategic, the Estimator might divide activities at the broadest work packages based on details available; whereas, for a detailed design estimate, most activities will be required to be at more detailed Level. Project managers and Estimators shall use their experience to create the CBS.
Alternative 2: Detailed Method
We now have a Class 3 estimate for the same project, again in 1Q92 dollars. According to our contracting plan, we will do the design in-house and will purchase the equipment, pipe spools, tagged instruments, and electrical switchgear. We plan to have the construction contractor furnish the other bulk materials (concrete, piping, pipe supports, field wiring, etc.) as part of the contract. Figure 312-3 shows the expenditures we expect to incur, by quarter. Using data that differs slightly from Section 301 (source unspecified), we expect cost escalation to the mid-points of expenditure for each category as shown in the figure. Note that the hourly cost of construction labor increases in July of each year. Here the total escalation is estimated to be $257,000.
Using the Mean
Given that the FM cost (which often covers several wells, as well as other elements of a project) is required to be stated at the mean, considerations of consistency and transparency are enough to justify setting each AFE at the same point of the cost distribution. But there is another important reason for using the mean. Since the mean is a probability weighted outcome, it would be expected that across the company, the total actual cost of a large number of wells (for example all those drilled in a year) would closely match the total predicted cost. The extent to which this is true gives us a powerful measure of our costestimating capability. Only by consistently setting AFEs at the mean cost can we make this comparison across our wells portfolio.
1.1.5 Unit Price Estimating
The entire project is divided into small discrete work items, and a “unit price” is established for each item. The unit price is then multiplied by the required quantity to find the cost for the work item. All costs are summed to obtain the total Estimated Construction Cost. For example, the cost to erect a masonry wall can be accurately determined by finding the number of bricks required and estimating all costs related to delivering, storing, staging, cutting, installing, and cleaning the brick, along with related units of accessories, such as, reinforcing ties, weep-holes, flashings, etc. Unit Pricing Estimating within the CSI MasterFormat™ is the most accurate means of ascertaining costs based on materials and labor content.
Allowance – Additional resources included in an estimate to cover the cost of known but undefined requirements for an activity or work item. Allowance is a base cost item. Base Cost Estimate – The term “base cost estimate” was developed by WSDOT for cost risk analysis and represents the reviewed and/or validated projectcost estimate to be used in the quantitative risk analysis for a project. The base cost represents the cost that can reasonably be expected if the project materializes as planned, including PE, RW, and CN costs. The base cost estimate is unbiased and neutral—it is not optimistic and it is not conservative. It does not include any risks, but does include the WSDOT standard construction contingency, since that amount is based upon historical usage. Base costs reported to program management shall be in current-year dollars (the un-inflated estimate). Refer to the Plans Preparation Manual 800.03(2).
The training needs to be comprehensive and cover all aspects of cost estimation including software, procedures, and reporting. The existing MDT cost estimation practices are quite advanced as compared to many other agencies and are comprised of written procedures (e.g., MDT Cost Estimation Procedures, Road Design Manual, software documentations), powerful programs (e.g., PPMS, OPX2, Trns*port), and tools (e.g., DMS, cost estimate spreadsheets). As mentioned previously, the degree of knowledge and use of these systems greatly varies between individuals in charge of day to day cost estimation and scheduling activities. STE recommends creating a training manual composed of materials from all the tools & software used by MDT costestimating staff. This manual should explain how each tool/software operates and how to use it. Typically, these documents will describe features of a program and the various steps required to operate it.
Finally, by summing up the price the direct construction cost is computed. This process is long and complex but the most complicated part of it is the quantity take off. Consequently, computers are considered to be effective tools in costestimating. due to their capability of doing complex calculation and storing huge amount of data for future use. Any decision concerning the construction of a project that has been or to be executed is based on one type of estimates, which are preliminary estimates, which their moderate level of accuracy owner, quantity survey and contractor consider them as the first choice estimates because they are inexpensive and fast to generate. Owner uses them to decide whether constructing a project is feasible and to evaluate contractors bids, while architect to design within owner’s budget and considering alternatives, and the contractor to know if bidding on a project is profitable or not. Consequently, in the proposed methodology the concentration is on preliminary construction cost estimates with the emphasis on a computer as an avail tool for estimators.
populated in its database, it is not ready for rollout to intended users yet. There will be an interim time where very current pricing data is gathered on all projects as a new regional policy. Once that data is available, it will be programmed into the model, together with the most current estimating guide data. Once the PMET is fully populated with current and consistent estimating data, it will be a very time- efficient and accurate tool. With less than 10 minutes of user entry, the PMET will immediately return conceptual parametric and budgetary assembly estimates. It will be programmed with PBS specific data and be highly effective for PBS small project estimates. It will never yield perfect results consistently, but it will always deliver reliable estimates within stated accuracy ranges.
Abstract— Additive manufacturing (AM) is quickly becoming a popular topic among Aerospace and Defense (A&D) companies as well as government agencies. Additive manufacturing differs from traditional manufacturing processes in that raw material is added or combined together to form the end product. Most existing processes remove raw material from a “slug,” leaving behind the end product. These existing processes are sometimes called subtractive manufacturing or traditional manufacturing. Additive manufacturing is not new, by any means. In fact, 3D printing (one form of additive manufacturing) has been around since the early 1980s. The past few years have shown us that the possibilities are virtually endless: from rapid prototyping, to printing food, to recreating human tissue and bones. This presentation will highlight the challenges of additive manufacturing and offer some guidance for the cost estimator. Additive manufacturing uses in Aerospace and Defense (A&D) have been previously restricted to rapid prototyping. Rapid prototyping allows engineers to determine design feasibility quickly, saving time and money. Shortened development cycles may result in getting the product to the user more quickly and for less money. Additive manufacturing could also mitigate some diminishing manufacturing source (DMS) issues. As sources shrink for obsolete weapon system components, end users could simply print a replacement component rather than rely on manufacturers to build small lots of spares or one-off components at prohibitively high cost.
The story is quite different if the early repayments come from a specific type of graduate. Now suppose the top 10% of earners repaid 20% of earnings above the repayment threshold. As discussed in Chapter 4, under our baseline model, this group on average still enjoys a loan subsidy because its members tend to pay interest rates below the government’s cost of borrowing when they are young. Early repayment allows these graduates to reduce their outstanding debt at a time when they are still being charged a real interest rate below 2.2%. These individuals would thus repay less, on average, under the scenario of early repayment than estimated in our baseline model. Table 5.3 shows that the average loan subsidy would increase slightly if the highest earners repay early, from £17,443 per student to £17,512. Across the top-earning 10% of graduates, the average loan subsidy would increase from £475 to £1,166, all of which would come from receiving a higher interest rate subsidy.
6th ed. New York: Van Nostrand Reinhold, 1995. 6th ed. New York: Van Nostrand Reinhold, 1995. R
R L L Pe Peur urifo ifoy, y, G G D D Ob Ober erlen len de der. r. Es Estim tim ati ati ng ng Co Cons nstr truc uctio tion n Co Cost sts. s. 4th 4th ed ed. . Ne New w Yo York rk: : McGraw-Hill, 1989.
increased validity to the findings of this thesis: For cost estimation, it is suggested to study all factors separately or as groups and develop the best model, the data collected are not sufficient to cover all government buildings, thus we have to collect more than and add them to the model to improve the error and the missing data must be collected. The model should be augmented to take into consideration the other different types of construction projects. For example: the medical, commercial and other administrative construction projects. The model should be applied to predict the duration, productivity, risk analysis, and claims in construction projects.
We find that the actual replacement rate is likely to vary considerably by retiree household, from under 54% to over 87%. We note that retiree expenditures do not, on average, increase each year by inflation or by some otherwise static percentage; the actual “spending curve” of a retiree household varies by total consumption and funding level. Specifically, households with lower levels of consumption and higher funding ratios tend to increase spending through the retirement period and households with higher levels of consumption but relatively lower funding ratios tend to decrease spending through the retirement period. When consumption and funding levels are combined and correctly modeled, the true cost of retirement is highly personalized based on each household’s unique facts and circum- stances, and is likely to be lower than amounts determined using more traditional models.
The ABC-types may be based on templates in MS Excel or Access as also used in dedicated environments. In general the ABC-type programs are very flexible in the type of manufacturing operations and complexity of products they can provide PCE for. The software operator can add machine types and assign investment levels as well as figures for the consumption of energy, consumables, required space and maintenance. The software automatically derives a tariff for use of the particular equipment per unit of time. The operator configures a calculation by selecting the type and amount of material used, the equipment to be used and then provides all the process parameters (such as cycle time, batch-volumes, set-up time, amount of operators, scrap level etc.) as input as well as levels of overhead associated with a particular type of manufacturer. This enables the costs to be modelled of virtually any (manufacturing) process and is as accurate as the input provided. In general, the ABC approach is known to be time-consuming and requires a significant level of expertise to use. The ACE-types that have so far focused on PCE for metals and plastics commonly use 3D CAD information as input. In these programs, the user has to select a small set of variables, namely material type, type of manufacturing operation and annual or batch volumes. Based on the settings and the information provided in the CAD file, ACE types derive an optimal manufacturing path and process times by emulation. Various approaches to ACE-type systems are available. Some ACE types can provide information on the cost of features (such as a particular radius) and so help to identify cost drivers and or suggest improvements to design engineers that reduce costs. The costing of electronics can be approached using ABC-type costing tools. Cost of Printed Circuit Boards (PCBs) is driven by the cost of components used. Commonly list prices are used for such components, which require up- to-date references (price erosion, obsolescence) and depend heavily on purchasing volumes.
There have been attempts to account for extra-risks in the CAPM that relate to company-specific risk factors. Grabowski (2008) argues for company-specific risk adjustments based on the fact that typically investors do not hold diversified portfolios as assumed by CAPM and seek for advice on portfolio diversification. This would be a good argument if diversification proved either extremely costly or unobtainable as in the case of country risk premium. However, large institutional investors have been long diversified, while index funds have made diversification more feasible than ever before even for the smaller investors. Thus, we believe that adding company-specific risk premium looks more like a desire to tweak CAPM just to match required returns of undiversified investors than to correct for a failure in the general CAPM framework. As Brealey, Meyers and Allen explain, company specific risk factors should be instead incorporated in the cashflow forecast. In our opinion, this would not only fit the general CAPM framework better, but also assure that company specific risks are not double-counted. For instance, valuing firms in distress, an analyst should calculate expected values of future cashflows that incorporate upside and downside scenarios, such as bankruptcy, rather than attaching additional idiosyncratic risk premiums and then extrapolating historical cashflows. On the other hand, the systematic risk arising in distressed environment would then be captured by equity 51 as well as positive debt betas in the calculations of cost of capital.
simultaneously started on requesting prices (purchase orders) from sub-contractors and suppliers, especially for main cost items. In this case study, this concluded foundation (piles), columns, floors, staircases, etc. A purchaser, responsible for the purchasing of materials and subcontractors, had the task to acquire these prices, which took up 3-7 days. The estimator requested these prices as soon as possible (after quantity takeoff). Later on, the estimator compared the costs in the first estimate to the requested prices. This was a very important part of estimating because this offered two benefits. In the first place, the estimator was able to check whether the used company records in the first ‘basic’ estimate were correct. Second, the estimator was able to find the cheapest sub-contractors and suppliers to decrease overall projectcost, which improved the chance to win the tender for the job, or improve project profitability.
easy comparison of Return Data.
The Global CoA is a compre- hensive set of standardised codes that defines the content of each account code and is methodically structured to facilitate finding, sorting, com- piling, summarising, defining and otherwise managing infor- mation the code is linked to. The information is used to support total management practices such as cost esti- mating, cost accounting, cost reporting, cost control, plan- ning, scheduling and bench- marking.
cost database can effectively assist in analogous, parametric and detailed cost estima- tion, making the process less costly and yielding more accurate outputs.
Expert opinion is a subjective estimate of low accuracy, which is useful in the absence of data and for some preliminary estimate purposes. The learning curve concept origi- nated from aircraft construction industry in the 1930s and is based on the assumption that organizations and individuals learn to carry out activities more efficiently as a result of repetition (GAO, 2009; Stewart and Wyskida, 1987; Wright, 1936). DTC, as was de- scribed in Chapter 4.2, is a product development technique, which is sometimes dis- cussed in the cost estimation context, as in its essence, the idea of DTC is to guide the product design and planning towards the set target cost. The target cost may be deter- mined through market and competitor analysis, which lets the firm set a competitive cost objective relative to the market. The target cost serves as a final estimate, from which the cost of activities and work packages is determined, which is a characteristic of a top- down estimating approach. Assembly estimation is used in construction projects and is a technique where the cost estimate is computed based on the bid for a work module or an assembly that consists of the material and labor costs (Dagostino and Peterson, 2011).
As defined by BPA, a completion report is the documentation submitted at the conclusion of an approved custom project that provides information on project costs, verified energy savings, and any additional information as required per the project’s M&V plan. An accepted completion report is required for an incentive payment or claim of energy savings. This section includes frequently asked questions on completion report projectcost requirements from the end-user’s standpoint.