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TYPE OF COST MODEL

1.

Traditional model
a) Functional unit

Definition
 Functional unit method
estimating consists of choosing
a standard unit of
accommodation and
multiplying an approximate
cost per unit
 Estimate = Standard units of
accommodation x cost/unit

Advantages
Disadvantages
 More accurate than  Not useful for “onesimple superficial
off ” projects
method
 Useful only for
 No published cost
client body involved
data
in continuous and
consistent program
of similar projects

 For example:
i. Schools, universities, colleges
- cost per student
ii. Hotels, hospitals - cost per bed
iii. Roads - costs per Kilometers
iv. Car parks - cost per car
 The tehnique is based on the
fact that there is usually some
close relationship between the
cost of a construction project
and the number of functional
units it accommodates.
 Functional units are those
factors which express the
intended use of the building
better than any other
b) Superficial unit
Definition
 In Superficial unit method
estimating, the area of each
floors is measured and then
multiplied by the cost per
square metre.
 In order to provide
comparability between various

Advantages
Disadvantages

Unit is meaningful  Difficult to allow for
to all parties
effects of design

Most cost data is
decisions such as
plan shape, storey
published in $/m2

height quality, etc
Estimates
are

Separate allowance
quickly and easily
must be made for
prepared
site
works
and

height.  Storey heights. storey current criticism to the floor and the overall area method that does not take height of the into account possible variations building of the storey height  Unrelated work to the volume has to be  Estimate = Volume x Unit Cost calculated separately (Cost/m3)  Estimate = External plan area x height x cost (Cost/m3) d) Storey Enclosure Definition  Storey enclosure unit measure the area of external walls. storey height.schemes. the floor areas are calculated from the internal dimensions of the building. external services  It is largely a post-1945 method. and became appropriate for projects such as schools and housing where storey height are similar. floors and roof areas (effectively enclosing the building) and multiplying them by an appropriate weighting factor Advantages  Provides a single rate  Take into account of difference in plan shape total floor area. vertical position of the floors. overall height. extra costs of providing usable floor areas below Disadvantages  Not much used in practice and involves greater calculation  Historical data are not readily available . c) Cube Definition Advantages Disadvantages  The Cube method estimating is  The estimate can be  Does not take into specific for building projects prepared quickly account changes to and aims to overcome the plan. plan shape and methods of construction are particularly important when deciding on the rate to be used.

etc. the building is divide into elements such as foundations. . both drawing and specification notes f) Elemental Cost Analysis Definition  In Elemental method of estimating. floor finishes. structural frame. Each element is sub divided into components.  A rate is calculated for the component by breaking the component up into its individual items to be priced per measurable unit of the component.  For example: A slab can be broken up into concrete.ground e) Approximate Quantity Definition  Approximate quantity method estimating is to estimate the cost to the employer of their desired scheme  It usual to base the pricing of such estimates on historical cost data gleaned from the analysis of the costs of similar buildings adjusted to account for any fluctuations in price levels and for project idiosyncrasies Advantages  Most accurate method  Simple. internal divisions. adaptable method. C and D  Easily understood by all parties  Facilitates comparison between projects  Facilitates analysis of cost implications of design decisions Disadvantages  Time-consuming  High level of expertise required  The accuracy of the estimate will be influenced by the state of the design information. reliable and accurate method  Can clearly reflect adjustments of quantity and/or quality  Cost data readily available Disadvantages  Time-consuming  Applicable only to building work  Applicable only in later stages of cost planning Advantages  Flexible. suited to Stages B. external envelope.

 The quantities may be measured in number. length.  Preparing a bill of quantities requires that the design is complete and a specification has been prepared.Sketch Design and Stage D .reinforcement. .  Provide an open basis for the contract.  Provide a very strong basis for financial administration of the contract.Outline Proposal ii. the client provides an extensive and clear statement of the work he/she requires and the contractor states the price at which he/she is prepared to undertake the job. area. volume. Element groups used in Stage B . Individual elements used in Stage C . weight or time. 2) Non-traditional Model a) Statistical/Econometric Model Advantages Disadvantages  Provide a consistent  Time-consuming basis for competitive bids so that the contractor who is the most efficient and the least expensive in providing the items of works is likely to be commissioned for the job. and power floating. formwork.  Format of element codes:i.Tender Document g) Bill of Quantities Definition  The bill of quantities is a document prepared by the cost consultant (often a quantity surveyor) that provides project specific measured quantities of the items of work identified by the drawings & specifications in the tender documentation.

. calibrations and optimizations Disadvantages  Outputs of regression can lie outside of the range [0. when the focus is on the relationship between a dependent variable and one or more independent variables Advantages  The estimates of the unknown parameters obtained from linear least squares regression are the optimal  Estimates from a board class of possible parameter estimates under the usual assumptions are used for process modeling  It uses data very efficiently. Analyze costs within a relevant range.causal model Definition  Estimating approach based on the assumption that future value of variable is a .regression analysis Definition  In statistical modeling. regression analysis is a statistical process for estimating the relationships among variables  It includes many techniques for modeling and analyzing several variables. Good results can be obtained with relatively small data sets  The theory associated with linear regression is well-understood and allows for construction of different types of easily-interpretable statistical intervals for predictions.1]  It has limitations in the shapes that linear models can assume over long ranges  The extrapolation properties will be possibly poor  It is very sensitive to outliers  It often gives optimal estimates of the unknown parameters Advantages  Reliance on historical data is relatively Disadvantages  Reliance on historical data may be the only readily . which is the limits within which a cost estimate may be valid.  Relevant range for a projection is usually between the upper and lower limits (bounds) of past activity levels for which data is available.

it inclusion of realcomputes an equation world Disadvantages  Often requires long. real-world situations  Used only where the problem  Does not interfere has a chance (random) with real world component. compression  Enables the  In the simulation process. expensive development process  Does not generate optimal solutions. expressed as mathematical or logical relations between the objects of interest in the system -Monte Carlo simulation Definition  Computation intensive forecasting technique applied where statistical analysis is extremely cumbersome due to the complexity of a problem (such as queuing or waiting line probabilities. complex. and is subject to system unpredictable influences. it  Enables study of simulates (models) a situation interactions on the basis of current and past  Enables time (historical) data.mathematical function of the values of other variable(s)  Used where sufficient historical data is available. or inventories involving millions of items). Advantages  Straightforward and flexible  Computer software make simulation models easy to develop  Enables analysis of large. cost Computational tools effective basis for estimating costs allow for more data  Analysts must be to be used than for non-statistical alert to cost-activity methods changes  Also called causal forecasting model b) Risk/Simulation Model  A simulation model take the form of a set of assumptions about the operation of the system. and the relationship (correlation) between the dependent variable to be forecasted and associated independent variable(s) is well known inexpensive available. it is a trial-and-error approach  Requires managers to generate all conditions and constraints of realworld problem .

establishing better communication and preventing conflicts between key stakeholder  Improve value by identifying the most Disadvantages  Need to spend time and money to carry out the value management study  It is hard for the value manager to choose a good team with the right participants and appropriate skills mix as well as creating a suitable environment for them  In Value Management study. each time injecting random numbers to come up with a range of possibilities or outcomes of possible actions. many professionals have to leave their workplace for a couple of days in order to execute the workshop and usually this costs the client a lot of money and time  The confused and .(mathematical model) thousands or millions of times. key stakeholders. complications  Larger the number of computations. and the end user to discover and achieve their needs and wants through the workshop and create a balance between their priorities for the project  Enhances value by clarifying objectives and requirements. the greater the probability (according to the law of large numbers) of approximating the future events-provided the maximum amount of known-data is incorporated into the model -Value Management Definition Advantages  Application of value analysis  Delivers value for (value engineering) techniques money to the for improvement of business organisation when effectiveness and efficiency applied correctly and methodically  Enables the client.

in a sense .based on that input and output -Neuro-Fuzzy Advantages  A neural network can perform tasks that a linear program cannot  When an element of neural network fails. it can continue without any problem by their parallel nature  A neural network learns and does not need to be reprogrammed  It can be implemented in any application  It can implemented without any problem Disadvantages  The neural network needs training to operate  The architecture of a neural network is different from the architecture of microprocessors therefore needs to be emulated  Requires high processing time for large neural networks .or learns. -Artificial neural networks Definition  An artificial neural network (ANN) is a computational model based on the structure and functions of biological neural networks  Information that flows through the network affects the structure of the ANN because a neural network changes .appropriate way for satisfying the stakeholders needs and wants inconsistent use of Value Management terminology and the lack of standard definition are considered as weaknesses as well as barriers to its widespread application 3) New Wave Model a) Artificial Intelligent System  Artificial Intelligence is the branch of computer science concerned with making computers behave like humans.

Definition  In the field of artificial intelligence. neuro-fuzzy refers to combinations of artificial neural networks and fuzzy logic Advantages  The chances of error are almost nil and greater and accuracy is achieved  Utilized in carrying out repetitive and time-consuming task efficiently  Enable to store enormous amounts of data Disadvantages  Cost incurred in the maintenance and repair .