Lect 3 : COST ESTIMATION

Prepared By : Dr Yasser Abdalshafy Gamal

Define the Estimate’s Purpose
Once the cost analysts know the context of the estimate and the
customer’s needs, they can determine the estimate’s scope by
its intended use and the availability of data. The maturity of the
program will influence the quantity of detail for the cost
estimate. For example, early in the life cycle the program may
have a concept with no solid definition of the work involved. A
cost estimate at this point in the life cycle will probably not
require extensive detail. As the program becomes better
defined, more detailed estimates should be prepared.
Define the Estimate’s Purpose
More detail, though, does not necessarily provide greater
accuracy. Pursuing too much detail too early may be detrimental
to an estimate’s quality. If a detailed technical description of the
system being analyzed is lacking information, analysts will find it
difficult to identify and estimate all of the cost elements. It may
be better to develop the estimate at a relatively higher work
breakdown structure (WBS) level,
INTRODUCTION The percentage of wastage of steel is
equal to 5 % due to the past performance
Nails and wires = 0.5 Kilo for 1 m3
SCAFOLDING The cost of scaffolding has been calculated for each square
You should the considering no of usage
 The cost of curing has been calculated for each square
SCAFOLDING
THE DETAILED ESTIMATED
 PROJECT COST ESTIMATES THROUGH
PROJECT LIFE CYCLE

Conceptual
cost estimate

Parametric
TYPES OF CONSTRUCTION COST ESTIMATES

Design Bid Control

Estimates Estimates Estimates

Analogous or
Bottom Up Progress
Parametric
Estimates Estimates
Estimates
 Design

Design Estimates
Estimates
 Design
Estimates
SLIDE DECK

The concept of design estimation refers to

the process of predicting or calculating the

s l i d e m o d e l . c o m
M
resources, time, and effort required to
complete a design project. Design
estimation is an essential part of project
planning and management as it helps in
setting realistic expectations, allocating
resources efficiently, and ensuring the
successful execution of the design project.
11
Business Proposal

DESIGN ESTIMATES
Note 1
Estimation techniques can vary depending on the
project and organization. Some common
approaches include expert judgment, analogous
estimation (based on similar past projects),
parametric estimation (using mathematical
models), and three-point estimation (considering
optimistic, pessimistic, and most likely scenarios).

Note 2
Remember that design estimation is not an exact
science and can be subject to uncertainties
 BID

BID ESTIMATES
ESTIMATES
 BID
ESTIMATES
SLIDE DECK

Bid estimation is a process of

M
calculating the cost and time

s l i d e m o d e l . c o m
required to complete a project in
order to submit a competitive
proposal or bid to a client or
customer.

14
Business Proposal

BID ESTIMATES
Note 1
It's important to note that bid estimation requires
careful analysis, attention to detail, and a
thorough understanding of the project and
industry. It is also crucial to regularly review and
update the bid estimation as new information
becomes available or as project requirements
change during the bidding process.
 BID

Control Estimates
ESTIMATES
 Control
Estimates
SLIDE DECK

A control estimate, also known as a

project control estimate or a baseline

s l i d e m o d e l . c o m
M
estimate, is an estimate that serves as a
reference point for comparing and
controlling project costs and schedule
during the execution phase. It is used to
monitor the actual progress of a project
and to assess whether the project is on
17 track or deviating from the original plan.
Business Proposal

CONTROL ESTIMATES
Note 1
The control estimate is typically prepared
after the bid or initial estimate, and it takes
into account any changes or refinements in
By regularly comparing actual
the project scope, requirements, and
project performance to the control
assumptions.
estimate, project managers can
identify potential issues early on
and take appropriate corrective
actions. This helps in maintaining
project control, managing risks, and
ensuring that the project stays
within budget and schedule
constraints.