Project Estimation Tools
Project Estimation Tools are needed in a construction project management and construction cost estimating process. These tools will help us to make it easier to estimate the cost for construction. Project Estimation Tools can help us to finish anything related to construction cost estimating properly.
Working in the Project Estimation Tools, you have to be careful to consider anything related to the construction. If you miss something, you will suffer in the future. Project Estimation Tools and techniques will guide us to do the estimating.
There are several Project Estimation Tools and Techniques as explained by PM Study Circle, they are :
- Analogous Estimating
This technique is used to estimate the project cost when very little detail about the project is available. Therefore, this technique does not provide a very reliable estimation. The primary benefits of this technique are: it is very fast, less costly, and provides a quick result.
In Analogous Estimation, the cost of the project is guessed by comparing it with any similar project previously completed by your organization. Here you will look into your organization’s historical records (i.e. in Organizational Process Assets) for previously completed projects. You will select the project which is closest to your project. Once you get it, by using your expert judgment you will determine the cost estimate of your current project.
The Analogous Estimating is also known as The Top-Down Estimating.
2. Parametric Estimating
This technique also uses historical information to calculate the cost estimates. However, there is a difference between this technique and the analogous estimation technique.
Parametric Estimation technique uses historical information along with statistical data. It takes variables from the similar project and applies them to the current project. For example, in the previous project, you will see that what the cost of concreting per cubic meter was. Then you will calculate the concrete requirement for your project and multiply it with the cost obtained from the previous project to get the total cost of concreting for your current project. In the same way you can calculate the cost of other parameters (men, materials, and equipment) as well.
The accuracy of this process is better than the analogous estimation.
3. Three-Point Estimating
This technique is used to reduce the biases and uncertainties in estimating assumptions. Instead of finding one estimate, three estimates are determined and then their average is taken to reduce the uncertainties, risks, and biases.
PERT (Program Evaluation And Review Technique) is the most commonly used method in three point estimation technique.
Three PEART estimates are as follows:
- Most Likely Cost (Cm): This cost estimate considers everything goes as normal.
- Pessimistic Cost (Cp): This considers the worst case and it assumes that almost everything goes wrong.
- Optimistic Cost (Co): This estimate considers the best case and assumes that everything goes better than planned.
PERT Estimate formula is:
Ce = (Co + 4Cm + Cp)/6
Where, Ce = Expected Cost
Estimates derived from this technique are better than the two techniques discussed above and provide a more accurate estimate.
4. Bottom-up Estimating
The Bottom-Up Estimating technique is also known as the “definitive technique”. This estimation technique is the most accurate, time-consuming, and costly technique to estimate the cost. In this technique, the cost of each single activity is determined with the greatest level of detail at the bottom level and then rolls up to calculate the total project cost.
In other words:
Here, the total project work is broken down into the smallest work components. Its cost is estimated and then finally, it is aggregated to get the cost estimate of the project.
Project Estimation Tools Summary
- It is the fastest technique to estimate cost but less accurate.
- This technique can be used with limited information available about the project.
- This technique uses the statistical relationship between historical data and variables; e.g. cost of painting of wall per square foot.
- It is more accurate than the analogous estimation.
- This technique uses three estimates to calculate the average estimate. The three estimates are the most likely cost, the pessimistic cost and the optimistic cost.
- It reduces the biases, risks, and uncertainties from the estimation.
- It is more accurate than the Analogous and Parametric estimating techniques.
- This technique is the most accurate technique of all the techniques discussed above.
- This technique can only be used when every detail about the project is available.
- This is very time-consuming and costly technique, but gives reliable and most accurate result.
Those 4 Project Estimation Tools and Techniques are commonly used tools and techniques by Construction Cost Estimator. If you are about to do construction cost estimating, you can study and do those Project Estimation Tools and Techniques. We hope that this article is useful for you. Please subscribe for more articles related to Project Estimation Tools.
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