The document discusses estimating costs for construction projects in fragile and transitional contexts using the three-point estimating technique. It explains that the technique uses optimistic, most likely, and pessimistic estimates to define a cost range and improve accuracy. As an example, the document applies the technique to estimate costs for a basic education project in Sudan. It calculates optimistic, most likely, and pessimistic cost scenarios accounting for risks like instability and variables like inflation. The final cost estimate of $157,192 is close to the most likely amount, demonstrating how the simple three-point technique can reliably estimate costs while considering the uncertainties of fragile contexts.
Building construction estimating involves determining the probable costs of a project based on the drawings and specifications. It requires visualizing all aspects of the construction from the initial plans and accounting for various direct and indirect costs. Estimators must thoroughly understand the scope of work and account for all materials, labor, equipment, and costs. The level of estimate accuracy depends on the information available, with more detailed estimates requiring complete drawings and specifications.
These five types of construction contracts are widely used across the world. Get to about the lump-sum contract, unit-rate contract, cost-plus contract, time & material contract, and target cost contract. All the contract types are explained with their respective example, pros and cons.
This document discusses the pros and cons of planning for projects. It acknowledges that the future is unpredictable and estimating is difficult, but argues that planning is still necessary to understand scope, manage complexity and resources, track progress, and adapt to changes. Without planning, projects risk failing due to unclear scope, insufficient resources, lack of baselines, and an inability to course correct. While agile approaches embrace change, they still require planning through timeboxing and prioritizing features. Modern technology may change how planning is done, but the core principles of understanding requirements and managing uncertainty through analysis and review will still apply. The document concludes that cognitive biases can undermine planning rather than a lack of knowledge, and that planning will remain crucial as projects
When contractually required, DOD acquisition contractors are obligated to submit IPMR's electronically IAW DID 81861. This data is necessary but not sufficient for successfully managing a program. This presentation is the overview of the Essential Views needed for that success
This document provides an overview of programmatic risk management. It discusses:
1. The importance of managing risk to cost, schedule, and technical performance for project success.
2. How single point estimates are not sufficient and statistical estimates are needed to build a credible cost and schedule model given the uncertainty inherent in projects.
3. The key aspects of risk management including identifying risk, analyzing risk probability and impact, and communicating risk as an ongoing process for decision making.
This document presents a case study evaluating an integrated schedule and cost risk analysis method using Monte Carlo simulation for a construction project in Vietnam. The study found the method to be effective compared to traditional approaches by identifying more risks and their impacts. It provides step-by-step guidelines for implementation. The analysis of a sample project found very low probabilities of completing on schedule and within budget. Simulated risk mitigation scenarios allowed analysis of strategies to improve outcomes. While effective, the author notes limitations and recommendations for refining and testing the approach in additional projects.
Managing the Construction Claims EffectivelySHAZEBALIKHAN1
The article aims to explain the types of construction claims and their respective root causes. In the end, the best practices to minimise the claim are explained. A case study on time and cost overrun will detail out what claims arises due to delay.
The document provides information about estimating project costs, including:
1. It discusses key principles of project cost estimating such as integrity, using the best information, accounting for risks and uncertainties, using an expert estimating team, and validating estimates.
2. It describes types of project costs as variable vs fixed costs and direct vs indirect costs. It also discusses opportunity costs.
3. It explains that cost estimates show the monetary and time resources needed to complete a project, and outlines the typical components of a cost estimate spreadsheet.
4. It outlines the key steps in a project cost estimation process, including breaking work into tasks, evaluating tasks, and estimating resources needed based on task complexity and size. It provides an
Building construction estimating involves determining the probable costs of a project based on the drawings and specifications. It requires visualizing all aspects of the construction from the initial plans and accounting for various direct and indirect costs. Estimators must thoroughly understand the scope of work and account for all materials, labor, equipment, and costs. The level of estimate accuracy depends on the information available, with more detailed estimates requiring complete drawings and specifications.
These five types of construction contracts are widely used across the world. Get to about the lump-sum contract, unit-rate contract, cost-plus contract, time & material contract, and target cost contract. All the contract types are explained with their respective example, pros and cons.
This document discusses the pros and cons of planning for projects. It acknowledges that the future is unpredictable and estimating is difficult, but argues that planning is still necessary to understand scope, manage complexity and resources, track progress, and adapt to changes. Without planning, projects risk failing due to unclear scope, insufficient resources, lack of baselines, and an inability to course correct. While agile approaches embrace change, they still require planning through timeboxing and prioritizing features. Modern technology may change how planning is done, but the core principles of understanding requirements and managing uncertainty through analysis and review will still apply. The document concludes that cognitive biases can undermine planning rather than a lack of knowledge, and that planning will remain crucial as projects
When contractually required, DOD acquisition contractors are obligated to submit IPMR's electronically IAW DID 81861. This data is necessary but not sufficient for successfully managing a program. This presentation is the overview of the Essential Views needed for that success
This document provides an overview of programmatic risk management. It discusses:
1. The importance of managing risk to cost, schedule, and technical performance for project success.
2. How single point estimates are not sufficient and statistical estimates are needed to build a credible cost and schedule model given the uncertainty inherent in projects.
3. The key aspects of risk management including identifying risk, analyzing risk probability and impact, and communicating risk as an ongoing process for decision making.
This document presents a case study evaluating an integrated schedule and cost risk analysis method using Monte Carlo simulation for a construction project in Vietnam. The study found the method to be effective compared to traditional approaches by identifying more risks and their impacts. It provides step-by-step guidelines for implementation. The analysis of a sample project found very low probabilities of completing on schedule and within budget. Simulated risk mitigation scenarios allowed analysis of strategies to improve outcomes. While effective, the author notes limitations and recommendations for refining and testing the approach in additional projects.
Managing the Construction Claims EffectivelySHAZEBALIKHAN1
The article aims to explain the types of construction claims and their respective root causes. In the end, the best practices to minimise the claim are explained. A case study on time and cost overrun will detail out what claims arises due to delay.
The document provides information about estimating project costs, including:
1. It discusses key principles of project cost estimating such as integrity, using the best information, accounting for risks and uncertainties, using an expert estimating team, and validating estimates.
2. It describes types of project costs as variable vs fixed costs and direct vs indirect costs. It also discusses opportunity costs.
3. It explains that cost estimates show the monetary and time resources needed to complete a project, and outlines the typical components of a cost estimate spreadsheet.
4. It outlines the key steps in a project cost estimation process, including breaking work into tasks, evaluating tasks, and estimating resources needed based on task complexity and size. It provides an
This document outlines the risk management process for a case study project. It includes:
1. The risk management process with 6 steps: plan, identify, analyze qualitatively, analyze quantitatively, plan responses, and control risks.
2. A risk register containing 16 identified risks for the project with details like probability, impact, risk response strategies.
3. An update to the risk register after 29 months with one risk removed.
The document provides an overview of the risk management process applied to a case study project and the resulting risk register and monitoring.
This document provides an introduction to programmatic risk management. It discusses key concepts like defining a strategy beyond hope, integrating cost, schedule and technical performance, using statistical models for risk, and communicating risk. It emphasizes that single point estimates are insufficient and that risk management requires understanding uncertainty and using techniques like Monte Carlo simulation to develop probabilistic schedules and assess completion confidence intervals. Managing programmatic risk is essential for project success.
In a perfect scenario, the need for either owner or contractor driven claims arguably wouldn't arise. However, in reality, this is rarely the case. This paper introduces a technique that helps with determining root cause of project delays resulting in claims.
The CPM (Critical Path Method) model is a deterministic approach used for project planning and scheduling. It involves identifying all tasks, determining their duration and sequence, and analyzing which path has no float or slack time between tasks. This critical path determines the minimum time needed to complete the project. The CPM makes assumptions that the critical path will not change, activity times are independent and known, and the project completion time is normally distributed. The key steps of CPM include specifying activities, establishing sequences, building a network diagram, estimating activity times, identifying the critical path, and updating the critical path diagram. The overall goal of CPM is to complete the project in the shortest time possible through techniques like fast tracking and crashing the critical
This document discusses cost and schedule overruns that are common in publicly-funded programs. It proposes establishing cost and schedule estimates based on the historical variability of similar past programs, and updating estimates periodically with risks, to increase the probability of on-target program delivery. Specific changes are recommended to how initial estimates are created and agreed upon, including developing activity-based estimates adjusted for issues on past programs. Programs should be budgeted at a 70% probability of meeting cost and schedule targets using this joint confidence level approach. This involves changes to estimating, acquisition, and contracting processes.
Towards Innovate Methods of Construction Cost Management and Controlcivej
Project cost is one of the three main challenges for the construction manager, where the success of a
project is judged by meeting the criteria of cost with budget, schedule on time, and quality as specified by
the owner. Many projects experience extensive delays and thereby exceed initial time and cost estimate.
Available information, good estimating practice and experienced personnel are some of the factors found
to have considerable impact on estimation accuracy. The successful execution of construction projects and
keeping them within estimated cost and prescribed schedules depend on a methodology that requires sound
engineering judgment. So the research aim is to conduct research study and process of exploring the
existing model related to above three types of estimate and their contribution to civil engineering cost
management and control especially getting motivated with the verification and validation component of
CRASP methodology. The objective of this paper or scope of this research in this paper is to conduct
literature study and review towards exploring innovative techniques such as Artificial Intelligence
Techniques or Expert System Techniques available and applicable to make decision making or decision
support regarding construction cost management and control at three levels: (i) before the actual civil
engineering project design begins (ii) after detailed design but before execution and (iii) during project
execution
A CCP is an experienced practitioner with advanced knowledge and technical expertise to apply the broad principles and best practices of Total Cost Management (TCM) in the planning, execution and management of any organizational project or program. CCPs also demonstrate the ability to research and communicate aspects of TCM principles and practices to all levels of project or program stakeholders, both internally and externally.
1. The document discusses cost estimation and management of construction projects. It outlines various factors that must be considered like project planning, scheduling, progress monitoring, time and cost estimation, cost management, change order management, and mitigating cost overruns.
2. Effective cost estimation requires considering construction methodology, resources, duration and feasibility. Time and cost have a strong relationship, as delays increase costs.
3. Cost management ensures a project is completed within budget through accurate budget preparation, crew sequencing, and cost optimization in scheduling. Change order management handles changes fairly.
All About Construction Labour Planning- Excel TemplateSHAZEBALIKHAN1
This document provides an overview of construction labor planning. It discusses the need for labor planning to reduce costs, ensure quality work, and meet schedules. The key steps in labor planning are collecting inputs, assessing manpower requirements, sorting work by category, plotting man-days on a timeline, leveling requirements, and creating a mobilization plan. Productivity is measured by work output per man-day. An Excel template can help calculate labor needs. Attrition rates should also be considered to account for worker turnover. Costs include wages as well as expenses like housing, food, and transportation.
The document describes the process of effects based operations (EBO) in 11 steps: 1) define future scenarios, 2) identify drivers and conditions, 3) analyze driver/condition relationships, 4) develop scenarios, 5) define end states, 6) create effects, 7) identify means, 8) determine capabilities, 9) assess resources, 10) generate reports, 11) rate effect-means pairs. The goal is to identify actions that can achieve a desired strategic outcome through military and non-military means by considering direct, indirect and cascading effects.
International Journal of Engineering Research and DevelopmentIJERD Editor
Electrical, Electronics and Computer Engineering,
Information Engineering and Technology,
Mechanical, Industrial and Manufacturing Engineering,
Automation and Mechatronics Engineering,
Material and Chemical Engineering,
Civil and Architecture Engineering,
Biotechnology and Bio Engineering,
Environmental Engineering,
Petroleum and Mining Engineering,
Marine and Agriculture engineering,
Aerospace Engineering.
This document discusses stochastic project scheduling using the Program Evaluation and Review Technique (PERT) method. PERT introduces uncertainty into activity duration estimates by using three time estimates per activity - optimistic, most likely, and pessimistic. It then calculates the expected mean duration, variance, and distribution for each activity. The critical path is determined using expected mean durations. The overall project duration is calculated as the sum of expected critical path activity durations, and the project variance is the sum of individual critical path activity variances. This allows calculating the probability of completing the project by a certain date using the normal distribution.
This document discusses risk management, cost control, and communication in construction projects. It describes how risk management involves identifying, assessing, and treating risks through various models and communication is key. It also explains that cost control is important for meeting project goals and involves establishing budgets, monitoring costs, and controlling changes. Effective risk management, cost control, and communication are important for construction project success.
This document discusses key concepts for effective risk management on projects. It outlines 5 concepts: 1) hoping is not a strategy, plans with goals and metrics are needed, 2) single point estimates are inaccurate, probabilistic estimates using distributions like triangles are better, 3) integrating cost, schedule, and technical performance is essential, 4) a formal risk management process and model is required, and 5) risk communication is critical. It emphasizes that identifying risks is not enough, plans for mitigating risks must be developed and risks must be retired over time according to the plan.
This document provides an overview of how to conduct an event study in finance. It discusses why event studies are commonly used, how to define the event window and calculate abnormal returns, how to test hypotheses about the impact of events using standardized abnormal returns and cumulative abnormal returns, and how to average returns across firms and time periods. It also covers potential issues like cross-sectional dependence between firms' returns and changing return variances over the event window.
Evaluation of Risk Factors Affecting Cost Performance of Construction Project...IJCMESJOURNAL
Effective management of risk is critical to the success of any construction project. The importance of risk management has grown as projects have become more complex. Contractors have traditionally used financial mark-ups to cover the risk associated with construction projects, but as competition increases and the margins become tighter, they can no longer rely on this strategy and must improve their ability to manage risk. This study has carried out an empirical evaluation of the effect of risk factors on cost performance of projects at delivery. The study is based on the analysis of primary data derived from bills of quantities for the construction/erection of hospital projects by the Ministry of Works and Housing, Jalingo in Taraba State. The obtained data was analyzed using linear regression, t-statistics, F-statistics, line and scatter graphs. The study identified the following risk variables as having significant impact on cost performance: project size, project location, project complexity, level of variations, prime cost sums and provisional sums, estimator bias, market conditions, level of competition, fraudulent practices, construction techniques, economic and political factors, construction accidents, health and safety factors. The study concludes that these factors have to be comprehensively assessed in the light of the individual projects. It recommends among others, the need for a departure from the use of traditional approach of percentage risk adjustment factor to a more comprehensive risk management system.
The document provides an overview of project finance, including its key advantages and disadvantages, development obstacles, features, and business models. It discusses how project financing allows sponsors to construct large projects on a non-recourse basis using high leverage. The financing mix and contractual framework involving the SPV, contractor, operator, suppliers, and off-takers are described. Different factors influencing project size such as market demand, location, production technique, and administrative capacity are also summarized.
On Monday 16 November 2015, Tinder Foundation's CEO Helen Milner OBE visited a Parliament Week event in York to deliver a public lecture entitled 'Does Parliament Dream of Electric Sheep?' These are the slides from her speech.
This document outlines the risk management process for a case study project. It includes:
1. The risk management process with 6 steps: plan, identify, analyze qualitatively, analyze quantitatively, plan responses, and control risks.
2. A risk register containing 16 identified risks for the project with details like probability, impact, risk response strategies.
3. An update to the risk register after 29 months with one risk removed.
The document provides an overview of the risk management process applied to a case study project and the resulting risk register and monitoring.
This document provides an introduction to programmatic risk management. It discusses key concepts like defining a strategy beyond hope, integrating cost, schedule and technical performance, using statistical models for risk, and communicating risk. It emphasizes that single point estimates are insufficient and that risk management requires understanding uncertainty and using techniques like Monte Carlo simulation to develop probabilistic schedules and assess completion confidence intervals. Managing programmatic risk is essential for project success.
In a perfect scenario, the need for either owner or contractor driven claims arguably wouldn't arise. However, in reality, this is rarely the case. This paper introduces a technique that helps with determining root cause of project delays resulting in claims.
The CPM (Critical Path Method) model is a deterministic approach used for project planning and scheduling. It involves identifying all tasks, determining their duration and sequence, and analyzing which path has no float or slack time between tasks. This critical path determines the minimum time needed to complete the project. The CPM makes assumptions that the critical path will not change, activity times are independent and known, and the project completion time is normally distributed. The key steps of CPM include specifying activities, establishing sequences, building a network diagram, estimating activity times, identifying the critical path, and updating the critical path diagram. The overall goal of CPM is to complete the project in the shortest time possible through techniques like fast tracking and crashing the critical
This document discusses cost and schedule overruns that are common in publicly-funded programs. It proposes establishing cost and schedule estimates based on the historical variability of similar past programs, and updating estimates periodically with risks, to increase the probability of on-target program delivery. Specific changes are recommended to how initial estimates are created and agreed upon, including developing activity-based estimates adjusted for issues on past programs. Programs should be budgeted at a 70% probability of meeting cost and schedule targets using this joint confidence level approach. This involves changes to estimating, acquisition, and contracting processes.
Towards Innovate Methods of Construction Cost Management and Controlcivej
Project cost is one of the three main challenges for the construction manager, where the success of a
project is judged by meeting the criteria of cost with budget, schedule on time, and quality as specified by
the owner. Many projects experience extensive delays and thereby exceed initial time and cost estimate.
Available information, good estimating practice and experienced personnel are some of the factors found
to have considerable impact on estimation accuracy. The successful execution of construction projects and
keeping them within estimated cost and prescribed schedules depend on a methodology that requires sound
engineering judgment. So the research aim is to conduct research study and process of exploring the
existing model related to above three types of estimate and their contribution to civil engineering cost
management and control especially getting motivated with the verification and validation component of
CRASP methodology. The objective of this paper or scope of this research in this paper is to conduct
literature study and review towards exploring innovative techniques such as Artificial Intelligence
Techniques or Expert System Techniques available and applicable to make decision making or decision
support regarding construction cost management and control at three levels: (i) before the actual civil
engineering project design begins (ii) after detailed design but before execution and (iii) during project
execution
A CCP is an experienced practitioner with advanced knowledge and technical expertise to apply the broad principles and best practices of Total Cost Management (TCM) in the planning, execution and management of any organizational project or program. CCPs also demonstrate the ability to research and communicate aspects of TCM principles and practices to all levels of project or program stakeholders, both internally and externally.
1. The document discusses cost estimation and management of construction projects. It outlines various factors that must be considered like project planning, scheduling, progress monitoring, time and cost estimation, cost management, change order management, and mitigating cost overruns.
2. Effective cost estimation requires considering construction methodology, resources, duration and feasibility. Time and cost have a strong relationship, as delays increase costs.
3. Cost management ensures a project is completed within budget through accurate budget preparation, crew sequencing, and cost optimization in scheduling. Change order management handles changes fairly.
All About Construction Labour Planning- Excel TemplateSHAZEBALIKHAN1
This document provides an overview of construction labor planning. It discusses the need for labor planning to reduce costs, ensure quality work, and meet schedules. The key steps in labor planning are collecting inputs, assessing manpower requirements, sorting work by category, plotting man-days on a timeline, leveling requirements, and creating a mobilization plan. Productivity is measured by work output per man-day. An Excel template can help calculate labor needs. Attrition rates should also be considered to account for worker turnover. Costs include wages as well as expenses like housing, food, and transportation.
The document describes the process of effects based operations (EBO) in 11 steps: 1) define future scenarios, 2) identify drivers and conditions, 3) analyze driver/condition relationships, 4) develop scenarios, 5) define end states, 6) create effects, 7) identify means, 8) determine capabilities, 9) assess resources, 10) generate reports, 11) rate effect-means pairs. The goal is to identify actions that can achieve a desired strategic outcome through military and non-military means by considering direct, indirect and cascading effects.
International Journal of Engineering Research and DevelopmentIJERD Editor
Electrical, Electronics and Computer Engineering,
Information Engineering and Technology,
Mechanical, Industrial and Manufacturing Engineering,
Automation and Mechatronics Engineering,
Material and Chemical Engineering,
Civil and Architecture Engineering,
Biotechnology and Bio Engineering,
Environmental Engineering,
Petroleum and Mining Engineering,
Marine and Agriculture engineering,
Aerospace Engineering.
This document discusses stochastic project scheduling using the Program Evaluation and Review Technique (PERT) method. PERT introduces uncertainty into activity duration estimates by using three time estimates per activity - optimistic, most likely, and pessimistic. It then calculates the expected mean duration, variance, and distribution for each activity. The critical path is determined using expected mean durations. The overall project duration is calculated as the sum of expected critical path activity durations, and the project variance is the sum of individual critical path activity variances. This allows calculating the probability of completing the project by a certain date using the normal distribution.
This document discusses risk management, cost control, and communication in construction projects. It describes how risk management involves identifying, assessing, and treating risks through various models and communication is key. It also explains that cost control is important for meeting project goals and involves establishing budgets, monitoring costs, and controlling changes. Effective risk management, cost control, and communication are important for construction project success.
This document discusses key concepts for effective risk management on projects. It outlines 5 concepts: 1) hoping is not a strategy, plans with goals and metrics are needed, 2) single point estimates are inaccurate, probabilistic estimates using distributions like triangles are better, 3) integrating cost, schedule, and technical performance is essential, 4) a formal risk management process and model is required, and 5) risk communication is critical. It emphasizes that identifying risks is not enough, plans for mitigating risks must be developed and risks must be retired over time according to the plan.
This document provides an overview of how to conduct an event study in finance. It discusses why event studies are commonly used, how to define the event window and calculate abnormal returns, how to test hypotheses about the impact of events using standardized abnormal returns and cumulative abnormal returns, and how to average returns across firms and time periods. It also covers potential issues like cross-sectional dependence between firms' returns and changing return variances over the event window.
Evaluation of Risk Factors Affecting Cost Performance of Construction Project...IJCMESJOURNAL
Effective management of risk is critical to the success of any construction project. The importance of risk management has grown as projects have become more complex. Contractors have traditionally used financial mark-ups to cover the risk associated with construction projects, but as competition increases and the margins become tighter, they can no longer rely on this strategy and must improve their ability to manage risk. This study has carried out an empirical evaluation of the effect of risk factors on cost performance of projects at delivery. The study is based on the analysis of primary data derived from bills of quantities for the construction/erection of hospital projects by the Ministry of Works and Housing, Jalingo in Taraba State. The obtained data was analyzed using linear regression, t-statistics, F-statistics, line and scatter graphs. The study identified the following risk variables as having significant impact on cost performance: project size, project location, project complexity, level of variations, prime cost sums and provisional sums, estimator bias, market conditions, level of competition, fraudulent practices, construction techniques, economic and political factors, construction accidents, health and safety factors. The study concludes that these factors have to be comprehensively assessed in the light of the individual projects. It recommends among others, the need for a departure from the use of traditional approach of percentage risk adjustment factor to a more comprehensive risk management system.
The document provides an overview of project finance, including its key advantages and disadvantages, development obstacles, features, and business models. It discusses how project financing allows sponsors to construct large projects on a non-recourse basis using high leverage. The financing mix and contractual framework involving the SPV, contractor, operator, suppliers, and off-takers are described. Different factors influencing project size such as market demand, location, production technique, and administrative capacity are also summarized.
On Monday 16 November 2015, Tinder Foundation's CEO Helen Milner OBE visited a Parliament Week event in York to deliver a public lecture entitled 'Does Parliament Dream of Electric Sheep?' These are the slides from her speech.
This document provides printing settings for a block poster that is 2 pages wide, in portrait orientation on letter paper, with borders. It directs the user to a website for tips on printing, assembling and displaying the block poster. The document wishes the user to enjoy their block poster.
This document outlines the individual assignment requirements for a course on architecture, culture, and civilization. Students must research a selected theme related to Malaysian architecture and religious places, and design a timeline and series of 10 postcards to educate others on the historical, architectural, and social connections of the topic. The assignment requires literature research, a timeline, a set of designed postcards, and a 1-minute video montage to be submitted through an e-portfolio.
This document discusses how to differentiate a business school's brand from competitors. It advocates that true differentiation is cultural and institutional, achieved by empowering people and changing minds from the top. Leadership is key to overcoming inertia, lack of ambition and academics who oppose change. The document argues for disrupting the market by telling compelling stories, having a visually striking identity, using social media intelligently, and adopting a provocative attitude. Business schools are encouraged to consider how they can be more disruptive.
This annual sustainability report from Biji-biji Initiative summarizes their work and impacts in FY 2014/2015. It includes indicators on their economic, social and environmental performance. Key highlights include sourcing 76% of materials locally, engaging over 3,800 people through educational programs, incorporating over 10,000 kg of waste materials into projects, and publishing 6 open source designs. The report provides transparency into their operations and progress on sustainability goals.
This document is the final report from Viacheslav Ivanov's internship at Realdania By from December 2014 to June 2015. The report summarizes the key findings of Ivanov's research and master's thesis on Realdania By's partnership model for urban development projects in Denmark. It analyzes the perception and impact of Realdania By's four major projects, identifies strengths, weaknesses, opportunities, and threats, and proposes three strategic initiatives to help overcome challenges and ensure the long-term success of the partnership model. Interviews and questionnaires with internal and external stakeholders were an important part of Ivanov's research.
Sankara Rao P.V has over 10 years of experience as a graphic designer working in Yemen and the United Arab Emirates. He has expertise in designing various materials including posters, brochures, magazine layouts, logos, and signage. Sankara is proficient in programs such as Photoshop, Illustrator, and InDesign. He holds a B.Sc. from Osmania University and is fluent in English, Arabic, Hindi, and Telugu.
A empresa de tecnologia anunciou um novo produto, um smartphone com câmera de alta resolução e bateria de longa duração. O aparelho também possui armazenamento expansível e processador rápido. O lançamento está programado para o próximo mês com preço inicial abaixo da média do mercado.
This document discusses techniques for evaluating projects under uncertainty, including sensitivity analysis, switching values, and probability distributions of outcomes. Sensitivity analysis systematically tests how changes to estimates impact a project's worth. Probability distributions collapse uncertain outcomes into point estimates but lack variance data. Direct or simulated calculations of probability distributions provide a full picture of outcome likelihoods when events are independent.
Project cost management ,cost estimation cost control and evm for large epc projects and is essential for knowing the cost parameters for all construction engineers.
IRJET- Importance of Proper Cost Management in Construction IndustryIRJET Journal
This document discusses the importance of proper cost management in the construction industry. It notes that construction projects are complex and dynamic, and lack of understanding of key factors like scope, time, cost and quality can lead to project failures. Effective cost management is essential for construction companies and involves estimating costs, setting budgets, and controlling costs by comparing actual costs to estimated costs throughout the project lifecycle. The document also examines current challenges in cost management like lack of adequate financial systems, complications from new technologies, and insufficient skills in areas like cost estimation and control. Improper planning and lack of integration between estimation and cost control are also identified as problems.
A Synergistic Approach To Information Systems Project ManagementJoe Osborn
This document discusses synergism in information systems project management. It presents a model of group synergy in IS project management that considers both qualitative and quantitative factors. Qualitative factors include morale, supportiveness, participation, coordination, integration and commitment. Quantitative output includes a structured and on-task team with synchronized productivity. The model provides a framework to better understand how technical and organizational factors can facilitate or inhibit IS project success. It aims to bring qualitative and quantitative aspects of project management together in a complementary manner to help IS professionals improve systems development.
In December 2015, the UK’s National Audit Office reported that one-third of UK government projects were either unachievable or in-doubt. This would have come as a great surprise to most commentators, in particular that two-thirds of the projects were forecast to be on track! It is not immediately clear from the report on what basis these projects are secure about their on-time delivery. How can a project forecast with confidence that it will deliver on time?
Running head critical path method1 critical path method7criticDIPESH30
This document discusses the critical path method (CPM) and its application in project management. It begins by introducing CPM and outlining its key steps: defining tasks, creating a flowchart of task relationships, identifying critical and non-critical paths, determining task times, and locating alternative paths. It then discusses schedule risk analysis and joint confidence level analysis as complementary project management techniques. Schedule risk analysis connects risk information to the project baseline schedule. Joint confidence level analysis provides a holistic view of cost and schedule risk, showing their correlation through a "football chart" shape. The document aims to explain how these techniques can improve project planning and management.
The document discusses various methods for estimating project times and costs, including top-down and bottom-up approaches. Top-down approaches include consensus methods, ratio methods, and the apportion method. Bottom-up approaches include the template method, parametric procedures applied to specific tasks, and detailed estimates for work packages. Estimates should be refined as risks and details become clearer, and contingency funds and time buffers can be added to offset uncertainty.
This document discusses the importance of estimating costs for construction projects and defines key terms related to estimating labor costs. It explains that estimating involves gathering information to visualize the construction process and forecast component and collective costs. For labor costs, the document outlines a three-part process: (1) identifying the craft and determining its hourly labor rate; (2) estimating the craft's productivity rate; and (3) calculating the unit labor cost by dividing the rate by productivity. It provides examples of direct labor costs like wages and indirect costs like insurance that make up the total hourly labor rate.
INFORMATION SYTEMS 3
Part-3: Mr. and Mrs. Rodgers House (House construction)
BUDGET AND RISK MANAGEMENT
1.0.
Overall Project Budget
A technique called Earned Value Management (EVM) compares project performance to the project baseline (Xu et al., 2018). All project managers pursuing Project Management Professional (PMP) certification learn and memorize the earned value calculations. Their application in real life is patchy, though. According to Insight, EVM is among the "critical few" best areas of practice for keeping track of a project's progress from both a schedule and cost standpoint (Vasyunina, 2017). The binary way of thinking about projects is widespread:
· On time versus late
· Over budget versus under budget.
On the project cost, both performance evaluation elements have a significant impact (Chang et al., 2022). If our costs are lower yet we are running late, EVM provides excellent facts of the matter.
Determining Earned Value
Computing EV involves:
· The sum of the up-to-date project budget, known as the planned value (PV)
· Current costs are identical to Actual Cost (AC).
· The project budget is multiplied by the proportion of execution to determine earned value (EV).
Now that we have these numbers, we can start making some computations of:
Schedule Performance Index (SPI) = EV/PV
SPI contrasts actual and anticipated progress. Whenever the SPI value had been than 1.0, fewer tasks were completed than expected. SPI > 1.0 denotes the completion of more work than anticipated.
Determining the CPI:
CPI= AC÷EV
The CPI evaluates the worth of finished work in relation to its true cost. Its score of 1.0 denotes high costs than anticipated. A CPI of greater than one shows that costs remained lower than expected.
For the SPI and CPI, >1 is favorable while 1 is unfavorable.
Remember that;
Subtracting instead of dividing allows you to rapidly determine the difference between the project budget and the timeline. Schedule variance (SV) equals EV-PV, whereas cost variance = EV-AC. You can easily execute the subtraction operation in your head, and in this case, >0 is favorable to 0 in this situation.
Except in the case of SPI or CPI, deviation is reliant on the project's scope. Therefore, we cannot compare it across construction project or across time effectively, as the budget might have changed.
Calculating the Project EAC:
CPI = EAC ÷ Overall Budget
EAC represents the prediction aggregate cost.
In summary:
· Project is halfway to its completion,
· PV = $55,000
· AC= $45,000
The calculations are as follows:
EV=100,000 ×1/2
=$50,000
SV =EV-PV
Where EV=50,000 and PV=55,000
Therefore, SP= 50,000-55,000
=-$5000
In this case, the value of SP is -$5,000, which is unfavorable for our project because it is less than 0.
SPI = EV/PV
Thus;
SP1=50,000 ÷55,000
= $0.91
However, the SPI value is less than.
IRJET- Developing Cost Prediction Model for Building ProjectIRJET Journal
1. The document discusses developing a cost prediction model for building projects using multiple regression analysis. It aims to identify factors affecting project cost and analyze their significance.
2. Seven major factors were selected for the cost prediction model: design related factors, time or cost related factors, parties experience related factors, financial issues related factors, bidding situations related factors, project characteristics related factors and estimating process related factors.
3. The cost prediction model will be developed using SPSS software by determining the factors governing project cost through a questionnaire survey that examines these seven factors.
- Cost is one of 3 Triple constraints of the project. Managing costs of the project is very crucial and hardest part of the project. It spans across all phases of the project right from conception to closure of the project.
- Cost Management is not just controlling “Costs”; it involves definitive planning and preparing budgets. Collecting cost associated data. Comparing the data to prepared budgets and taking appropriate actions when needed.
- The process involved in estimating, budgeting, and controlling cost so that the project can be completed within approved budget.
- Value analysis (value engineering)
• Looking at less costly way to do the same work within the same scope
C:\documents and settings\ckampschulte\desktop\in sync risk range analysisInSync Conference
This document summarizes and compares two capital projects, Case A and Case B, in terms of their risk management approaches. Case A took a single point estimate approach which resulted in fixed contingency amounts, while Case B took a range analysis workshop approach to identify and quantify risks. Case B developed cost and schedule ranges and analyzed key risk drivers, allowing them to model outcomes more accurately. Best practice for risk analysis involves taking a risk-driven, integrated cost-schedule approach to understand contingency needs and prioritize top risks.
IRJET- Implementing Time and Cost Optimization in Commercial Building using P...IRJET Journal
This document discusses implementing time and cost optimization techniques in commercial building projects using Microsoft Project. It describes crashing activities by adding resources like workers and equipment to reduce durations, and using slack time and alternative materials to lower costs. The goal is to complete projects on time or under budget by analyzing the tradeoff between time and cost when crashing critical paths or using different building materials. Manual and software-based methods are evaluated for optimizing the schedule and minimizing total project duration and costs.
The document discusses work breakdown structures (WBS) and their importance in project planning and management. A WBS breaks a project down into smaller, more manageable components or work packages. It provides a framework for estimating costs, scheduling work, and tracking progress. The WBS ensures all necessary work is defined and organized hierarchically from higher to lower levels of detail. It forms the basis for managing project schedules, costs, and resources throughout the project lifecycle.
Project cost management includes planning, estimating, budgeting, and controlling costs to complete a project within its approved budget. A cost management plan establishes how project costs will be planned, structured, estimated, budgeted, and controlled. Cost estimates are developed by analyzing the resources needed to complete project activities using techniques like analogous estimating, parametric estimating, bottom-up estimating, and three-point estimating. Estimates are based on the project scope, schedule, risks, and other factors and are expressed in currency or other measurable units.
Estimating is a complex process involving collection of available and pertinent information relating to the scope of a project, expected resource consumption, and future changes in resource costs. This process is required in all stages of the project life-cycle.
IRJET- Fuzzy Logic in Construction Project Scheduling: A ReviewIRJET Journal
This document reviews the use of fuzzy logic in construction project scheduling. It discusses how construction project schedules are traditionally created using the Critical Path Method (CPM), which relies on deterministic activity durations and cannot account for the uncertainties inherent in construction projects. Fuzzy logic allows activity durations to be represented as fuzzy numbers rather than single values, and fuzzy set operations can be used for network calculations, accounting for uncertainty. The document reviews literature on mathematical models that use fuzzy logic and multi-objective optimization to generate schedules that consider time, cost, material constraints, and decision maker preferences under uncertain conditions.
MBA 6951, Managing Complex Projects 1 Course Learning.docxAASTHA76
MBA 6951, Managing Complex Projects 1
Course Learning Outcomes for Unit II
Upon completion of this unit, students should be able to:
1. Examine the roles and responsibilities of a project manager.
1.1 Explain a project proposal that includes the project scope, schedule, and ultimate deliverables
that will be executed by a project manager.
2. Analyze the elements of measures of performance in the context of the triple constraints.
2.1 Explain a project proposal that includes risks in the context of the triple constraints.
2.2 Explain a project proposal that includes deliverables through measures of performance.
3. Determine the scope of a project.
3.1 Determine a project proposal that provides an overview of the scope of a project.
Course/Unit
Learning Outcomes
Learning Activity
1.1
Unit Lesson
Chapter 5: Management Functions, pp. 145-170
Chapter 7: Conflicts, pp. 237-246
Unit II Assignment
2.1
Unit Lesson
Chapter 5: Management Functions, pp. 145-170
Chapter 7: Conflicts, pp. 237-246
Unit II Assignment
2.2
Unit Lesson
Chapter 5: Management Functions, pp. 145-170
Chapter 7: Conflicts, pp. 237-246
Unit II Assignment
3.1
Unit Lesson
Chapter 5: Management Functions, pp. 145-170
Unit II Assignment
Reading Assignment
Chapter 5: Management Functions, pp. 145–170
Chapter 7: Conflicts, pp. 237–246
Unit Lesson
Management responsibilities involve the planning, organizing, staffing, controlling, and directing of people and
activities that will ultimately achieve the objectives parlayed within the organizational goals. Controlling is
actually a measurement function, which allows for evaluation and ultimate corrections that lead to ongoing
improvement and innovation within the organization. Directing suggests that the leader is actually
implementing the plans and involves several steps.
The interactive slide below explains the different steps in directing by the leader:
Click here to access the interactive slide.
Click here to access the interactive slide transcript.
UNIT II STUDY GUIDE
Managing Projects
https://online.columbiasouthern.edu/bbcswebdav/xid-77177349_1
https://online.columbiasouthern.edu/bbcswebdav/xid-77175396_1
MBA 6951, Managing Complex Projects 2
UNIT x STUDY GUIDE
Title
Once this structure has been established, managers must journey through the concepts of power, authority,
and responsibility. The ideal situation is that a project manager would have both the responsibility and
authority to complete the task, but many times, they have the authority but not necessarily the formal power.
This creates a void in their effectiveness unless they can utilize other influences such as those indicated in
the interactive slide below.
The interactive slide below explains the different types of rewards and examples.
Click here to access the interactive slide.
Click here to access the interactive slide transcript.
Another important ar.
Cost Overrun Causes Related to the Design Phase in the Egyptian Construction ...World-Academic Journal
This document summarizes a research paper that aimed to identify and evaluate the most significant causes of cost overrun related to the design phase of construction projects in Egypt. Through a literature review and expert interviews, the researchers developed a list of potential cost overrun causes. They then conducted a survey with 101 industry professionals to quantitatively assess the frequency and impact of each cause. The results showed that the most important causes were design changes/variations and unrealistic construction time estimates. The degree of agreement between owners, contractors, architects, and project managers was also analyzed to identify any conflicting perspectives on the causes.
Similar to Estimate costs in fragile and transitional contexts - July - 2014 (20)
Cost Overrun Causes Related to the Design Phase in the Egyptian Construction ...
Estimate costs in fragile and transitional contexts - July - 2014
1. Estimate costs in fragile and transitional contexts
23 July 2014
205680
2. b
Table of Contents
List of Tables ........................................................................................................................................iii
List of Figures ....................................................................................................................................... iv
List of Equations.................................................................................................................................... v
Abstract................................................................................................................................................. 1
Introduction .......................................................................................................................................... 2
Estimates Costs within Fragile and transitional contexts..................................................................... 3
Cost Effectiveness................................................................................................................................. 3
Estimate Accuracy................................................................................................................................. 4
Three-point estimating technique application into a fragile and transitional context ........................ 7
Assumptions...................................................................................................................................... 8
Risk.................................................................................................................................................... 8
Three-Point Estimates Application ................................................................................................... 9
Conclusion........................................................................................................................................... 11
Bibliography ........................................................................................................................................ 11
6. 1
Abstract
The methods of cost estimation and techniques are very important for the development and
humanitarian sector, especially within fragile and transitional contexts. For the funding agencies
and for implementing partners these calculations are essential to the process of large funding.
This work presents the issues of estimating cost within the fragile and transitional contexts. Explain
how to define the three point estimating technique and its characteristics. Apply the three-point
estimating technique into the fragile and transitional context using Sudan context as an example.
Conclusions are presented to reflect the important application of this technique.
7. 2
Introduction
Planning and developing constructions project within a fragile and transitional context is not easy
for a planning team. ‘‘The three-point estimating technique considers estimation uncertainty and
risk and using three estimates to define an approximate range of activity’s cost, which could
significantly improve the single point activity cost estimates’’ [2].
Within development and humanitarian sector, challenging contexts are defined by unpredictable
post conflict environment, lack of capacity, weak infrastructure, and limited provision of basic
services, all of these factors together cost money. In addition, unstable economy including inflation,
currency fluctuation and market stagnation would also impact cost. In such situations cost
effectiveness of constructions projects appears to be more expensive compared to its counterparts.
This work presents part of the solution during the development phase since there are several root
causes of the problem of project cost management of constructions projects in fragile and
transitional context, which can be addressed separately. For example, protracted decision-making
process within an organization could affect cost management negatively. However, estimate costs
during the development phase considered as the most significant part of the solution. Accurate
estimate costs in the early development phase can affect positively on the project cost
effectiveness.
It’s significant for a planning team and an implementing team under such circumstances and
contexts, to have accurate calculations during estimating cost. Using the three-point estimating
technique is simple yet can be of more accurate result and impact into the cost. While describing
the technique in details with examples, practical application will be examined.
8. 3
Estimates Costs within Fragile and transitional contexts
Fragile and transitional contexts are characterized by unpredictable post conflict environment
which can trigger new violence. In addition, lack of capacity, weak infrastructure, limited provision
of basic services, unstable economy including inflation, currency fluctuation and market stagnation.
In such contexts a construction project can easily deviate from its plan, a deviation that cots money
or time and could result on negative consequences. These negative consequences appear to be the
result of insufficient analytical work prior to project design, the lack of baseline data, poor project
design. Therefore, under this circumstances estimate costs during the development phase should
consider these challenges. Unfortunately in the real life most of this factors and challenges that
affect the costs are being neglected and they are only faced during the implementation, where a
high cost extension will be requested, to address the uncertainty and the risks. While if it was
considered in the first place it would have cost less money and less time.
Cost Effectiveness
‘‘Cost effectiveness is a measure of how economically resources or inputs have been converted into
results. Of particular importance is whether alternative approaches would have achieved the same
results with fewer resources’’ [3]. The level of cost effectiveness can indicate how accurate the cost
estimates have been performed. The cost effectiveness of many construction projects within fragile
and transitional contexts found to be more expensive than their counterparts. Most of the time in
the real life estimating cost at the development phase for these projects uses limited techniques
like, expert judgment or analogous estimating which both rely on historical data of similar projects.
These methods are less costly and less time consuming than other techniques, but they are also
generally less accurate.
Table 1 show a comparison between the administration costs of two programs program A and
program B implemented in the same context. The last column shows higher administration costs
for program A compared to program B administration costs.
9. 4
Administrative costs comparison (Source – 2012, Independent Evaluation of the World Bank Administered Multi-Donor Trust Fund in
Sudan Final Evaluation Report)
Using proper estimates costs technique can improve the accuracy of estimating costs, by
considering estimation of uncertainty and risk, which address the fragile and the transitional
contexts cost issues.
Estimate Accuracy
Since estimate cost is a prediction of future expenses its accuracy will not be precise.
‘’An estimate is a prediction of the expected final cost of a proposed project (for a given scope of
work). By its nature, an estimate is associated with uncertainty, and, therefore, is also associated
with a probability of overrunning or underrunning the predicted cost’’ [1].
Estimate cost is an iterated process gets more accurate by getting better picture of the project
overtime. ‘’cost estimate should be reviewed and refined during the course of the project to
10. 5
reflect additional detail as it becomes available and assumptions are tested. The accuracy of a
project estimate will increase as the project progress through the project lifecycle’’ [2].
‘’Estimate accuracy tends to improve (i.e., the range of probable values narrows) as the level of
project definition used to prepare the estimate improves. Generally, the level of project definition
is closely correlated with engineering progress; thus, as the level of engineering progresses,
estimate accuracy improves. This is shown in Figure 1.’’ [1]
Source (2012, Skills and Knowledge of Cost Engineering)
11. 6
Three-point estimating technique
‘‘Project cost management is primarily concerned with the cost of the resources needed to
complete project activities. The cost management planning effort occurs early in project planning
and sets the framework for each of the cost management processes’’ [2]. The Project Management
Body of Knowledge (PMBOK GUIDE) defines Estimate costs as the process of developing an
approximation of the monetary resources needed to complete project activities.
Three-point estimating technique: ‘’use three estimates to define an approximate range for an
activity’s cost considering estimation of uncertainty and risk’’[2].
For example:
If we ask Mohammed the followings:
Q. Mohammed how long does it take you to excavate a ditch?
A. Mohammed first answer, it takes me exactly (40 minutes)
Q. Then if we press Mohammed a little bit further what the longest it has ever taken you?
A. Mohammed in this case may say, well the worst ever took me 2hrs and 20 minutes – during
heavy rains, that would be (140 minutes)
Q. And if we push him further what the quickest you’ve ever done your excavation?
A. He might say 25 minutes and that was during a very soft soil (25 minutes)
So now we have three estimates that Mohammed has given us for his ditch excavation. He gave us
3 separate estimates:
- Exactly 40 minutes
o This is Mohammed’s Most Likely estimate as per the three-point estimating
technique.
- The worst case of 140 minutes. Again the three point estimating technique refer this as
o His PESSIMISTIC estimate.
- And the best case the twenty five minutes that he gave us – in very soft soil. (25 minutes)
o This is his Optimistic estimate.
How would we use these estimates? Let us assume that Mohammed’s ditch excavation is an
activity within a project with plenty of other tasks that rely on this one. What is the best time we
should put in the schedule 40 minutes or 140 minutes or the 25 minutes. Three-point estimating
could help us with that. Two commonly used formulas are triangular and beta distributions.
12. 7
The first formula adds optimistic to most likely to pessimistic and divides them by 3.
- Triangular Distribution. cE = (cO + cM + cP) / 3
cE = Cost Estimates
cO = Cost Optimistic
cM = Cost Most likely
cP = Cost Pessimistic
Mohammed commuting time = (25 + 40 + 140)/3
= 68 minutes
Remember when we first asked Mohammed about his excavation time he said 40 minutes and
Mohammed is the expert of his excavation. To give additional weighting to what Mohammed came
out with as most likely estimate. We use a second formula that adds optimistic to most likely
multiplied by 4 to pessimistic and divides them by 6.
- Beta Distribution (from traditional PERT analysis). cE = (cO + 4cM + cP) / 6
cE = Cost Estimates
cO = Cost Optimistic
cM = Cost Most likely
cP = Cost Pessimistic
Mohammed commuting time = (25 + (40X4) + 140)/6
= 54 minutes
This answer is closer to what Mohammed has given us as most likely. This technique of cost
estimation considers the uncertainty estimates like heavy rains, soft soil or hard soil, and any risk
occurrence like the appearance of huge rock while excavation.
Three-point estimating technique application into a fragile and transitional context
Again this work presents part of the solution since there are several root causes of the problem of
constructions projects costs management in fragile and transitional contexts that can be addressed
in a separate work. This work will handle estimate costs during the development phase which
considered being significant part of the solution, since it involves analysis that address uncertainty
and risk at the early stages of a project, which would improve the accuracy of estimating costs.
13. 8
Cost estimates are a prediction based on the information known at a given point in time. In
challenging contexts the unavailability of relevant information or the accuracy of the information
could be an issue.
Taking Sudan context as an example three-point estimates technique will be applied to a project to
examine the relevance of this technique, and how it considers the uncertainty and the risk
involved.
Our example will be estimate costs for Basic Education Project in Sudan in three states with one
state subject to renewed instability and insecurity. ‘’The project’s activities focus on improving
results in the following key area:
- The number of students enrolled in primary education in selected schools’’ [3].
To achieve these results we have identified the following scope of work:
1. To rehabilitate and furnish (9) schools in three states, three schools for each state.
2. To construct (3) new Teacher Training Institute (TTI) in three states, one TTI for each state.
3. To supply TTIs with furniture, computer and laboratory equipment, and other necessities.
The planning team will estimate costs using three –point estimates technique based on the
available details and assumptions.
Assumptions
a. The design and the constructions materials for the schools and for the Teacher Training
Centers are agreed.
b. Duration of the project is one year
c. Inflation is expected to increase by 30%
d. Currency fluctuation, the local currency is forecasted to drop down in front of USD
e. Local constructions market stagnation is expected with scarcity on construction materials as
a result
Risk
a. Renewed instability and insecurity in one state
14. 9
Three-Point Estimates Application
Using three-point estimates the team will estimate costs for the three components considering the
assumptions and risk as variables.
The team has calculated that each school’s rehabilitation and furnishing would cost $10,000.
Each TTI would cost $7,000.
And the TTI’s supply for each TTI would cost $6,000.
Being Optimistic means that: deliver project during the project duration, no major inflation
appeared, local currency was stable and local constructions market is also stable. In this case our
total project amount would show (9 X 10,000 + 3 X 7,000 + 3 X 6,000) = $129,000
Looking into the most likely case would be: deliver project during the project duration for two
states, while for the one state subject to renewed instability and insecurity, consider adding more
resources to complete faster, in anticipation to any expected delays due to any renewed instability
and insecurity. That will increase the cost of the three components in one state. It’s most likely that
the inflation will take place but with 15%. Therefore we will include inflation of 15% for all the
materials to be purchased for constructions and for the TTI supply, which increase the cost of the
three components in the three states. It’s most likely that local currency will remain stable and
local constructions market also will remain stable.
To reflect the increase of the costs in the three components in one state:
A = (3*school, increase by 3,500 per each)+(1*TTI, increase by 2,000)+(1*TTI supply, increase by
1,500) = (3*13,500)+(1*9,000)+(1*7,500) = $57,000
B = the other two states costs will remain as they are = $86,000
(A+B) = $143,000
To reflect the increase on the inflation:
(A + B)*15% = (57,000+86,000)*15% = $157,025
Therefore our project total cost is getting into = $157,025
Finally for the pessimistic situation: again with the state subject to insecurity and instability we are
expecting delays, therefore we will add more resources to complete faster, which will increase the
costs for the three components in the one state. While for the inflation we will apply the 30%
increase here. For the currency fluctuation we are considering local currency drop down which may
increase the prices in the market, which again be reflected into the costs. For the local construction
15. 10
market stagnation we will consider the scarcity of the constructions materials which means
reflected in its prices increase.
To reflect the increase of the costs in the three components in one state:
A = (3*school, increase by 3,500 per each)+(1*TTI, increase by 2,000)+(1*TTI supply, increase by
1,500) = (3*13,500)+(1*9,000)+(1*7,500) = $57,000
B = the other two states costs will remain as they are = $86,000
(A+B) = $143,000
Currency fluctuation included in the inflation calculation since the effect is reflected in the prices
increase.
To reflect the construction materials prices increase due to its scarcity. We will apply only on the
school and TTI constructions.
C = (9*school, increase by 1,500 per each)+(3*TTI, increase by 500 per each)
C = $15,000
To reflect the increase on the inflation:
(A + B + C)*30% = (57,000+86,000+15,000)*30% = $ 186,050
Our project total cost is = (A+B +C) = $ 186,050
Now we have our three estimates. Using the following three-point estimating formula we will
calculate the final project cost estimate:
Beta Distribution. cE = (cO + 4cM + cP) / 6
cE = Cost Estimates
cO = Cost Optimistic
cM = Cost Most likely
cP = Cost Pessimistic
The final project cost estimate = (129,000+(4*157,025)+186,050) / 6 = $ 157,192
As you can see the final cost is very close to the most likely amount. During this estimates we have
considered the uncertainty and risk. In addition, we have addressed the different variables of the
fragile and transitional context. We have increased the level of confidence of our costs to a reliable
level, with a simple method of calculation.
16. 11
Conclusion
The three-point estimating technique is a simple technique yet provides a good level of confidence
on the cost estimates. This work presented a technical review for the technique and its application
in fragile and transitional contexts.
The calculation is simple and straightforward and can be implemented by using a simple program.
Can be used by any type or size of projects with advanced costs analysis performed.
This technical review suggests that the three-point estimate is reliable for fragile and transitional
contexts costs estimations.
Bibliography
No. Description
1. AACE (2012). Skills and Knowledge of Cost Engineering: AACE.
2. PMI (2013). The Project Management Body of Knowledge: Fifth Edition. Newtown Square: Project
Management Institute.
3. ICF International GHK (2012). Independent Evaluation of the World Bank Administered Multi-
Donor Trust Fund in Sudan Final Evaluation Report.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/311988/Multi-
Donor-Trust-Fund-Sudan.pdf