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Cost Estimators Cost Engineeringand Total Cost


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Resume 17 June 2011

Published in: Business, Technology
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Cost Estimators Cost Engineeringand Total Cost

  1. 1. Cost Estimators: Cost Engineering and Total Cost Management Cost Engineering and Total Cost Management Cost Estimators:
  2. 2. Accurately forecasting the cost of future projects is vital to the survival of any business. <ul><ul><li>Cost estimators develop the cost information that business owners or managers need to make a bid for a contract or to decide whether a proposed new product will be profitable. They also determine which endeavors are making a profit. </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Compile and analyze data on all of the factors that can influence costs—such as materials, labor, location, and special machinery requirements, including computer hardware and software. Job duties vary widely depending on the type and size of the project. </li></ul></ul>
  3. 3. Activities <ul><ul><ul><li>begins with the decision to submit a bid </li></ul></ul></ul><ul><ul><ul><li>review ing various preliminary drawings and specifications </li></ul></ul></ul><ul><ul><ul><li>visits the site of the proposed project </li></ul></ul></ul><ul><ul><ul><li>gather information on access to the site and the availability of electricity, water, and other services, as well as on surface topography and drainage   </li></ul></ul></ul><ul><ul><ul><li>determines the quantity of materials and labor the firm will need to furnish ( quantity survey or 'takeoff') </li></ul></ul></ul><ul><ul><ul><ul><li>completing standard estimating forms, filling in dimensions, numbers of units, and other information </li></ul></ul></ul></ul><ul><ul><ul><ul><li>concerning equipment needs, the sequence of operations, the size of the crew required, and physical constraints at the site </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Allowances for wasted materials, inclement weather, shipping delays, and other factors that may increase costs also must be incorporated in the estimate.  </li></ul></ul></ul></ul><ul><ul><ul><li>  prepares a cost summary for the entire project </li></ul></ul></ul><ul><ul><ul><ul><li>including the costs of labor, equipment, materials, subcontracts, overhead, taxes, insurance, markup, and any other costs </li></ul></ul></ul></ul>
  4. 4. Activities Decision to submit a bid Reviewing Preliminary Drawings and Specifications Visit Site of the proposed project Gather Information Quantity Survey &quot;Takeoff&quot; Cost Summary
  5. 5. What are Cost Engineering and TCM? <ul><li>Total cost management (TCM) is the effective application of professional and technical expertise to plan and control resources, costs, profitability and risk. </li></ul><ul><ul><ul><li>a systematic approach to managing cost throughout the life cycle of any enterprise, program, facility, project, product, or service </li></ul></ul></ul><ul><li>  </li></ul><ul><li>This is accomplished through the application of  </li></ul><ul><li>cost engineering and cost management principles, proven methodologies, and the latest technology in support of the management process. </li></ul>
  6. 6. Total Cost Management <ul><li>Total cost management is that area of engineering practice where engineering judgement and experience are used in the application of scientific principles and techniques to problems of business and program planning. </li></ul><ul><li>  </li></ul><ul><li>Practices areas called Cost Engineering : </li></ul><ul><ul><li>cost estimating;  </li></ul></ul><ul><ul><li>economic and financial analysis;  </li></ul></ul><ul><ul><li>cost engineering;  </li></ul></ul><ul><ul><li>program and project management;  </li></ul></ul><ul><ul><li>planning and scheduling;  </li></ul></ul><ul><ul><li>cost and schedule performance measurement, and  </li></ul></ul><ul><ul><li>change control </li></ul></ul><ul><li>the &quot;process&quot; through which these practices are applied is called Total Cost Management or TCM </li></ul>
  7. 7. Engineering has multiple dimensions <ul><li>The most obvious are: </li></ul><ul><ul><li>physical design </li></ul></ul><ul><ul><li>calculation and analysis tasks done to support that design </li></ul></ul><ul><ul><li>money, time, and other resources that are invested in the creation of the designed asset </li></ul></ul>COST
  8. 8. Skills and Knowledge Required <ul><li>Understanding and managing the cost dimensions requires skills and knowledge in: </li></ul><ul><ul><li>business and program planning;  </li></ul></ul><ul><ul><li>cost estimating;  </li></ul></ul><ul><ul><li>economic and financial analysis;  </li></ul></ul><ul><ul><li>cost engineering;  </li></ul></ul><ul><ul><li>program and project management;  </li></ul></ul><ul><ul><li>planning and scheduling; and  </li></ul></ul><ul><ul><li>cost and schedule performance  </li></ul></ul><ul><li>measurement and change control </li></ul>
  9. 9. Cost engineering practitioners tend to be: <ul><ul><li>specialized in function  </li></ul></ul><ul><li>(e.g., cost estimating, planning and scheduling, etc.); </li></ul><ul><ul><li>focused on either the asset management or project control side of the TCM process; and </li></ul></ul><ul><ul><li>focused on a particular industry  </li></ul></ul><ul><li>(e.g., engineering and construction, manufacturing, information technology, etc.);  </li></ul><ul><li>or asset type (e.g., chemical process, buildings, software, etc.). </li></ul>
  10. 10. Cost engineering practitioners <ul><ul><li>cost estimator,  </li></ul></ul><ul><ul><li>quantity surveyor,  </li></ul></ul><ul><ul><li>parametric analyst,  </li></ul></ul><ul><ul><li>strategic planner,  </li></ul></ul><ul><ul><li>planner/scheduler,  </li></ul></ul><ul><ul><li>value engineer,  </li></ul></ul><ul><ul><li>cost/schedule engineer,  </li></ul></ul><ul><ul><li>claims consultant,  </li></ul></ul><ul><ul><li>project manager, or  </li></ul></ul><ul><ul><li>project control lead </li></ul></ul>