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Level: Intermediate
TCM Section(s):
7.3. Cost Estimating and Budgeting
3.3. Investment Decision Making
Venue: 2020 AACE International Conference & Expo
Abstract: A common issue often faced by estimators is how to prepare an estimate when there is little information or scope definition on which to base the estimate. This paper provides an overview of conceptual estimating methodologies commonly used for the preparation of Class 5 estimates. Particular application to preparing capital facility estimates for the process industries is used although the techniques can be used to support estimating in other industries as well.
There are many order-of-magnitude or conceptual estimating methods, and each can be useful in a specific situation. Often, a single estimate may rely on using a combination of estimating techniques for different portions of the project. The conceptual estimating methods that will be discussed in this paper include:
• Analogy Estimating
• Capacity Factored Estimating
• End-Product Units Estimating
• Physical-Dimensions Estimating
• Parametric Estimating
• Expert Judgement
This paper expands upon an earlier AACE International paper So You Think You’re an Estimator? [1], incorporating information from AACE International (AACE) recommended practices such as AACE RP 59R-10: Development of Factored Cost Estimates – As Applied in Engineering, Procurement, and Construction for the Process Industries [2]; as well as from other sources, such as Sharpen Your Cost Estimating Skills [3], an article reprinted in the AACE Cost Engineering Journal.
TCM Section(s):
7.3. Cost Estimating and Budgeting
3.3. Investment Decision Making
Venue: 2020 AACE International Conference & Expo
Abstract: A common issue often faced by estimators is how to prepare an estimate when there is little information or scope definition on which to base the estimate. This paper provides an overview of conceptual estimating methodologies commonly used for the preparation of Class 5 estimates. Particular application to preparing capital facility estimates for the process industries is used although the techniques can be used to support estimating in other industries as well.
There are many order-of-magnitude or conceptual estimating methods, and each can be useful in a specific situation. Often, a single estimate may rely on using a combination of estimating techniques for different portions of the project. The conceptual estimating methods that will be discussed in this paper include:
• Analogy Estimating
• Capacity Factored Estimating
• End-Product Units Estimating
• Physical-Dimensions Estimating
• Parametric Estimating
• Expert Judgement
This paper expands upon an earlier AACE International paper So You Think You’re an Estimator? [1], incorporating information from AACE International (AACE) recommended practices such as AACE RP 59R-10: Development of Factored Cost Estimates – As Applied in Engineering, Procurement, and Construction for the Process Industries [2]; as well as from other sources, such as Sharpen Your Cost Estimating Skills [3], an article reprinted in the AACE Cost Engineering Journal.