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COST > Module 3 > Flashcards

Module 3 Flashcards

1
Q

The management of project cost

A

Cost engineering

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2
Q

Cost engineering involves the ff:

A
  • estimating
  • cost control
  • cost forecasting
  • investment appraisal
  • risk analysis
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3
Q

What is the primary aim of cost engineering?

A

to achieve the ideal balance
between the price, quality and time obligations of a project

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4
Q

What are the phases in construction?

A
  • pre construction
  • construction phase
  • post construction
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5
Q

Content of pre construction

A
  1. Land acquisition
  2. Technical consultation
  3. Design process
  4. Budget and estimation
  5. Permits
  6. Hiring of contractor
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6
Q

Content of construction phase

A
  1. Site clearing and layout
  2. Excavation and foundation
  3. Framing and masonry
  4. Slab
  5. Roofing
  6. Finishing
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7
Q

Content of post construction

A
  1. Occupancy permit
  2. Project turnover
  3. Warranty
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8
Q

What are the reasons construction project fail?

A
  • poor estimating
  • scope creep
  • delays
  • confusing specifications
  • budgetary problems
  • communication failure
  • inadequate planning
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9
Q

It refers to the overall cost for the development of a facility or an asset?

A

Construction cost

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10
Q

It is a complex process since it involves variable factors.

A

Estimation of construction cost

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11
Q

Cost in construction can be of _________ costs or _________ costs.

A

Tangible and intangible

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12
Q

It is the cost that can be measured in monetary terms.

A

Tangible costs

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13
Q

Example of tangible costs.

A

Labor and material costs

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14
Q

_________ are the costs that are difficult to measure in monetary terms

A

Intangible costs

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15
Q

Example of intangible costs.

A

Service-related cost and goodwill

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16
Q

Project cost = __________ + _________ + __________+__________+___________

A

Direct cost
Indirect cost
Fixed cost
Variable cost
Sunk cost

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17
Q

What are the types of construction cost?

A
  • direct cost
  • indirect cost
  • fixed cost
  • variable cost
  • sunk cost
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18
Q

It is the cost incurred due to the work performed on the specific project.

A

Direct cost

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19
Q

Example of direct cost.

A

Wages
Bonuses
Material cost
Subcontractor cost

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20
Q

It is the cost of running the organization

A

Indirect cost

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21
Q

Example of indirect cost

A

Facilities
Water and electricity
Accounting
Security

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22
Q

It is the cost that does not change with the size of the project or its duration.

A

Fixed cost

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23
Q

Example of fixed cost

A

Machinery setup cost
One time advertisement

24
Q

It is the cost which grows in direct relationship to the size and length of the project.

A

Variable cost

25
Q

Example of variable cost

A

Equipment rental
Project based manpower

26
Q

It is the cost which has already occurred and over which we no longer have any control.

A

Sunk cost

27
Q

Example of sunk cost

A

Losses

28
Q

anything that is required for the delivery of the project and that cannot
be included in the direct costs. Generally, _________ costs are 8% to 10% of the contract
value.

A

Overheads

29
Q

Example pf overheads

A

• Salaries and benefits
• Insurance policy – Group workmen policy, Contractors all risk (CAR) policy, equipment
policy, provident fund, premium etc.
• Financing cost – Interest, guarantees, warranties, bonds, penalties etc.
• Progress photographs and videos
• Conveyance cost – Cost for the transportation of labors to and from the site, senior
engineers for their site inspection, employees transportation cost etc.
• Travel and transfer cost
• Temporary site installations and facilities like barracks, parking, site offices etc.
• Utilities like electricity, water, drainage etc which are temporary for the site offices,
barracks
• Taxes and Duties
• Miscellaneous expenses

30
Q

is the backup money or future money that we keep aside.
_________ are usually 2% to 5% for normal projects whereas it increases up to a
maximum of 10% if the project is uncertain at the time of tender

A

Contingency

31
Q

combination of general office overheads, risk and contingency

A

Markup

32
Q

It is the determination of probable
construction costs of any given project.

A

Building construction estimating

33
Q

The purpose of ____________ is to describe the steps for developing size, effort, cost, schedule and critical resource
estimates for a project throughout its life cycle.

A

Estimating process

34
Q

Accuracy of Estimates

A

 Level of detail – i. e. the degree of decomposition of the Work Breakdown Structure.
 Risk assessment results and the remediation plan.
 Quality of requirements.
 The point in the project lifecycle where the estimating took place.
 The estimator’s experience.
 The estimating method.

35
Q

What are the three level of estimating accuracy

A

Ballpark estimates
Preliminary estimates
Accurate estimates

36
Q

are made when little information about the project is available and there are no
detailed requirements, except the initial project request.

A

Ballpark estimates

37
Q

The accuracy range of the ballpark estimates has a range of

A

-25% to +75%

38
Q

are used to establish the preliminary project budget and are often used to
establish initial project funding

A

Preliminary estimates

39
Q

The accuracy range of preliminary estimates never exceeds

A

-10% to +25%

40
Q

Accurate or definitive estimates are prepared from a well-defined detailed data and WBS

A

Accurate estimates

41
Q

The best accuracy that can ever be achieved has a range of

A

-5% to +10%

42
Q

What are the type pf estimates?

A

Assembly estimating
Square-foot estimates
Parametric estimates
Model estimating
Project comparison estimates
Detailed estimates

43
Q

rather than bidding each of the individual components of the project, the estimator bids the components in
groups known as assemblies.

A

Assembly estimating

44
Q

It is useful for conceptual and preliminary estimates. By using broad assemblies, an estimate can be prepared
quickly for an entire building

A

Assembly estimating

45
Q

This are prepared by multiplying the
square footage of a building by a cost per square foot and then adjusting the price to compensate for differences in the building heights, length of the building perimeter, and other building components.

A

Square-foot estimates

46
Q

It is useful for preparing conceptual estimates based on assumptions of key building parameters or estimates based upon early designs.

A

Parametric estimates

47
Q

the equations used in ___________
estimates are more complex and may
use log functions, ratios of parameters,
and multiplication of parameters

A

Parametric

48
Q

It similar to assembly
estimating, but it requires less input
from the estimator.

A

Model estimating

49
Q

It uses computer models to prepare an
estimate based on a number of
questions answered by the estimator

A

Model estimating

50
Q

These are prepared by comparing the cost of a proposed project to a completed project.

A

Project comparison estimates

51
Q

the estimator starts with the costs of a comparable project and then makes adjustments for
differences in the project.

A

Project comparison estimates

52
Q

Includes determination of the quantities and costs of everything that is required to complete the project.

A

Detailed estimates

53
Q

It Includes Materials, Labor, Equipment, Insurance, Bonds, Overhead, and Profit

A

Detailed estimates

54
Q

The contractor must have a complete set of contract documents. Each item of the
project should be broken down into its parts and estimated

A

Detailed estimates

55
Q

What are the common mistakes in estimation?

A

• Not conducting a site visit
• Labor cost
• Construction Materials Costs & Supplies
• Making Uneducated Guesses
• Failing to Assess Risks & Creating Contingencies
• Not Reviewing Your Work
• Not Reviewing Subcontractor Estimates

COST (4 decks)

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