Cost overrun factors and project cost

State-of-practice[ edit ] Published surveys on estimation practice suggest that expert estimation is the dominant strategy when estimating software development effort. For a review of effort estimation error surveys, see. This is believed to be unfortunate, because communication problems may occur and because the concepts serve different goals.

Cost overrun factors and project cost

Choosing Suitable Land Accurate cost estimate is vital to potential house owners as well as construction contractors like us to make budgetary decision and determine scope of project. Project cost overrun leads you to the needs to borrow more money from the bank or refinance your construction loan which may cause loan extension penalties to you.

Cost-Per-Square-Footage Method The most common and easiest way to forecast the building cost of your dream house is counting the area cost per area. Look around any residential area with newly constructed houses that almost match your size, architectural design and favorite features of your dream house, then take the price of house and divide by the area square feet or square meter of the house.

Remember to deduct the price of the land first from the price of the house because different areas have different range of prices for land. To be more precise, take a sample of few units in your area or nearby your area and then calculate an average cost of square footage.

Finally, you are good to go to estimate the building cost by multiplying the area of your house plan. This method only helps you to get an approximate value unless the house is almost exactly the same as the house you want to build.

However, once you have the average cost, you can modify the plans to suit and work within budget. What Else Should You Consider? Always remember that every extra feature that added to your house after awarding the contract will cost more to your final cost.

Too many small changes make a huge difference in price without you even noticed it. Plan and estimate construction expenses as early as possible to save on costs.

Here are some of the important factors to consider: Size of House Smaller house can save on building costs as the use of building materials will be reduced and more economical to maintain in future.

For example, larger room requires higher cooling capacity of air-conditioner to provide the same comfort you need. Level of House Consider to build house with two or three levels as compared to single level, you can enjoy more living space in taller house with the same floor area. However, higher level of house requires more complicated structural design like base foundation which leads to higher building cost.

Seek a balance between height and area.

Cost overrun factors and project cost

Other than height, building a house on a flat ground is always cheaper than house with basement. Site preparation for construction of basement like grading, removal of soil and rock blasting can be quite expensive.

Shape of House House with simple shape like rectangular or box shape gives advantage on cost. Having complex or odd shape with angles brings challenge to structural design and increases cost of labor and building materials.

Useful Space and Furnishing Define the purpose of each room and think how furnishing would be arranged or set in the room. Useful space is a living space where you need to access and use everyday like bedroom and living room.

Cost estimate - Wikipedia

For instance, try to work out the space with furniture and cabinets to ensure you fully utilize the space and prevent empty or dead space.

Rearrange until the layout satisfies you. Garage is even twice the size than before, think carefully about redundancy of space. Flexible space with movable partitions is also worth considering. Sustainable House Nowadays, green building is getting popular and import in architectural design that focuses on conservation of energy, sensitivity to environment as well as increase in life quality.

This can be as simple as using recycled building materials, non-synthetic materials and non-chemical additives used in paints.PROJECT COST ESTIMATION AND CONTROL.

AN IEI SUBMISSION TO THE MINISTER FOR THE ENVIRONMENT & LOCAL GOVERNMENT June at tender stage of projects curtail cost overruns said to be averaging close to 40% between the acceptance of tenders for civil engineering projects and project completion In preparing this submission. his colleagues in Government and Departmental .

Cost Estimation Definition A cost estimate is defined for this report/project as the initial projected highway construction cost figure.

Cost estimation is the process bywhich, based on information available. One of the main functions of project management is to forecast and track costs to avoid cost overruns.

Triple constraints of Project Management

While poor execution of project management tasks can lead to increased costs, you can link less obvious reasons to the processes of project management and the underlying nature of complex projects. Dr. Morris has worked extensively in the Middle East, North Africa, Europe, South America and North America in the management of a wide variety of projects in the areas of steel, telecommunications, utilities, petrochemicals, and city government planning.

Imagine that you are asked to estimate the total cost of a project. You have measured the quantities, and estimated the cost and price of each resource required for executing the scope of the project.

Fig. 4 shows the detailed steps utilized to perform the various activities of the present research. Factors that affect cost and schedule overruns are identified and discussed using literature review and experts opinion. A questionnaire survey is conducted to collect the impact of each factor.

6 Evident Reasons for Budget Overruns