Cost estimating is “the administrative practice devoted to the management of project cost, involving such activities as estimating, cost control, cost forecasting, investment appraisal and risk analysis.” “Cost budgets, plan and monitor investment projects. They seek the optimum balance between cost, quality and time requirements.”
Skills and knowledge of our specialists are similar to those of quantity surveyors. In many industries, cost engineering is synonymous with project controls. As the title “engineer” has legal requirements in many jurisdictions , the cost estimating discipline is often renamed to project controls, project management or administration.
A cost estimator, project manager, is “a technologist whose judgment and experience are utilized in the application of scientific principles and techniques to problems of estimation; cost control; business planning and management science; profitability analysis; project management; and planning and scheduling
One key objective of material take offs is to arrive at accurate cost estimates and schedules and to avoid cost overruns and schedule slips. Cost engineering goes beyond preparing cost estimates and schedules by helping manage resources and supporting assessment and decision making. “The discipline of ‘estimating’ can be considered to encompass a wide range of cost-related aspects of technologies and program management, but in particular cost estimating,cost analysis/cost assessment, design-to-cost, schedule analysis/planning and risk assessment.” The broad array of cost management & estimating topics represent the intersection of the fields of project management, business management, and other administrative systems. Most people have a limited view of what estimating encompasses. The most obvious perception is that estimating does not addresses technical issues such as the physical design of a structure or system. However, beyond the physical manifestation of a design of a structure or system (for example, a building), there are other dimensions to consider such as the money, time, and other resources that were invested in the creation of the building. Estimators refer to these investments collectively as “costs”.
It recognizes and focuses on the relationships between the physical and cost dimensions of whatever is being “designed and manufactured”. Cost estimating is most often taught at universities as part of construction , management, manufacturing, and related curricula because it is most often practiced on manufacturing and construction capital projects. Economics is a core skill and knowledge area of a estimator.
Associations, considered non-profits organizations–one example, is AACE International “is dedicated to the tenets of furthering the concepts of Total Cost Management. Total Cost Management is the effective application of professional and technical expertise to plan and control resources, costs, profitability and risk. Simply stated, it is a systematic approach to managing cost throughout the life cycle of any enterprise, program, facility, project, product or service. This is accomplished through the application of cost engineering and cost management principles, proven methodologies and the latest technology in support of the management process. … Total Cost Management is that area of practice where judgment and experience are utilized in the application of scientific principles and techniques to problems of business and program planning; cost estimating; economic and financial analysis; program and project management; planning and scheduling; and cost and schedule performance measurement and change control. In summary, the list of practice areas … are collectively called cost estimating; while the “process” through which these practices are applied is called total cost management or TCM
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