Estimation

General

During construction project planning and implementation, we need to know the quantities and costs of various items required to meet the objective of the project. That is, construction project manager has to anticipate the cost of project. The process of calculation of quantities and costs of various items in connection with the construction project is called an “estimate”.

An estimate is prepared by first obtaining the quantity of the items required to complete the project and multiplied by unit cost of the items. Details of the estimate depend upon the purpose of carrying out estimate.

The preliminary estimate should be accurate enough to produce the cost of the project within 10% to 15% variations.

During the life cycle of a project, different parties for various reasons require an estimate. The details and method of estimations depend upon the needs and level of management decisions.
Suppose a philanthropic organization wants to start an academic institute. The organization is interested in knowing how much money is required to be spent. It can be just calculated from the experience with previous project of similar kind. Such as, 20 thousand money per student has to be invested. If academic institute is to be planned for one thousand students, 20 x 1000 thousand is required. Next level of details may be required is how much money is to be invested on different subheads, equipment, laboratories, hostels etc.