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ENGR 3360U Winter 2014

Unit 3.4-5

Engineering Costs and Cost Estimating

Dr. J. Michael Bennett, P. Eng., PMP,

UOIT,

Version 2014-I-01

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Unit 3 Engineering Costs and Cost Estimating

Change Record

2014-I-01 Initia Creation

!e"t re#erence Cha$ter 2

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3.4 Estimating 'odes

) *er-Unit 'ode + Uses a $er-,nit #actor e.g. cost $er s/,are #oot

) egmenting 'ode

+ &iide and Con/,er a$$roach + Indiid,a com$onent estimates are added together

) Cost Inde"es

+ istorica change in costs as a ratio reationshi$


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E"am$e ,sing Inde"es

7 8,iding cost 95.25' to 8,id in 2000. !he

Constr,ction Cost Inde" then :as 3;46. In 2010 it

:as 5260.

a :hat is the 2010 estimate<5.255360=3;46 > ;.5'

8 :hat :o,d it 8e #or 2016<

Estimate # the ann,a ? increase # > 5360=3;461=10 -1 > 3.45?

E!15 > 5.251.03515 > @.;3'

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Estimating 'odes contd.

) A!riang,ation + 7$$roaching the estimate #rom di##erent $ers$ecties and so,rces + Using di##erent so,rces to arrie at the estimate


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Cost Ca$acitB E/,ations

CERs ,se design aria8es to $redict costs.

CERs are more /,antitatie in nat,re than cost inde"es.

&eeo$ed #rom statistica a$$roachesUs,aB inear or non-inear regression modes.

7 common modeCost-Capacity Equation or CCE


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CCEs cont..

7 mode that reates the cost o# an asset or

actiitB to its ca$acitB.

Dther names*o:er-a: or

iing modes.

7ss,me t:o di##erent ca$acitB eesCa$acitB ee F1

Ca$acitB ee F2

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Cost Ca$acitB E/,ations

CCE is

Where x is the

correlating exponent

NormaB 0 x 1.

Hor x 1 the economies o#scae are a$$ied.

Hor x > 1 the mode is inear.Hor x 1 a arger sie ise"$ected to 8e more costBthan a inear mode.

I# x is ,nJno:n common toass,me a a,e o# 0.6

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am$e E"$onents

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Component sizeexpone

nt

Activated sludge plant 1-100MGD 0.84

aerobic digester 0.-40 MGD 0.!4

"lo#er 1000-$000 %t&min 0.4'

centri%uge 40-'0 in 0.$1

c(lorine plant000-)0000 tons per*ear 0.44

clari+er -100 MGD 0.,8

compressor !00-!100 (p 0.,1

c*clone separator !0-8000 cu%t&min 0.'4dr*er 1)-400 s%t 0.$1

+lter sand/ 0.)-!00 MGD 0.8!

(eat exc(anger )00-000 s%t 0.))

(*drogen plant )00-!0000 c%d 0.)'

laborator* 0.0)-)0 MGD 1.0!

lagoon aerated 0.0)-)0 MGD 1.1reactor )0-400 al 0.$4

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Com8ining CCEs :ith Inde" a,es

Com8ining the cost-inde" a$$roach :ith CCEsadd the time adL,stment #actor to 8etter estimate

costs that change oer time.

$eci#icaB C2 > C1F2=F1 x

It=I0

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E"am$e

!he tota design and constr,ction o# a ne:

aero8ic digester to hande a #o: o# 0.5

'G& :as 91.;' in 2000. Estimate the cost

todaB #or a #o: rate o# 2.0 'G&. !he costinde" in 2000 :as 131 and todaB 225. !he

e"$onent #or 0.2 to 40 'G& >0.24

C > 1;000002.0=0.50.24225=131 > 35461;@

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Mi#e-CBce Costs

) Goods and serices are designed and $rogress thro,gh a i#e-cBce.

) Mi#e-cBce costing + Considers the costs oer the entire i#e-cBce

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Estimating (ene#its

) Economic anaBsis o#ten re/,iresconsidering the 8ene#its as :e as the

costs.

) 'anB o# the same methods ,sed tocac,ate costs can 8e ,sed to cac,ate

8ene#its.

) (ene#its are tB$icaB in the #,t,re :hichsometimes maJes them more di##ic,t to

estimate.

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Cash Ho: &iagrams

) Costs and (ene#its oer time can 8e re$resented 8B a cash#o: diagram

) Cash #o:s are ass,med to occ,r at the end o# each $eriod.

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3.5 D8serations on Engineering Estimation

(acJ-o#-the-eneo$e

Ain-the-8a$arJ estimates

Reisit the chess8oard and :heat

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R,es o# !h,m8s

'B UnceOs e"am$e

!he R,e o# 3

!he (acJ o# the Eneo$e

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!he R,e o# i"

normaB ,se the aerage

the WCP4"ECP(C = 6 is 8etter

&est > WC-(C=6 8e reaistic #actor in time o# Bear

i 3 i i C d C i i

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!he R,e o# 3

3 $eo$e in mB ho,se

30 cose neigh8o,rs

300 on mB Logging ro,te

3000 in mB schoo dra:

30000 in mB :ard

300000 in Mondon

6000000 in Dntario-!oronto

30000000 in Canada

300000000 in N7 - 'e"ico

3000000000 Qcons,mersQ in the :ord

U i 3 E i i C d C E i i

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R,es o# !h,m8s Lon 8enteB

o: m,ch :ater #o:s o,t o# the

'ississi$$i Rier in one daB c, mies<

U i 3 E i i C d C E i i

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R,e o# ;2

E"$onentia are di##ic,t

'ost o# o,r $ro8ems 7RE e"$os

I# Bo, inest a s,m that m,st do,8e in yBears at an interest rate o# r $ercent=Br then

r*y > ;2 hods. RUME DH ;2

E"am$e ho: ong :i it taJe #or 91000 todo,8e at 6?< ;2=6>12 Bears 92012

U it 3 E i i C t d C t E ti ti

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R,es o# 2

210 > 1024 or a8o,t a 1000

220 > a8o,t a miion

230

> a 8iion240> a triion


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E"am$e

7 $rogram taJes 10 seconds #or sie n>40

Increasing n 8B 1 increases time 8B 12?

e"$oR,e-o#-;2 saBs R! do,8es :hen n

increases 8B 6

(B 60 then 1000(B 160 10; seconds


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e$

o: (IG is 10; anB:aB<

7ct,aB 3.155"10; seconds in a Bear

Dr π seconds in a nanocent,rB264 > 100000000 don,ts=sec #or 5000

Bears


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7 Mitte F,i thanJs Son

gie 1P4P1 con#idence imits1. Canadian $o$,ation San 120012. Tear o# Na$oeonOs 8irth

3. Mength o# the Great MaJes=t Ma:rence:atershed

4. 'a"im,m taJeo## :eight o# a ;4; $ds

5. 'ass o# the earth6. N,m8er o# Hathers o# Con#ederation


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;. Matit,de o# Mondon Engand

@. N,m8er o# air$anes in the air at this

min,teK. N,m8er o# *Cs in Canada

10. N,m8er o# 8ones in the ad,t h,man


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Wisdom o# Cro:ds

E"am$e #rom 8ooJ #a #airs

o: manB dogs are there in Canada<

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Genera Estimating cont..

maJe s,re Bo, hae a com$ete DW

tatement o# WorJ

:orJ o,t the W( WorJ (reaJdo:ntr,ct,re com$eteB

hand o## to the $erson res$onsi8e to

estimate and costcoect them in the *reiminarB *an


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Genera Estimating cont..

WBSLevelWBSDescriptionLowRisk%HighRisk1 Progra! "# $#-1002 Pro%ect 20 #0-$0

3 Tas& 10 20-"04 '()tas& # 10-1#5 *or&+ac&age2 #-10

Esti!ation e+ens on is&


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ome E"am$es o# *it#as

misinter$retation o# DW

sco$e omissions

im$ro$erB de#ined sco$e

8ad sched,e

inacc,rate W(

missing sJisets

missed risJs

in#ation


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!hings to 7oid

:arm #,ies

too-ne: technoogies

8iggiestoo-o$timistic estimates

MINE7RI!T


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Summary

+ !here are manB tB$es o# costs) !hese inc,de c,rrent costs #,t,re costs and

#oregone costs

) Costs #or design and $rod,ction #oo: a i#e-cBce

+ Estimates) Cost and 8ene#it estimates

) Estimate modes can 8e a$$ied

) Estimates re/,ire reso,rces and so,rces to $rod,ce + Cash Ho: &iagrams

) Re$resent Pe and +e #o:s oer time

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3360 Unit 03.2 2014-I-01

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