Cost Modelling (practice)

Learning outcomes

– to identify the methods and current

practices of cost modelling

adopted in construction projects

Cost models (summery)

Designer’s model

• Design optimisation

• Tender prediction

• Cash flow forecast

• Whole life cost model

Constructor’s model

• Cash flow forecast

• Resource based model

Cost modelling methods

• Traditional methods

• Empirical methods

• Algorithmic methods

• Simulation methods

• Heuristics methods

• Combined/hybrid methods

Traditional cost models

Single rate methods

Multi rate methods

Analytical methods

Product

based

Process

based

1. Unit method

Standard unit of

accommodation Approximate

cost per unit X

• Schools, universities, colleges - per student

• Hotels, hospitals - per bed

• Restaurants, cinemas - per seat

• Car parks - per car

Eg: Unit method

• Hospital of 640 beds

• Cost per bed (adjusted rate) = £16,000

Total estimated cost = 640 x £16,000

= £10,240,000

Need adjustments for location, site condition, market condition, and inflation

2. Superficial area method

Gross Internal

Floor Area

Cost per m2 of

GIFA X

• Most frequent method for preparing early

cost estimates

• Can be applied to all types of buildings

• Project of 852 m2 (GIFA)

• Cost per m2 of GIFA = £1,106

Total estimated cost = 852 x £1,106

= £942,312.00

Eg: Superficial area method

3. Cube method

Gross volume of

the building

Cost per m3 X

• There is a standard set of rules to

calculate the building volume

(External plan area X height)

Cube method (rules)

• Measured from external faces of external walls

• Height of the building is taken from the top of

foundation to

- For pitched roof

A point midway between the ceiling and the apex of roof 2/3 where roof

space is un-occupied

A point 3/4 from the ceiling to the apex of the roof where roof space is

occupied

- For Flat roof

A point 610mm (2 feet) above the roof structure

4. Storey-enclosure method

Storey-enclosure

area

Cost per m2 of

enclosure area X

• Consider building morphology in estimating

• There are standard rules to calculate the enclosure area

• Building enclosure areas: floors, external walls and roof

• Each area is then multiplied by an appropriate weighting factor

– Floor areas, measured from the internal face of external walls: basements x 3; ground floor x 2; first floor x 2.15; second floor x 2.30 and add 0.15 for each successive floor

– Roof areas, measured in its plan projection, to the extremities of eaves: roof x 1

– External wall areas, measured on the external face of the walls: basement wall area x 2; above ground level (without any deduction for openings x1.

Storey-enclosure method (rules)

Eg. Storey-enclosure units

5. Approximate quantities method

Composite elemental cost per m2 of GIFA

GIFA X

• In practice, only the major items are

measured

• Represent composite items

• Uses actual construction rates for each

group of related items

Eg: Approximate quantities method cont..

Cost range

6. Elemental estimating method

• More associates with cost planning and

controlling

• Cost per m2 of BCIS elements

• Cost per m2 of GIFA

• Element Unit rate

• Total element cost

Element unit rate Element unit

quantity X Ʃ

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Case study: King Alfred mixed use

scheme : London

Process based cost model

(Contractor’s)

• Calculate the cost of activity

/process

• Costs of construction (labour,

material, plant, subcontractors) are

established and to which an

allowance for overhead and profit is

added.

Factors to be considered when

selecting a cost model

• Information and time available

• Experience of the estimator/quantity

surveyor

• The amount and form of cost data

• Purpose of the model

• Techniques to be adopted

Conclusions

• Traditional types of cost model were, in

general, still the most widely used.

• The newer, only the resource based

model, and life life-cycle cost model

costs being in general use.

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Any questions?

Next lecture : Whole life costing (theory)

Thank You