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Cost Modelling (practice)
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Learning outcomes
– to identify the methods and current
practices of cost modelling
adopted in construction projects
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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
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Traditional cost models
Single rate methods
Multi rate methods
Analytical methods
Product
based
Process
based
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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
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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
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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
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• 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
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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)
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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
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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
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• 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)
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Eg. Storey-enclosure units
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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
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Eg: Approximate quantities method cont..
Cost range
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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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17
Case study: King Alfred mixed use
scheme : London
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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.
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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
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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