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Cost Estimation Essay

765 Words4 Pages

Purpose of Cost Estimate

Malaysia is one of the development countries and is in the process of rapidly developing. Construction industry in Malaysia is an indicator in creating wealth and promoting a feature of life for Malaysians through the transformation of government’s socio-economic policies into social and economic infrastructure and buildings. Furthermore, construction industry also serve many job opportunities for communities. In construction industry, it is important to have estimation on cost performance of projects to ensure the construction cost is within the owner’s budget for the project.
In the construction industry process, estimation provides a number numerous of functions. Basically, it is to serve an indication of the probable …show more content…

According to Pratt et al. (2004) estimates are also required after works starts on the project. In the cost control programs, estimating is required to assist the control of expenditure of founds on a project. Peurifoy et al. (2002) clarified that the estimator and his or her team play an important role in preparing estimations whether using computers or not. The computer can assist during the activities process, but the estimator need to know their role and responsibility to manage and to control the estimating process. As an estimator, he or she is expected to carry out tasks for example thoroughly examine tender documents, attend a site visit, prepares methods statement and tender program, develop conceptual estimates and make inquiries and receive quotations based on production rates for materials, plant and subcontractors. The estimator also must review and check all parts of an estimate to ensure the relevant cost of particular project besides document the estimate, so that it will be used for cost control purposes.
3) Comparing – This uses the estimate as a basis for the evaluation of different design solution. According to Holm (2005), the design team need to consider alternative building system or components to be evaluate. Costs estimates for each system or component under consideration usually are prepared to assess the cost impacts of the alternatives being …show more content…

In addition, according to Akintoye and Fitzgerald (2000), they clarified that the function of cost within firms are used primarily to prepare tenders for clients, monitor project execution and audit project success. The data from 84 various type of firms were collected randomly, they prescibe main use of cost estimation is for tender sum preparation in response to an invitation to bid by construction clients. They also said that the function of cost estimation is an essential element in the contractors bidding process as its serves a basis for the contractor to submit a tender sum for a

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