What the different methods of Preliminary estimating also known as cost planning?

Preliminary estimating, also known as cost planning, is a crucial process in project management that involves determining the approximate cost of a project. This process is ongoing and occurs throughout the entire project lifecycle. Cost planning involves identifying the scope, tasks, and resources needed to complete the project and estimating the cost of each task. There are several methods used in preliminary estimating, such as the conference method, financial methods, unit method, cube method, superficial area method, story enclosure unit method, life cycle cost analysis (LCCA), and life cycle cost management (LCCM).

The conference method of cost estimation is a systematic approach that involves using data and knowledge from the collective expertise of expert sources to make decisions about costs. This method involves bringing together a group of experts, such as architects, engineers, and construction professionals, to discuss and assess the cost of a project. The conference method allows the client to consider multiple perspectives when estimating the budget for a project, which can help to provide a more accurate estimate. This method is often used in the early stages of a project, when the design and scope of the project are still being determined. It is a useful tool for helping clients and project teams to understand the potential costs of a project and make informed decisions about the project's budget and feasibility.

Financial methods of cost estimation involve assessing the financial viability of a proposed construction project at different stages. These methods are used to help clients identify ways to finance their projects and choose the best financing options. Some common financial methods of cost estimation include:

1. Cost-Benefit Analysis: This method involves evaluating the costs and benefits of a project to determine its financial feasibility. It can help clients determine whether the benefits of the project outweigh the costs and whether the project is worth pursuing.

2. Return on Investment (ROI): This method calculates the percentage of return on investment for a project by dividing the net profit by the initial investment. It helps clients understand the potential financial return of a project and whether it is a good investment.

3. Net Present Value (NPV): This method calculates the present value of a project's future cash flows by discounting them to the present using a discount rate. It helps clients determine the value of a project in today's terms and whether it is a good investment.

4. Internal Rate of Return (IRR): This method calculates the rate of return on an investment by determining the rate at which the NPV of the investment is equal to zero. It helps clients understand the potential return on their investment and whether it is a good investment.

Financial methods of cost estimation can help clients make informed decisions about the financial feasibility of a construction project and choose the best financing options.

The unit method of cost estimation involves calculating the cost of a project by multiplying the cost per unit by the total number of units required to complete the project. This method is based on the assumption that the cost of a project is proportional to the number of units required to complete it. For example, if a construction project involves building a certain number of houses, the unit method could be used to estimate the cost by calculating the cost per house and multiplying it by the total number of houses to be built. This method is straightforward and can save time compared to other methods that may be more labor-intensive. However, the unit method may not always be accurate, as it relies on assumptions about the cost per unit that may not hold true in every case. It is often used in combination with other methods to provide a more accurate estimate of project costs.

The cube method of cost estimation is a technique used to estimate the size of a construction project. It involves measuring the volume of the project in cubic meters and using this measurement to calculate the size and cost of the project. This method is useful because it accounts for variations in story height within a construction project. For example, if a building has multiple floors of different heights, the cube method can help to accurately estimate the size and cost of the project by taking into account the different heights of the floors. To use the cube method, the construction team will need to measure the dimensions of the building or other structure and calculate the volume in cubic meters. They can then use this measurement to estimate the size and cost of the project. The cube method is often used in conjunction with other methods to provide a more accurate estimate of project costs.

The superficial area method of cost estimation is a technique used to estimate the cost of a construction project by measuring the available floor space and multiplying it by a price per square meter. This method is often used in the initial design stage of a project to calculate cost estimates for various design options.

To use the superficial area method, the construction team will need to measure the floor space of the project and determine the price per square meter. They can then multiply these two values to estimate the total cost of the project. The superficial area method is a quick and easy way to estimate the cost of a project, but it may not be as accurate as other methods that take into account more detailed information about the project. It is often used in combination with other methods to provide a more accurate estimate of project costs.

The story enclosure unit method of cost estimation is a technique used to estimate the approximate size of a construction project by multiplying the volume and weighting factor of one story. This method involves calculating the total floor area of a building by measuring the external walls, floors, and roof areas and multiplying them by an appropriate weighting factor. To use the story enclosure unit method, the construction team will need to measure the dimensions of the building and calculate the total floor area using the appropriate weighting factor. They can then use this measurement to estimate the size and cost of the project. This method is not commonly used due to the complexity of measuring and calculating the weighting factor. It may be more accurate to use other methods that take into account more detailed information about the project.

Life cycle cost analysis (LCCA) is a method of cost estimation that considers all costs associated with a construction project throughout its entire life span. This includes construction costs, operation costs, and maintenance costs. LCCA allows project teams to compare the total costs of different design options and proposals and choose the option that offers the best value over the long term.

To perform LCCA, the project team will need to identify all of the costs associated with the project, including construction materials, labor, equipment, and other expenses. They will also need to consider the costs of operating and maintaining the project over its lifetime, such as energy costs, repairs, and replacements. By considering these costs over the entire life span of the project, the team can make informed decisions about the best design option and budget for the project.

LCCA is a useful tool for helping clients make sound financial decisions about their construction projects and ensuring that they choose designs that offer the best value over the long term

Life cycle cost management (LCCM) is a method of cost estimation that focuses on predicting the life cycle cost of a construction project and ensuring that the project is managed in a way that minimizes these costs over the long term. This method involves considering not only the initial cost of the project but also the ongoing costs of operating and maintaining the project throughout its lifetime.

To perform LCCM, the project team will need to consider all of the costs associated with the project, including construction materials, labor, equipment, and other expenses. They will also need to consider the costs of operating and maintaining the project over its lifetime, such as energy costs, repairs, and replacements. By predicting the life cycle cost of the project, the team can make informed decisions about the best design options and budget for the project and manage the project in a way that minimizes these costs.

LCCM is a useful tool for helping clients make sound financial decisions about their construction projects and ensure that they are managed in a way that minimizes costs over the long term.

The process of preliminary estimating usually starts with the inception stage, where the client and project team identify the project's goals and objectives. From there, the team will create a project plan and schedule, identify the resources needed, and assess the project's feasibility. Throughout the project, the team will continuously monitor and control the cost to ensure that it stays within the estimated budget.