Is there any other estimating method beside first principal estimating and unit price estimating that can saves time and with effective result?

A member from Estimators, Quantity Surveyors and Cost Engineers Forum at LinkedIn asked the above question. Below is my answer:

Hi Jodi,

Basically, there are 2 types of estimating methods, the first one is deterministic method, and the second one is stochastic method. The deterministic method sometime is called first principle or detail estimate. It is based on detailed unit cost and detail take-off (i.e. BOQ) of a certain scope. The detailed unit cost is mostly calculated based on combination of suppliers’ and sub-contractors’ quotations; and detail resources (labour and equipments) requirement. This method can produce a very high level of accuracy.

Selecting the Right Distribution

1. Problem Definition
A switchroom is one of the biggest non electrical components in a substation. Based on the information received on several tender submissions, a table which indicate the percentage of design work cost compare to total project cost is developed. The table is shown in Table 1.

To properly use this set of data for estimating purpose, one need to identify what type of probability distribution may fit with the data. This distribution later may be used to calculate the contingency fund.

Selection of Solar Photovoltaic System Based on Payback Period

1. Problem Definition

In this blog I am going to do find out the Payback Period for my PV installation, based on the data that I had used for my W4 Blog. With this Blog, I also would like to use this blog to claim for Problem Solving Work for Engineering Economic Chapter 5 Evaluating a Single Project.

The Payback Period Method calculates the number of year for the cash inflow to just equal to the cast out flow. The Simple Payback Period calculation, which ignores the time value of money, is based on the following formula:

                                    (1-1)

R_k = excess of revenue over expenditure in period k;

E_k = excess of expenditure over revenue in period k;

Ɵ = payback period

I = capital investment at k=0

For Discounted payback Period calculation, which considers the time value of money, the calculation is based on the following equation:

                                (1-2)

Ɵ’ = discounted payback period

i% = MARR

Selection of Solar Photovoltaic System Based on External Rate of Return (ERR)

1. Problem Definition

In this blog I am going to do find out the External Rate of Return for my PV installation, based on the data that I had used for my W4 Blog. With this Blog, I also would like to use this blog to claim for Problem Solving Work for Engineering Economic Chapter 5 Evaluating a Single Project.

The ERR calculation is based on the following formula:

(1-1)

R_k = excess of revenue over expenditure in period k;

E_k = excess of expenditure over revenue in period k;

N = project life

ϵ = external reinvestment rate per period

i’% = ERR

Based on equation 1-1, the following formula is developed:

                (1-2)

                                (1-3)

Multiattributes Decision – Analytic Hierarchy Process Method– Selecting Solution for Network Issues

1. Problem Definition

In previous blogs, I use Non Compensatory Model, Compensatory Model, and Full Analytical Criteria Method as decision making tools, to make decision on selecting a project to fix a network issue. In this blog I will use Analytic Hierarchy Process as decision making tool. I am also going to use the same problem as in blog Week 6[7].

Analytic Hierarchy Process is a tool which has been introduced by Thomas L. Saaty in the early 1980s[4]. It based on methodology where the problem is decomposed into hierarchy of criteria and alternatives (options). The information is then synthesized to determine relative ranking of alternatives/options. Both qualitative and quantitative information can be compared using informed judgements to derive weights and priorities

Multiattributes Decision – Full Analytical Criteria Method – Selecting Solution for Network Issues

1. Problem Definition

In previous blog, I use Non Compensatory Model and Compensatory Model as decision making tools, to make decision on what project should be carried out to fix a transmission network issue. In this blog I am using Full Analytical Criteria Method for my decision making selection process using the problem in blog week 6.

Multiattributes Decision Compensatory Model – Selecting Solution for Network Issues

1. Problem Definition

In previous blog, I use Non Compensatory Model to make decision on selecting a project to fix a network issue. In this blog I will use Compensatory Model for my decision making selection process using the same problem as per in blog week 6. I also would like to use this blog to claim for Problem Solving Work for Engineering Economic Chapter 14 Decision Making Considering Multiattributes.

Non Compensatory Decision Making – Selecting Transmission Projects

1. Problem Recognition, Definition and Evaluation

The electricity load in Onyx Suburb, close to Blackberry Substation is increasing. To deal with the increasing load, electricity supply in Onyx Suburb needs to be increased. I also would like to use this blog to claim for Problem Solving Work for Engineering Economic Chapter 14 Decision making Considering Multiattributes.

Selection of Parametric Estimation Techniques for Estimating the Cost of a Switchroom

This blog is written to claim Problem Solving Work from Engineering Economy, Chapter 3 Cost-Estimation Techniques.

1. Problem Recognition, Definition and Evaluation
A switchroom is one of the big non electrical construction components in a substation. The switchroom cost is usually estimated using the following formula:

Switchroom estimate = a x [Area], where a= swichroom estimate unit rate

Here we try to find a formula to estimate a switchroom cost.

Selection of Solar Photovoltaic System Based on IRR, WACC, and MARR

1. Problem Recognition, Definition and Evaluation

With increasing electricity rate, I am planning to install a photovoltaic solar panels system on my house. I want to investigate which PV arrangement will provide me with a good investment.
For that I use the tool mentioned in Engineering Economy Engineering Book, chapter 5, Introducing Concept of Minimum Attractive Rate of Return (MARR) and Internal Rate of Return (IRR), page
178-211,

The electricity price increases is shown at Table 1.

Year	Increase Per Year (%)
2010
2011	0.05
2012	0.035
2013	0.04

Table 1. Increase of electricity from 2010 until 2013