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INDIVIDUAL ASSIGNMENT
Harrisburg University of Science and Technology
PRINCIPLE OF PROJECT MANAGEMENT
PMGT 510-90-O – Fall 2023
November 04, 2023
BY
SUHAS SREEKANTASWAMY
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This analysis examines two recent peer-reviewed academic publications, both published within
the last five years, that focus on various methods of construction cost estimation discussed in
the CPM textbook section 10-2c. The two articles under scrutiny are "Integrated Cost Estimating
and Scheduling for Construction Projects" by S. O. Ogunlana et al. and "Parametric Cost
Estimating Handbook" by Paul R. Smith.
Method 1: "Parametric Cost Estimating Handbook" by Paul R. Smith is the first cost estimation
approach discussed in this paper. It employs mathematical models to predict project costs
based on specific variables and derives cost estimates from historical data. This method is
particularly valuable when there is limited information available for a project or when it closely
resembles prior projects.
Strengths:
This method is versatility allows it to be applicable for a variety of projects, making it
user-friendly.
It can provide rapid cost estimates, which is advantageous when time is a critical factor.
It assists in identifying potential cost-saving opportunities.
Weaknesses:
It does not account for external variables such as market fluctuations or unforeseen
incidents that could impact project costs.
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It may not be suitable for complex or unique tasks.
Successful Example:
The parametric cost estimation is successful in diverse construction projects, such as the
construction of bridges and highways. To illustrate, the Florida DOT utilized this approach
to estimate the expenses for the I-4 Ultimate Project, a substantial road restoration
endeavor in Florida. The method produced an estimate that closely aligned with the
actual project cost, differing by just 3 percent.
Unsuccessful Example:
An unsuccessful case is the Boston Central Artery/Tunnel project, also known as the Big
Dig. The parametric cost estimation handbook's estimate fell significantly short of the
actual project cost due to unexpected issues and market changes.
There are potential benefits for our organization in adopting the cost estimation techniques
discussed in this paper. Our organization now bases a lot of its cost prediction on expert
judgment and historical data, which isn't always reliable—especially for complicated or one-of-
a-kind projects. Utilizing the integrated cost estimating and scheduling approach or the
parametric cost estimation manual could result in more accurate and comprehensive cost
estimates. These techniques take into account a broader range of factors and provide detailed
cost breakdowns, potentially leading to better project planning and cost control.
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It's crucial to recognize, though, that putting these techniques into practice could call for more
resources and knowledge, which could present difficulties for smaller projects or teams. Team
members who are accustomed to the current practices' resistance to change could also be a
barrier. However, I firmly think that incorporating these cost prediction methods into our
workflows can improve project scheduling and cost management, which will eventually result in
more successful projects and happy stakeholders.
Method 2: "Integrated Scheduling and Cost Estimating for Building Projects" by S. O. Ogunlana
et al. is the second cost estimation technique discussed in this study. This method combines
cost estimation with scheduling to create a comprehensive project plan that considers both
time and cost aspects.
Strengths:
• By taking time and money into account, this strategy guarantees that projects are
finished on time and within budget.
It offers a deep understanding of the project and its requirements, facilitating effective
risk management.
Weaknesses:
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The development of this method can be time-consuming and complex, requiring more
resources compared to other cost estimation techniques, which could be prohibitive for
smaller projects.
Successful Example:
The Burj Khalifa construction project is a successful example where the integrated cost
estimate and scheduling method was employed.
Unsuccessful Example:
An ineffective use of this approach was observed in the Denver International Airport
(DIA) project during the 1990s, where major cost overruns and delays occurred due to
inadequate consideration of the project's complexity and specific requirements.
The parametric cost estimate manual and the integrated cost estimating and scheduling
technique each have benefits and drawbacks, and which is better for a given project will depend
on its particular needs. The nature of the project will dictate which approach is more
appropriate. For instance, the parametric cost estimation manual can provide a quick and
reasonably accurate estimate for projects similar to previous ones, integrated cost estimates
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and scheduling, on the other hand, may be more appropriate for intricate projects with special
requirements.
Implementing these techniques in our workplace can improve project management
effectiveness and enhance cost estimation accuracy. Accurate cost estimation is crucial for
resource allocation, and the integration of cost estimation with scheduling aids in identifying
and mitigating potential risks, leading to successful project outcomes. Selecting the appropriate
cost estimation method that aligns with the project's unique requirements is essential to
minimize risks and maintain project timelines.
I can suggest several ways in which the use of an integrated cost estimating and scheduling
strategy in construction projects can enhance the work environment:
On-time and On-Budget Projects: This approach can help ensure that projects are
completed on schedule and within the allocated budget, which is essential for
maintaining client satisfaction and financial success. It enables the identification of areas
where resources can be maximized and costs minimized by considering both time and
cost factors.
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Risk Management: The comprehensive overview provided by this method simplifies the
detection and management of risks. Teams can use it to identify potential issues early on
and develop plans to address them before they escalate.
Resource Allocation: The benefits offered by this method in terms of project success and
profitability often outweigh the associated costs, even if it requires more time and
resources than other cost estimation techniques.
As a result, the integrated cost estimating and scheduling method can be a useful tool for
construction project management if used correctly and with an awareness of its limitations.
REFERENCE:
Cerezo-Narváez, Alberto, et al. “Integration of Cost and Work Breakdown Structures in the
Management of Construction Projects.”
MDPI
, Multidisciplinary Digital Publishing
Institute, 19 Feb. 2020,
www.mdpi.com/2076-3417/10/4/1386
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Orlando,
Charles. “Parametric Cost Estimating.”
Galorath
, 10 July 2021,
galorath.com/parametric-cost-estimating/