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This article outlines the processes involved in managing project cost, processes that include estimating and forecasting project cost, budgeting project cost, controlling project costs, and using special costing techniques.
5.1 PURPOSE The purpose of this chapter is to develop a conceptual layout for a new headworks facility and estimate the overall capital cost using the conceptual layout.
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A discussion of the capital cost estimating criteria, primarily concerning major equipment cost and utilization factors, is provided in Section 2.3.
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A cost estimate is the approximation of the cost of a program, project, or operation.The cost estimate is the product of the cost estimating process. The cost estimate has a single total value and may have identifiable component values.
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Overview of Cost Estimating . Cost estimating is the practice of forecasting the cost of completing a project with a defined scope. It is the primary element of project cost management, a knowledge area that involves planning, monitoring, and controlling a project's monetary costs.
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Project Management Body of Knowledge (PMBOK), cost estimation is the iterative process of developing an approximation of the monetary resources needed to complete project activities. Project teams should estimate costs for all resources that will be charged to the project.
A project budget is a detailed, time-phased estimate of all resource costs for your project. You typically develop a budget in stages — from an initial rough estimate to a detailed estimate to a completed, approved project budget.
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