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Cost estimating and budgeting
Published in John M. Nicholas, Herman Steyn, Project Management for Engineering, Business and Technology, 2020
John M. Nicholas, Herman Steyn
Estimating project costs can be difficult because the estimation process begins during project conception and before much is known about the project. The less well defined the project, the more difficult it is to estimate the costs and the greater the chances they will substantially differ from actual costs. As a rule, the estimate will be too low and the project will suffer a cost overrun. The amount by which actual costs grow to exceed initial estimates is referred to as cost escalation. Some escalation is normal, and up to 20 percent is common. Usually, the larger and more complex the project, the greater the potential for escalation. The costs of cutting-edge technology and research projects frequently escalate upwards of several hundred percent. The Concorde supersonic airliner exceeded the original estimate by a factor of five, nuclear power plants often exceed estimates by a factor of two or three, and NASA spacecraft sometimes by a factor of four to five.
Planning, Project Cost Estimation, and the Future of Small Hydropower (SHP): Large Hydro and Its Various Schemes and Components
Published in Suchintya Kumar Sur, A Practical Guide to Construction of Hydropower Facilities, 2019
Escalation of cost: Escalation is a provision being kept in the estimate for an increase of price over time. It is used to estimate the future cost of the project. Construction of a hydel project consumes more time. During construction, the price of labor, materials, POL (Petrol, Oil, Lubricant) and essential commodities become elevated. This elevated price shall be calculated as per the price index issued by the authority and is to be considered in the cost of the project by establishing a relationship between the previous price and current one through approved formulae for various commodities.
Conception of Fail-Safe Supply Networks
Published in Shabnam Rezapour, Amirhossein Khosrojerdi, Golnoosh Rasoulifar, Janet K. Allen, Jitesh H. Panchal, Ramakrishnan S. Srinivasan, Jeffrey D. Tew, Farrokh Mistree, Architecting Fail-Safe Supply Networks, 2018
Shabnam Rezapour, Amirhossein Khosrojerdi, Golnoosh Rasoulifar, Janet K. Allen, Jitesh H. Panchal, Ramakrishnan S. Srinivasan, Jeffrey D. Tew, Farrokh Mistree
Escalating costs: inventory, transportation, penalties: Significant cost escalation can affect competitiveness and profits. Costs across the supply network, for inventory, transportation, and penalties, must be closely monitored to ensure successful operations (Baghalian et al. 2013).
Life cycle cost and energy assessment of a 3.4 kWp rooftop solar photovoltaic system in India
Published in International Journal of Ambient Energy, 2022
Sonali Goel, Renu Sharma, Bibekananda Jena
Cost escalation means an item or service becomes costlier in future. Annual escalation rates may vary from 5–10% and 3–8% for fuel and non-fuel items, respectively Bhuiyan et al. (2000). LCC analysis by the constant dollar method is preferred in NIST Handbook 135 as it is easier because the rate of inflation from year to year over the entire study period need not be estimated again and again due to variation of dollar values (Fuller and Petersen 1996). The researcher has to take the dollar value of a reference date and all future amounts are expressed in dollars with the same value.