Estimation
Estimation is the process of predicting the quantity and cost of materials, labor, and other resources required for a construction project.
- Types of Estimates:
- Preliminary Estimate: Approximate cost based on project concept and scale.
- Plinth Area Estimate: Based on the covered area and rate per square meter.
- Detailed Estimate: Comprehensive and itemized, with quantities of all materials, labor, and contingencies.
- Revised Estimate: Prepared when there are significant deviations from the original estimate.
- Steps in Estimation:
- Study the drawings and specifications.
- Break the project into measurable components.
- Determine unit rates and quantities.
- Include contingencies, overheads, and profit.
Costing
Costing involves determining the actual expenses required to execute a project. It includes:
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Components of Costing:
- Direct Costs: Materials, labor, machinery, etc.
- Indirect Costs: Site office expenses, supervision, utilities, etc.
- Contingencies: Unforeseen expenses, usually 5–10% of the total cost.
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Methods of Costing:
- Unit Cost Method: Cost per unit of output.
- Elemental Costing: Costs divided by project elements (e.g., foundation, walls).
Valuation
Valuation assesses the current or projected market value of a property or asset. It is crucial for buying, selling, and taxation purposes.
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Purpose of Valuation:
- Determining sale/purchase price.
- Tax assessment.
- Insurance claims.
- Loan collateral.
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Valuation Methods:
- Replacement Cost Method: Based on the cost to rebuild the structure.
- Depreciation Method: Considers wear and tear over time.
- Market Value Method: Based on prevailing market rates.
- Rental Method: Valuation based on expected rental income.
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Factors Affecting Valuation:
- Location.
- Type of property.
- Age and condition.
- Market demand.
Key Concepts
- Bill of Quantities (BOQ): Itemized list of materials and services with corresponding costs.
- Rate Analysis: Detailed calculation of rates for each item based on materials, labor, and machinery.
- Depreciation: Reduction in asset value due to usage, age, or obsolescence.
- Salvage Value: Residual value of a structure or material after its useful life.
- Teacher: Admin User