Cost estimating is one of the most difficult as well as important aspect in any construction project management. This necessary part of any project is generally handled by professional estimators. As the whole estimating process is so much complex that maximum time the main concern is whether the estimation is correct or not? The answer depends on how much experience, efficiency and foresee capability the estimator possesses. All successful estimating involves a confidence interval and an error band. For example you can say that some project will be completed on or before 5th May 2012 with a 6 percent error band or there is an 85 percent probability of the program costing $320M or less with 5 percent error band.
The probabilistic forecasting of cost and schedule is the core process applied to most of the programs the estimating companies are working on. Along with it Integrated Master Schedule (IMS) is an integrated schedule containing the networked, detailed tasks necessary to ensure successful program execution. The IMS is used to verify the attainability of contract objectives, to evaluate progress toward meeting them and to integrate scheduled activities with all related components.
The estimators need to realize that all project activities consist of random variables and that estimates using those variables based on simple statistics. The common mistakes in estimating services takes place when the estimators ignore the underlying statistical basis of projects and fail to acknowledge the variables
. Similar problem can be happen if a project is scheduled in hours and the work extends for more than a few days. The estimator should have a clear understanding about the size, limitation and other things about the project. All these things along with profound experience can help an estimation to lessen the error ration and make it successful. That’s the secret of the art of good estimating.
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