Cost engineering

About: Cost engineering is a research topic. Over the lifetime, 2311 publications have been published within this topic receiving 30490 citations.

Cost & Effect: Using Integrated Cost Systems to Drive Profitability and Performance

Abstract: Preface 1. Introduction: Cost and Performance Management Systems 2. Four-Stage Model for Designing Cost and Performance Measurement Systems 3. Stage II: Standard Cost and Flexible Budgeting Systems Appendix: GPK Cost System 4. Stage III Systems for Learning and Improvement: Upgrading and Supplementing Standard Cost Systems 5. Stage III Systems for Learning and Improvement: Kaizen Costing and Pseudo-Profit Centers 6. Activity-Based Costing: Introduction Appendix: ABC Activity and Process Dictionary 7. Measuring the Cost of Resource Capacity 8. Activity-Based Management: Operational Applications Appendix: Value- and Non-Value-Added Activities 9. Strategic Activity-Based Management: Product Mix and Pricing 10. Strategic Activity-Based Management: Customers 11. Strategic Activity-Based Management: Supplier Relationships and Product Development Appendix: Target Costing 12. ABC in Service Industries 13. Extending Activity-Based Cost Systems 14. Stage IV: Integrating ABC with Enterprise-Wide Systems 15. Stage IV: Using ABC for Budgeting and Transfer Pricing Notes Index About the Authors

How common and how large are cost overruns in transport infrastructure projects

Abstract: Despite the hundreds of billions of dollars being spent on infrastructure development — from roads, rail and airports to energy extraction and power networks to the Internet — surprisingly little reliable knowledge exists about the performance of these investments in terms of actual costs, benefits and risks. This paper presents results from the first statistically significant study of cost performance in transport infrastructure projects. The sample used is the largest of its kind, covering 258 projects in 20 nations worth approximately US$90 billion (constant 1995 prices). The paper shows with overwhelming statistical significance that in terms of costs transport infrastructure projects do not perform as promised. The conclusion is tested for different project types, different geographical regions and different historical periods. Substantial cost escalation is the rule rather than the exception. For rail, average cost escalation is 45% (SD=38), for fixed links (tunnels and bridges) it is 34% (62) and for roads 20% (30). Cost escalation appears a global phenomenon, existing across 20 nations on five continents. Cost estimates have not improved and cost escalation not decreased over the past 70 years. Cost estimates used in decision-making for transport infrastructure development are highly, systematically and significantly misleading. Large cost escalations combined with large standard deviations translate into large financial risks. However, such risks are typically ignored or underplayed in decision-making, to the detriment of social and economic welfare.

Product life cycle cost analysis: State of the art review

Abstract: In an attempt to improve the design of products and reduce design changes, cost, and time to market, concurrent engineering or life cycle engineering has emerged as an effective approach to addressing these issues in today's competitive global market. As over 70% of the total life cycle cost of a product is committed at the early design stage, designers are in a position to substantially reduce the life cycle cost of the products they design, by giving due consideration to life cycle cost implications of their design decisions. Increasing recognition of cost competition has spurred the development of methodologies such as design for manufacturability, design for assembly (DFA), design for producibility, design for maintainability and design for quality, in the design for 'X' realm. Although these methodologies have for the most part proven successful in reducing cost, the design evaluation criterion in most of these methodologies is not cost. Therefore methodologies and tools are needed to directly provid...

Life cycle costing—Theory, information acquisition and application

Abstract: Especially in the last two decades of an increasingly-competitive business environment, dwindling resources and an ever-increasing need to obtain value for money in all areas of corporate activity, it has become essential that all available resources be used optimally (Griffith, J. W. and Keely, B. J., Cost Engineering, 1978, September/Octobe r, 165-168). Physical assets form the basic infrastructure of all businesses and their effective management is essential to overall success. It has thus become essential to plan and monitor assets throughout their entire life cycle, from the development/proc urement stage through to eventual disposal. Life cycle costing* is concerned with optimising value for money in the ownership of physical assets by taking into consideration all the cost factors relating to the asset during its operational life. Optimising the trade-off between those cost factors will give the minimum life cycle cost of the asset. This process involves estimation of costs on a whole life basis before making a choice to purchase an asset from the various alternatives available. Life cycle cost of an asset can, very often, be many times the initial purchase or investment cost (Hart, J. M. S., Tetrotechnology Handbook, p. 22, HMSO, London, 1978; Hysom, J. L., Journal of Property Management, 1979, 44, 332-337). It is important that management should realise the source and magnitude of lifetime costs so that effective action can subsequently be taken to control them. This approach to decision making encourages a long-term outlook to the investment decision-making process rather than attempting to save money in the short term by buying assets simply with lower initial acquisition cost. It is suggested project managers should familiarise themselves with what the approach involves, to better appreciate how they might then contribute to the enhanced quality decision making which it makes possible. © 1997 Elsevier Science Ltd and IPMA

Delay and cost overruns in Vietnam large construction projects: A comparison with other selected countries

Abstract: In-planned duration and cost at project closing are the two of criteria of successful project and successful project management. In Vietnam, regularly, construction projects have met delays and cost overruns. This research has employed a questionnaire survey to elicit the causes of this situation by interviewing 87 Vietnamese construction experts. Twenty one causes of delay and cost overruns appropriate with building and industrial construction project were inferred and ranked with respect to frequency, severity and importance indices. Spearman’s rank correlation tests showed that there are no differences in the viewpoints between three principal parties in the project. A comparison of causes of time and cost overruns was done with various selected construction industries in Asia and Africa. Factor analysis technique was applied to categorize the causes, which yielded 7 factors: Slowness and Lack of constraint; Incompetence; Design; Market and Estimate; Financial capability; Government; and Worker. These findings might encourage practitioners to focus on delay and cost overruns problem that might have existed in their present or future projects.