COMPUTER COST

MODELLING
PREPARED BY:
MADAM KUMALASARI KIPLI
 Course Contents

► Course Objectives
► Introduction
► Empirical Method
► Regression Analysis
► Simulation Method
 Course Objectives

At the end of the topic, students should be able to:

❑ Understand different type of computer cost modelling
❑ The application of each computer cos modelling
❑ Appreciate the importance of each computer cost modelling
available
 Introduction

► Deciding the purpose of cost model will affect its form and the variable which will be
incorporated within it. Wilson (1984) suggested these significant importance:
(1) Design optimisation models
– value for money in building – life cycle costing facets
- cost planning process
(1) Tender price prediction models
- forecast tender sum obtained from a contractor
- take cognisance of the contractor’s estimating variability
- Factors influencing market price
 EMPIRICAL METHODS

• They have been used and

developed largely on the Application
Observation basis of ‘right feel’.

Limitation of
Model based thinking towards
on: common sense

Intuition Experience Presentation Understanding

 Example of Empirical Method

• Example: Bills of Quantities (BQ)

• Physical appearance of the building and methods used for construction have been modelled in
terms of descriptions and dimensions.
• Over a period of time the process has been continually refined, with an attempt to try relate
quantity with cost more realistically.
• In UK, SMM7, for example->relate cost and the way surveyors measure building work. With the
aims to simplify the method, while maintaining or improving the level accuracy.
• At that moment do not really take into account complex plan shapes/large number of storeys.
• Estimator rely on information being made available visually by way of drawings.
Example of Empirical Method

• Example: Bills of Quantities (BQ)

• Easy to see the quantities and costs in these terms. For example, the price of concrete in a
floor slab can be obtained from the expression:
LxWxDxR=P
• Where L = length on plan,
W = width on plan,
D = thickness of concrete
R = Measured rate for
concrete in cubic metres
P = Price of floor slab
 Advantage of Empirical Method

► Easy to understand
► Can be related quickly to the construction project.
► Majority of people at management level in the
construction industry are familiar with the
documents and are able to use them for a variety
of purposes.
 REGRESSION ANALYSIS

► Technique that will find a formula or mathematical model which best describe data
collected.
► Relationship between variables are not unique, in the sense that a particular value of
one variable always corresponds to the same value of the other variables.
► Simple linear regression – statistical technique attempts to quantify the relationship
between two variables.
► Multiple linear regression – relate three or more variables.
 Application of Regression Analysis

► In construction, the regression analysis can be

used to see the relation between workers output
with relation to working hours. For example in
bricklaying works, plastering works.
Example of Regression Analysis
 SIMULATION METHOD

• Dictionary describe simulation as imitation. Pretending

to be so, but just how good a pretence it is will depend
on the skills of the model-builder.
• A simulation model seeks to duplicate the behaviour of
the system under investigation by studying the
interactions among its components.
• The output of a simulation model is normally presented
in terms of selected measures that reflect the
performance of the system.
 SIMULATION METHOD

The use of simulation has many possible applications within the

construction industry and in the field of project cost management.
The following are some example which deserve the attention of this
technique:
❑ Construction planning- inherent risk and uncertainty associated
with the project’s management.
❑ Construction estimating- in the area of tendering bidding and cost
forecasting which are indeterminate in practice.
❑ Whole-life costing- variableness in data such as life of materials
and components, maintenance period, interest rates and building
life.
 Example of Simulation Method

► The figure below show the cumulative distribution for

these data in the form of an ogive.
 Example of Simulation Method

► The figure below show the cumulative distribution for

these data in the form of an ogive.
 Application of Simulation Method
The distribution in simulation exercise are the centre of the
technique, since it is from these the that sampling will take place.
These distribution can be determined only from data which have
been carefully collected over a long period of time.
Sampling is a simple matter of selecting a random number by
using the number generator on the computer and relating this to
our distribution.
For example we may choose to select random number from 1 to
100, and this can easily be done in a computer.
If a random number 40 were selected, from sampling figure the
left, this would indicate an output of 1.1 m2 per hour.
Application of Simulation
Method

• The existing data can be used as

simulation to predict the cost in
future.
• The new data enter may be used to
see any changes in term of output
cost per square metre.
• The new data are based on a
proposed incentive scheme that the
site manager is anxious to introduce.
 CONCLUSION

The development of cost models and their wider application to aspects of construction
pricing do have the following advantages:
► More information can be generated so that the better-informed decision can be made.
► This information will be reliable, introducing greater confidence into the decision
making process.
► The cost information can be provided more quickly.
► Suitable cost information can be produced at an earlier stage within the design
process.
TUTORIAL