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The principle behind the pool is to correlate direct and indirect costs with a specified cost driver, so to find out the total sum of expenses related to the manufacture of a product. [2] While the exact construction cost pools differs, most companies choose to form numerical based sequences that can then be allocated to the desired project.
Construction cost management is a fee-based service in which the construction manager (CM) is responsible exclusively to the owner, acting in the owner's interests at every stage of the project. The construction manager offers impartial advice on matters such as:
A Allocation of costs is the transfer of costs from one cost item to one or more other cost items. Allowance - a value in an estimate to cover the cost of known but not yet fully defined work. As-sold estimate - the estimate which matches the agreed items and price for the project scope. B Basis of estimate (BOE) - a document which describes the scope basis, pricing basis, methods ...
The work breakdown structure provides a common framework for the natural development of the overall planning and control of a contract and is the basis for dividing work into definable increments from which the statement of work can be developed and technical, schedule, cost, and labor hour reporting can be established. [75]
Cost engineering is "the engineering practice devoted to the management of project cost, involving such activities as estimating, cost control, cost forecasting, investment appraisal and risk analysis". [1] "Cost Engineers budget, plan and monitor investment projects. They seek the optimum balance between cost, quality and time requirements." [2]
An important part of standard cost accounting is a variance analysis, which breaks down the variation between actual cost and standard costs into various components (volume variation, material cost variation, labor cost variation, etc.) so managers can understand why costs were different from what was planned and take appropriate action to ...
Lean construction is a combination of operational research and practical development in design and construction with an adoption of lean manufacturing principles and practices to the end-to-end design and construction process. Lean Construction required the application of a robust programmatic framework to all repair, renovation, maintenance ...
A cost-sharing problem is defined by the following functions, where i is an agent and S is a subset of agents: Value(i) = the amount that agent i is willing to pay in order to enjoy the service. Cost(S) = the cost of serving all and only the agents in S. E.g., in the above example Cost({Alice,George})=9000.