Cost Estimating Approaches - 6

Detailed estimate: basic equation

• $ = Q x p

  • Where

    $ = Computed cost of the activity or element
    
    Q = Quantity involved, number of units
    p = Price of each unit

  • Developed at lowest level of WBS, and summarized
  • Detailed estimating is still subject to judgment

    • Of both quantity and unit pricing
  • Labor items are subject to "learning curve" effects and wage negotiations
  • Materials and equipment may be subject to escalation or inflation

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