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CDF
Cost Curve Percentage Value Methodology
February 2024
Confidential

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CDF
Cost Curve Percentage Value Methodology
February 2024
Confidential
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Cost Curve Percentage Value Methodology

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Cost Curve Percentage Value Methodology

Contents

1 Introduction 8
1.1 CDF Tool – General Description 8
1.2 Purpose of this document 7
1.3 Auxiliar documents 8
1.4 Nomenclature adopted 8

2 OBC – FBC -Linear regression model 9

2.1 Contract dataset 9
2.2 Design Percentage for OBC-FBC 9
2.3 Linear regression model parameters for OBC-FBC 10

3 SOC - OBC -Linear regression model 9

3.1 Contract dataset 9
3.2 Appraisal Percentage for SOC-OBC 9
3.3 Linear regression model parameters for OBC - FBC 9

4 Total Construction Estimate Value 11

4.1 Total Construction Estimate Value - Description 11
4.1.1 Inflation 11
4.1.2 Construction Risk Contingency 11
4.1.3 Optimism Bias 11
4.2 Total Construction Estimate Value - Calculation 12

5 Cost Curve Percentage Value 12

5.1 Cost Curve Percentage Value - Description 13
5.1.1 Consultancy Appraisal 13
5.1.2 Consultancy Design 14

6 Summary 15
6.1.1 Diagram 15
6.1.2 Diagram2 15
6.1.3 Diagram3 15

Tables
Table 1 16

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Cost Curve Percentage Value Methodology

Figures
Figure 1.1: <Insert Figure Caption> 1
Figure 3.3 - Chess Flood Spatial Analysis March 2001 (a) Scenario 1 v RA; (b) Scenario 2
v RA; (c) Scenario 3 v FL; (d) Scenario 4 v FL 15

Photos
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Maps
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Charts
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Tables – Appendices
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Figures – Appendices
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Photos – Appendices
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Maps – Appendices
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Charts – Appendices
No table of figures entries found.

Equation CDF00 1 9
Equation CDF00 2 9
Equation CDF00 3 10
Equation CDF00 4 11
Equation CDF00 5 11
Equation CDF00 6 12
Equation CDF00 7 12
Equation CDF00 8 13

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Cost Curve Percentage Value Methodology

Equation CDF00 9 14
Equation CDF00 10 14

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Cost Curve Percentage Value Methodology Page 8 of 13

1 Introduction

1.1 CDF Tool – General Description

Team to fill this section

1.2 Background
This goal of this document is to help the users of to have a detail way of how to calculate the
Cost Curve Percentage variable. This document shows all inputs need to proceed the entire
calculation, all the mathematical expressions involved and all the steps.

This document can be used for implementation of the calculation using other applications apart
of VBA and Excel (Python, R, SQL etc)

1.3 Auxiliar documents

For better understanding of the calculation process of Cost Curve Percentage Value, other
documents in appendix can be useful:

• Mathematical Expressions
• Variable References in current Excel application
• Overview for all the variables and parameters involved in the calculations

1.4 Nomenclature adopted

The nomenclature adopted for the several variable is the following:

For the variable full names it kept the variable nomenclature stated in the excel CDF application.

The alias of the variables were based on their full names.

All the nomenclature can be change.

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Cost Curve Percentage Value Methodology Page 9 of 13

2 Linear regression model

2.1 Contract dataset for OBC-FBC and SOC-OBC

In order to produce the linear regression models for both OBC-FBC and SOC-OBC we need to
getter the following data:

a) For each OBC-FBC contact, get the Construction Value – ConstVal𝑂𝐶𝐵_FBC

b) For each SOC-OBC contact, get the Construction Value- ConstVal𝑆𝑂𝐶 _𝑂𝐶𝐵
c) For each OBC-FBC contact, get the Design Value- 𝐷𝑒𝑠Val𝑂𝐶𝐵_FBC
d) For each SOC-OBC contact, get the Design Value- 𝐷𝑒𝑠Val𝑆𝑂𝐶_𝑂𝐶𝐵

2.2 Design Percentage and Appraisal Percentage

a) For each OBC-FBC contact, calculate the Design Percentage accordingly with the
following expression:

Equation CDF00 1

DesVal𝑺𝑶𝑪𝑶𝑪𝑩
𝑨𝒑𝒓𝑷𝒆𝒓𝑺𝑶𝑪𝑶𝑪𝑩 =
ConstVal𝑺𝑶𝑪𝑶𝑪𝑩

Where:

• Apr𝑃𝑒𝑟𝑆𝑂𝐶_𝑂𝐶𝐵- Design Percentage for SOC-OBC

• 𝐷𝑒𝑠Val𝑆𝑂𝐶_𝑂𝐶𝐵- Design value for SOC-OBC
• ConstVal𝑆𝑂𝐶 _𝑂𝐶𝐵- Contruction value for SOC-OBC

b) For each SOC-OBC contract, calculate Appraisal Percentage

Equation CDF00 2

DesVal𝑶𝑩𝑪𝑭𝑩𝑪
𝑫𝒆𝒔𝑷𝒆𝒓𝑶𝑩𝑪𝑭𝑩𝑪 =
ConstVal𝑶𝑩𝑪𝑭𝑩𝑪

Where:

• 𝐷𝑒𝑠𝑃𝑒𝑟𝑶𝑩𝑪𝑭𝑩𝑪 - Design Percentage for OBC - FBC

• 𝐷𝑒𝑠Val𝑶𝑩𝑪𝑭𝑩𝑪 - Design value for OBC - FBC
• ConstVal𝑶𝑩𝑪𝑭𝑩𝑪 - Contruction value for OBC - FBC

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2.3 Linear regression model parameters

To determine the parameters for the linear regression for both OBC - FBC and the user should
go thought the following steps

a) Create a list of Apr𝑃𝑒𝑟𝑆𝑂C_𝑂𝐶𝐵 - Appraisal Percentage for SOC-OBC and

𝐷𝑒𝑠𝑃𝑒𝑟O𝐵𝐶_𝐹𝐵𝐶 - Design Percentage for OBC – FBC based on all contracts
b) Create a list of 𝐷𝑒𝑠Val𝑆𝑂𝐶_𝑂𝐶𝐵- Design value for SOC-OBC and 𝐷𝑒𝑠Val𝑂𝐵𝐶𝐹𝐵𝐶 -
Design value for OBC – FBC based on all contracts
c) Apply to the each one of the previous mentioned sets a natural logarithmic
transformation
d) Calculate Linear regression model parameters
Use a simple linear regression and the least squares method to explains the
relationship between the independent variable x in our case denoted by Per and the
dependent variable y in our case denoted by Val

y = bx + a,

in our case the parameters b and a will be referred by Exp and Coef nomenclature.
We can also calculate other statistics like residuals or errors to access the quality of our
regression. Note that those statistics will not be used for further calculations

Equation CDF00 3

𝑷𝒄𝒑𝑪𝒐𝒆𝒇𝑺𝑶𝑪𝑶𝑪𝑩 = 𝒇(𝒍𝒊𝒏𝒆𝒔𝒕(𝒍𝒏(𝑨𝒑𝒓𝑷𝒆𝒓𝑺𝑶𝑪𝑶𝑪𝑩 ) , 𝒍𝒏(𝑫𝒆𝒔𝑽𝒂𝒍𝑺𝑶𝑪𝑶𝑪𝑩 )))

𝑷𝒄𝒑𝑬𝒙𝒑𝑺𝑶𝑪𝑶𝑪𝑩 = 𝒇(𝒍𝒊𝒏𝒆𝒔𝒕(𝒍𝒏(𝑨𝒑𝒓𝑷𝒆𝒓𝑺𝑶𝑪𝑶𝑪𝑩 ) , 𝒍𝒏(𝑫𝒆𝒔𝑽𝒂𝒍𝑺𝑶𝑪𝑶𝑪𝑩 )))

𝑷𝒄𝒑𝑪𝒐𝒆𝒇𝑶𝑩𝑪𝑭𝑩𝑪 = 𝒇(𝒍𝒊𝒏𝒆𝒔𝒕(𝒍𝒏(𝑫𝒆𝒔𝑷𝒆𝒓𝑶𝑩𝑪𝑭𝑩𝑪 ) , 𝒍𝒏(𝑫𝒆𝒔𝑽𝒂𝒍𝑶𝑩𝑪𝑭𝑩𝑪 )))

𝑷𝒄𝒑𝑬𝒙𝒑𝑶𝑩𝑪𝑭𝑩𝑪 = 𝒇(𝒍𝒊𝒏𝒆𝒔𝒕(𝒍𝒏(𝑫𝒆𝒔𝑷𝒆𝒓𝑶𝑩𝑪𝑭𝑩𝑪 ) , 𝒍𝒏(𝑫𝒆𝒔𝑽𝒂𝒍𝑶𝑩𝑪𝑭𝑩𝑪 )))

Where:

• 𝑷𝒄𝒑𝑪𝒐𝒆𝒇𝑺𝑶𝑪𝑶𝑪𝑩- Power Curve Parameter coeficient for SOC - OBC

• 𝑷𝒄𝒑𝑬𝒙𝒑𝑺𝑶𝑪𝑶𝑪𝑩 - Power Curve Parameter exponential for SOC – OBC
• 𝑷𝒄𝒑𝑪𝒐𝒆𝒇𝑶𝑩𝑪𝑭𝑩𝑪 - Power Curve Parameter coeficient for OBC – FBC
• 𝑷𝒄𝒑𝑬𝒙𝒑𝑶𝑩𝑪𝑭𝑩𝑪 - Power Curve Parameter exponectial for OBC – FBC
• ln - Natutal Logatitmic transformation
• linest - linear regression model using the least square method

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Cost Curve Percentage Value Methodology Page 11 of 13

3 Total Construction Estimate Value

3.1 Total Construction Estimate Value - Description

3.1.1 Inflation
Inflation in this context can be described as

To be fill by the team

And can be calculated using the following expression:

Equation CDF00 4

inf = 𝒄𝒄𝒆𝒗 ∗ 𝑷𝒆𝒓𝒊𝒏𝒇

Where:

• ccev - Construction Cost Estimate Value

• inf - Inflation
• Perinf - percentual Inflation
ccev and Perinf are user inputs

3.1.2 Construction Risk Contingency

Construction Risk Contingency in this context can be described as

To be fill by the team

And can be calculated using the following expression:

Equation CDF00 5

crc = ( 𝒄𝒄𝒆𝒗 + 𝒊𝒏𝒇)⁡∗ 𝑷𝒆𝒓𝒄𝒓𝒄)

Where:

• ccev - Construction Cost Estimate Value

• inf – Inflation
• Percer - percentual Construction Risk Contingency
ccev and Percer are user inputs

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3.1.3 Optimism Bias

Optimism Bias in this context can be described as

To be fill by the team

And can be calculated using the following expression:

Equation CDF00 6

ob = ( 𝒄𝒄𝒆𝒗 + 𝒊𝒏𝒇 + 𝒄𝒓𝒄) ∗ 𝑷𝒆𝒓𝒐𝒃

Where:

• ob - Optimism Bias (OB)

• ccev - Construction Cost Estimate Value
• inf - Inflation
• crc - Construction Risk Contingency
• Perob - percentual Optimism Bias
ccev and Perob are user inputs

3.2 Total Construction Estimate Value - Calculation

Total Construction Estimate Value in this context can be described as

To be fill by the team

And can be calculated using the following expression:

Equation CDF00 7

Tcev = 𝒄𝒄𝒆𝒗 + 𝒊𝒏𝒇 + 𝒄𝒓𝒄 + 𝒐𝒃

Where:

• Tcev - Total Construction Estimate Value

• ccev - Construction Cost Estimate Value
• inf - Inflation
• crc - Construction Risk Contingency
• ob - Optimism Bias (OB)
• ccev and Perinf are user inputs

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4 Cost Curve Percentage Value

4.1 Cost Curve Percentage Value - Description

Total Construction Estimate Value in this context can be described as

To be fill by the team

4.1.1 Consultancy Appraisal

Consultancy Appraisal in this context can be described as

To be fill by the team

And can be calculated using the following expression:

Equation CDF00 8

𝑻𝒄𝒆𝒗 𝑷𝒄𝒑𝑬𝒙𝒑𝑺𝑶𝑪
CsAp = 𝑷𝒄𝒑𝑪𝒐𝒆𝒇𝑺𝑶𝑪𝑶𝑪𝑩 ∗ ( ) 𝑶𝑪𝑩
𝟏𝟎𝟔

Where:

• CsAp - Consultancy Apraisal

• 𝑷𝒄𝒑𝑪𝒐𝒆𝒇𝑺𝑶𝑪𝑶𝑪𝑩 - Power Curve Parameter coeficient for SOC - OBC
• Tcev - Total Construction Estimate Value
• 𝑷𝒄𝒑𝑬𝒙𝒑𝑺𝑶𝑪𝑶𝑪𝑩- Power Curve Parameter exponential for SOC – OBC

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4.1.2 Consultancy Design

Total Consultancy Design in this context can be described as

To be fill by the team

And can be calculated using the following expression:

Equation CDF00 9

𝑻𝒄𝒆𝒗 𝑷𝒄𝒑𝑬𝒙𝒑𝑶𝑩𝑪
Cs𝑫𝒔𝒈 = 𝑷𝒄𝒑𝑪𝒐𝒆𝒇𝑶𝑩𝑪𝑭𝑩𝑪 ∗ ( ) 𝑭𝑩𝑪
𝟏𝟎𝟔

Where:

• CsDsg - Consultancy Desgign

• 𝑷𝒄𝒑𝑪𝒐𝒆𝒇𝑶𝑩𝑪𝑭𝑩𝑪 - Power Curve Parameter coeficient for OBC_FBC
• Tcev - Total Construction Estimate Value
• 𝑷𝒄𝒑𝑬𝒙𝒑𝑶𝑩𝑪𝑭𝑩𝑪 - Power Curve Parameter exponential for OBC_FBC

Write description and calculations.

4.2 Cost Curve Percentage Value – Calculation

Cost Curve Percentage Value in this context can be described as

To be fill by the team

And can be calculated using the following expression:

Equation CDF00 10

CsAp⁡⁡⁡⁡if⁡⁡⁡⁡PrgStgG = SOC_OBC
CsDsg⁡⁡⁡⁡if⁡⁡⁡PrgStgG = 𝑶𝑩𝑪_𝑭𝑩𝑪
𝑪𝒄𝑷𝒗 = {
CsAp + Cs𝑫𝒔𝒈⁡⁡𝒊𝒇⁡⁡PrgStgG = ⁡SOC_FBC

Where:

• CsDsg - Consultancy Desgign

• 𝑷𝒄𝒑𝑪𝒐𝒆𝒇𝑶𝑩𝑪𝑭𝑩𝑪 - Power Curve Parameter coeficient for OBC_FBC
• Tcev - Total Construction Estimate Value
• 𝑷𝒄𝒑𝑬𝒙𝒑𝑶𝑩𝑪𝑭𝑩𝑪 - Power Curve Parameter exponential for OBC_FBC

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5 Summary

5.1.1 Diagram

Figure 5.1 - diagram

5.1.2 Diagram2

5.1.3 Diagram3

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Table 1

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Cost Curve Percentage Value Methodology Page 17 of 13

Expression Variable Name Variable Alias Location Location Range

WorkSheet
CDF00 10 Cost Curve CcPv Lot X PSC Target E54
Percentage Value Cost Estimate
Input Programme Stage PrgStgG Lot X PSC Target E50
Gateway Cost Estimate
CDF00 8 Consultancy Apraisal CsAp Sampling Test Bed J2
CDF00 9 Consultancy Design CsDsg Sampling Test Bed J3
CDF00 3.1 Power Curve PcpCoefSOCOCB SOC-OBC Calcs E3
Parameter coeficient
for SOC - OBC
CDF00 7 Total Construction Tcev Lot X PSC Target E46
Estimate Value Cost Estimate
CDF00 3.2 Power Curve PcpExpSOCOCB SOC-OBC Calcs C3
Parameter
exponential for SOC
- OBC
CDF00 3.3 Power Curve PcpCoefOBCFBC OBC-FBC Calcs E3
Parameter coeficient
for OBC_FBC
CDF00 3.4 Power Curve PcpExpOBCFBC OBC-FBC Calcs C3
Parameter
exponential for
OBC_FBC
Input Construction Cost ccev Lot X PSC Target E38
Estimate Value Cost Estimate
CDF00 4 Inflation inf Lot X PSC Target E40
Cost Estimate
CDF00 5 Construction Risk crc Lot X PSC Target E42
Contingency Cost Estimate
CDF00 6 Optimism Bias (OB) ob Lot X PSC Target E44
Cost Estimate
Input percentual Optimism Perob Lot X PSC Target F44
Bias Cost Estimate
Input percentual Percer Lot X PSC Target F42
Construction Risk Cost Estimate
Contingency
Input percentual Inflation Perinf Lot X PSC Target F40
Cost Estimate
CDF00 1 Appraisal AprPerSOCOBC SOC-OBC Appraisal Column P
Percentage for SOC- Curve Data
OBC
Input Design value for DesValSOCOBC SOC-OBC Appraisal Column N
SOC-OBC Curve Data
Input Contruction value for ConstValSOCOCB SOC-OBC Appraisal Column M
SOC-OBC Curve Data
CDF00 2 Design Percentage DesPerOBCFBC OBC-FBC Design Column P
for OBC-FBC Curve Data
Input Design value for DesValOBCFBC OBC-FBC Design Column N
OBC-FBC Curve Data

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Expression Variable Name Variable Alias Location Location Range

WorkSheet
Input Contruction value for ConstValOBCFBC OBC-FBC Design Column M
OBC-FBC Curve Data

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