COST

MODELLING
BSS 512
COSTING & ESTIMATING I
 COST MODELLING

 It is a technique used to forecast or predict the estimated cost of a proposed

project.

 A new generation method of forecasting and determining the cost of proposed

project. (i.e. can be used for preparing estimates)

 It is used at all stages of design and construction process especially during early
forecasting and subsequent control of building cost

 They are statistical methods and can only really be attempted if computer-assisted

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 COST MODELLING

APPROXIMATE ESTIMATING
 Approximate estimating is the forecasting of the
probable cost of a future project before the building has
been designed in detail and contract particular
prepared. The approximate estimate or probable cost so
produced has two main purpose:
COST MODELLING
 COST MODELLING
METHOD OF APPROXIMATE
ESTIMATING

The choice of the method to be employed depends on:

 the information and time available to do the estimate
The experience of the surveyor or estimator
The amount and form of the cost data available
 COST MODELLING

UNIT METHOD
 This method is used to estimate the cost of
building whose sized depend upon the units of
accommodation e.g. number of pupils in schools,
number of beds in hospital, number of seats in
cinema, number of car spaces for car parks etc.
 COST MODELLING

UNIT METHOD
 Application :
The number of units of accommodation may be given by the
building owner or otherwise determined. This number of units is
then multiplied by the unit rate per unit accommodation to arrive at
the approximate cost of the building.
 Example :
If from the historical data, i.e. cost information of past projects, the
cost per pupil of schools is RM1,000/= and a proposed school to
accommodate 500 pupils is to be erected, then the approximate cost
of the proposed school will be RM1,000 x 500 = RM500,000, if
the proposed buildings in identical to the building whose unit rate
has been used.
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 Merit or Advantages :
a) A simple method of comparison UNIT METHOD
b) Suitable form of long term estimating for large programmes of similar
buildings where variations in individual buildings will cancel each other out
c) Provides a convenient form of stating a cost limit or budget
 Demerit or Disadvantage :
a) A very rough and inaccurate method of estimating which is used mainly to
give an overall rough figure
b) Does not take variations in plan shape, storey height etc. into account
c) Does not help architect in designing as it is difficult to forecast changes in
cost due to changes in specification, design etc.
d) Works which bear no relationship to the number of units of accommodation
like external works, lifts, piling etc need to be measured and priced
separately
 COST MODELLING

FLOOR AREA METHOD

By far the most common of the single rate methods
of approximate estimating
 Application:

The gross floor area of the proposed building is

measured within the internal faces of external
walls across all internal partitions for all floors

B
Gross floor area = (L x B) m²
L
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FLOOR AREA METHOD

The total gross floor area of the proposed building is then
multiplied by a suitable rate per m² of a similar building to
obtain the approximate cost of the proposed building
 Example :
The approximate cost of a proposed two-storey detached
house may be obtained as follows:
The total gross floor area is measured i.e. area
of ground floor and areas of first floor, say
180m². Then, the approximate cost of the
proposed two-storey is RM300.00 per m² x 180
m² = RM 54,000.00
 COST MODELLING

FLOOR AREA METHOD

The unit rate chosen must be the current rate as cost of
building fluctuates. Usually, site conditions, external works,
contract conditions, number and quality of fittings etc bear no
relation to the floor area of buildings, so the costs are usually
not included in the unit rate used and they to be allowed for
separately.

Obviously the difficulty of this method of approximate in the

choice of the suitable unit rate to be use and this calls for
experience, judgement and familiarity with the type of building
for which the estimate is required.
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 Merit or Advantages :
a) Items of cost significant are usually related more to floor area than
cubic content so this is more accurate method than either the Cubic
Content or Unit Method
b) The concept of floor area is more easily understood by the client and
also the usable and gross floor areas can be given
c) Simple and quick method of estimating
 Demerit or Disadvantage :
a) Does not take variations in plan shape, storey height or total height
into account and these factors affect the cost of building
b) Difficulty in making allowance for differing site conditions, contract
provisions, quality of materials, number and quality of fittings
c) External works, lifts, piling etc which bear no relationship with the
floor area have to be price separately
 COST MODELLING

CUBIC CONTENT METHOD

 Application

The volume of cubic content of the proposed

building measured and this volume is then
multiplied by a suitable cost per m³ of a similar
building to arrive at the estimated cost of the
proposed building. The volume of the building is
obtained as follows:

L
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CUBIC CONTENT METHOD

1/2

1/2 600 mm

H= for pitched H= for flat roof -

roof - top of top of concrete
concrete foundation to
foundation to mid H 600mm above flat
way of pitched roof or top of
roof parapet wall
G.L whichever is G.L
higher

Volume = L x W x H where L = external length

W= external width
 COST MODELLING

CUBIC CONTENT METHOD

The volume of tank rooms, porches etc have to be measured out
and added to obtain the total volume of the building, however
different parts of the building varying in use, design and
specification, should be priced at different costs. The obvious
difficulty lies in the choice of the appropriate unit rate to apply
as in the case of the floor area method.

Merit or Advantages :
a)The only merit is that this estimate can be done
quickly
 COST MODELLING

CUBIC CONTENT METHOD

 Demerit or Disadvantage :
a) A very rough and in accurate method of estimating
b) Does not take into account variations in plan shape, storey height and
number of storey
c) There is no indication of floor area, gross or usable area
d) Does not help architect in his design as it is difficult to forecast changes in
cost due to changes in specification, design etc
e) Works which bear no relationship to the volume of the building like
external works, lifts, piling etc need to be measured out and priced
separately
f) In large buildings a small variation in the cost per meter cube can be over
emphasized
 COST MODELLING

CUBIC CONTENT METHOD

 Demerit or Disadvantage :
g) It is valid only when the unit rate used is for an identical
building but no buildings are absolutely identical as the site
will definitely differ

Variation in storey height

100m 50m

H = 10m H = 20m 50m

50m

Volume = 100x50x10 = 50000m³ Volume = 50x50x20 = 50000m³

Area = 5000m² Area = 2500m²
 COST MODELLING
STOREY ENCLOSURE
METHOD
This method was introduced by a study Group of the RICS to
overcome the deficiencies of other single rate method of
estimating.

This method takes account of:

a)Shape of building – by measuring external wall areas
b)Total floor area – by measuring area of each floor
c)Vertical positioning of floor area in buildings by using
greater multiplying factors for higher floor
d)Storey height of building – by comparison of proportion of
floor and roof areas to external wall areas
e)Extra cost for basement etc. – by using greater multiplying
factors
 COST MODELLING
STOREY ENCLOSURE
METHOD
 Application:
The total storey enclosure area is measured in m² and
multiplied by the appropriate unit rate per m² off storey
enclosure area to arrive at the estimate cost.
The storey enclosure area is measured as follows :

a) Calculate the area of the lowest floor and multiply by two that
part which is above ground level and multiply by three the
part (if any) which is below ground level (dimensions to be
taken to the inner faces of external walls)

b) Calculate the area of the roof (to be measured flat in all cases
and to the extremities of the eaves)
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STOREY ENCLOSURE
METHOD
 Application
c) Measure the area of each upper floor and multiply by
two further adjust each upper floor area by multiplying
by a progressive factor of 0.15 (i.e. first floor areas will
be multiplied by 2.15, second floor area by 2.30, third
floor areas by 2.45 and so on)

d) Measure the area of external walls. The area of any

enclosing walls below ground level is multiplied by 2.
 3.00

2.75 5th Floor

x 2 if floor ABOVE GROUND. 2.60 4th Floor

2.45 3rd Floor

x3 if floor BELOW GROUND level
2.30 2nd Floor
Adjusted factor (known as Progressive
2.15 1st Floor
factor) for each storey /upper floor = +
0.15 GROUND LEVEL 2.00 

Basement 3.00

Basement 3.00
 COST MODELLING
STOREY ENCLOSURE
METHOD
To the cost so obtained the cost of the following items must be
added where applicable:

i)Site works including roads, paths, drains, service mains and external ducts
ii)The extra cost of foundations that are more expensive than which, would
normally be provided for the type of building concerned
iii)The category of works which is sometimes loosely described as
engineering comprising sanitary plumbing and cold water, hot water, central
air conditioning, electrical installation, gas, compressed air and similar
items, lifts and escalators
iv)Features not general to the structure as a whole, e.g. boiler flues, dormers,
canopies and so on
v)Circular work
 COST MODELLING
STOREY ENCLOSURE
METHOD
 Advantages
a) The method provides a speed way of estimating which
ostensibly should be more realistic than the other single rate
methods of estimating as it attempts to account for differences
in shape, size and height of buildings. Differences in the price
rates of different buildings will truly reflect differences in
specification

b) Can be used to indicate relative cost of alternative planning

solutions in the early design stage, in so far as the scheme most
economical in shape, storey height etc will be the one with the
smallest storey enclosure area
 COST MODELLING
STOREY ENCLOSURE
METHOD
 Disadvantages:

a) The storey enclosure unit rates are seldom published as buildings are
usually not analysed this way so there is not enough data from which
an appropriate unit rate may be chosen. Also a large number of
buildings would have to be analysed before price rates could be used
with assurance

b) It excludes items which can often account for a substantial proportion

of the total cost (see rules of measurement items…..(i) (ii).
 COST MODELLING
STOREY ENCLOSURE
METHOD
c) While it can provide the architect with some assistance during the design
of a building, subdivision of the estimate into elements or individual
items involves an undesirable measure of guesswork

d) The price rate, while linked to areas of the vertical and horizontal planes,
is still an abstraction to a large extent and is not capable of calculated
adjustments for differing specifications and quality standards. With
very little extra effort the measurements for various sections of the
building could be dealt with separately, thus allowing calculated and a
realistic prices to be used
 COST MODELLING
APPROXIMATE QUANTITIES
METHOD
Generally regarded as the most reliable method of approximate as it
uses a short cut method of preparing and pricing a bill of quantities.

Application:
The method consists of measuring out the quantities in preparing
bill of quantities but as the estimate has to be prepared in a relatively
short time, short cuts have to be taken. Generally these short cuts
consist of measuring composite item i.e. using one set of dimensions for
a number of items, of ignoring the smaller and labour only items, of
taking dimensions to the nearest six inches and of ignoring all but the
largest deductions. Measurements would be taken gross overall and
doors, windows, roof lights and similar items would be measured as
“extra over”.
 COST MODELLING
APPROXIMATE QUANTITIES
METHOD
The pricing of the composite items is based on current prices of measured
rates plus an addition to cover the items not specifically measured.
Preliminaries and contingencies are treated as a percentage addition to
the total.

The data required are:

a) Sketch plans or preliminary working drawings
b) Specification notes, if details are not provided they have to be assumed
c) Current prices of measured rates which are usually obtained from
priced bills of quantities or from the analysis of prices whenever
necessary
 COST MODELLING
APPROXIMATE QUANTITIES
METHOD
 Example:

Example per m² : RM
 100mm hardcore 9.50
 50mm sand 2.50
 Polythene 2.80
 150mm concrete @ RM125/m³ 18.75
 F42 steel fabric 4.25
 50mm screed 4.00

Total cost per square metre 41.80

 COST MODELLING
APPROXIMATE QUANTITIES
METHOD
 Advantages :
a) It is most reliable method of estimating provided drawings and
specification are available, as the dimensions can be related to an
actual design and the prices related to a proposed specification for
each element of the building
b) It allows an estimate to be subdivided into elements or individual
items and can assist the architect during the design of a building
c) It facilitates discussion of the estimate with the client
d) Adjustments to the estimate can be made to allow for differences
in shape, size, height, etc and for changes in specification
 COST MODELLING
APPROXIMATE QUANTITIES QUANTITIES
METHOD
 Disadvantages:

a) It often requires a considerable amount of time to prepare an

estimate
b) Gross measurements if used make subdivision into elements
difficult
c) It requires a detailed specification and this tends to restrict its
use to a stage when the design is well advanced
d) It tends to be inappropriate to work which is not measured in a
bill of quantities e.g. engineering services
 COST MODELLING

FINANCIAL METHOD
 The advantage of this method is that it helps to ensure a
profitable investment for the developer.

 Its disadvantage is that it may overlook the contribution

which a building can make to improving the social
environment
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The pyramid

Show some of the more traditional models that have been

developed over the years to suit various stages of the design
process.

The pyramid is an attempt to show that more details is

required in the structure of the model as we descend the list.
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Traditional Cost Model

Design stage level User Example (cost per)

Bed, seat, pupil, space

Unit
m2, GFA, m2 functional spark, m3
Space building volume

Element Functional element

Expressed/m2 GFA

Features Grouped SMM items

Abbreviated quantity

SMM items BQ items

Operation Network operation

Labour, plant
Resources Material, supervision
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Difference Between An Estimate

and A Cost Plan
 A traditional estimate is a prediction of the cost of a design and is
specific for a particular design
 Cost plan is not specific for a specific design
 The cost plan is a statement of how the design team proposes to
distribute the money available on elements of the buildings
 Estimate referred to until the time comes to compare it with the
tender
 The cost plan is referred to continuously throughout the design
process
 Cost plan used continuously throughout the subsequent
documentation stage as a method of checking (frame of reference)