Unit cost approach of estimation in construction undertakings starts with dividing a undertaking into various components or elements for the purpose of cost estimation. The cost of each of the undertaking’s components or elements are assessed and their cost estimation is calculated. Sum of costs of each undertaking elements gives the total construction cost of the undertaking.
The unit cost method of estimation can be used for project design estimates as well as for bid estimates.
Construction cost estimates are of three types mentioned below:
The cost of euipments if any is also included. During the preliminery cost estimate , as cost details of every minute elements are not of much importance, the project is divided into major components and cost estimate of these major units are calcualted based on the past project experiences. For example, estimating the cost of entire floor based on its area.
During detailed Cost estimates , the project is divided into components of various major systams and cost of each components is estimated to calculate project cost. for instance, cost of installation of any machinery, cost of beams, columns or walls etc.
During Engineer’s cost estimate s , each of the components of the major systems of the project is divided into various components that contributes to the cost of the major systems.
for instance, for cost estimation of an RCC column, the components are concrete, which is also divided into cement, sand and aggregates, reinforcement steel , formworks etc. The unit cost of each of these materials are considered by calculating the cost of an RCC column.
For bid estimates, the unit cost method of estimation can also be used even though the contractor divides the undertaking into different levels in a hierarchy as follows:
Let “Qi” be the quantity of the ith element and ui be the corresponding unit cost. Suppose that a construction undertaking is divided into “n” elements for cost estimation. Then, the total cost of the undertaking is given by: where n is the number of units. The unit cost of element ui is estimated based on the method of construction, technology used, type of materials used etc.
Sometimes during the cost estimate , there can be some of the minute components which may not have been considered or there can be some variations w.r.t time. In such cases, the cost of units are factored as an allowance for variations or the elements not considered in the estimates. The formula for factored unit cost estimation is as follows:
where Ci is the purchase cost of a major component i and fi be a factor accounting for the cost variation of the item, n is the number of components included in the construction project.
Let Qi be the quantity of work for task i, Mi be the unit material cost of task i, Ei be the unit equipment rate for task i, Li be the units of labor required per unit of Qi, and Wi be the wage rate associated with Li. Suppose that a building project is decomposed into n tasks. In this case, the total cost y is: Note that WiLi yields the labor cost per unit of Qi, or the labor unit cost of task i. Consequently, the units for all terms in Equation above are consistent.