The cost estimate is used to determine the size of the required investment to create or modify assets. It is also during the early phases that alternative plans are considered that need to be priced. The cost estimate is a deliverable that serves the decision-making process at each gate of the project lifecycle.
Being able to make accurate cost estimates is key to delivering a solid project plan. Cost estimating utilizes many techniques that translate the project scope into deliverables and develop an approximation of costs of the resources needed to complete project activities.
Without estimation in civil engineering, it is impossible to complete a construction project at actual operating costs. The client or project manager cannot keep the project cost within reasonable limits unless the project cost has already been estimated.
By using cost analysis, engineers and decision-makers can make informed and rational choices among different alternatives or scenarios, and optimize the design and performance of their products or systems.
Project cost management aims to avoid any cost overruns on projects, ensure project profitability, and keep profit margins high. As a project manager, it is essential that you calculate project costs during the planning phase for approval before work commences to stay within the cost management plan.
The Importance of Cost Estimation in Engineering Projects.pdf (428.9% u)