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Controlling Costs: Forecasting, Planning, and Checking in Project Management

Learn how to effectively control project costs through cost forecasting, planning, and checking. Explore different methods such as functional unit costing and functional space costing.

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Controlling Costs: Forecasting, Planning, and Checking in Project Management

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  1. Money pt 2 IDCC PPT 8.0 B Paget & R Hayes

  2. Controlling costs • Where are we up to in the project? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  3. Controlling costs • How can we do it? • Definitions • Function - The main purpose that the building. • Functional Unit - The factor that expresses the intended use of the building better than any other. e.g. Number of pupils in a school; number of cars in a car park; etc.. • Gross Internal Floor Area (GIA) - The total internal floor area measured to the inside face of the external walls. (Measured overall internal walls, partitions, staircases, and voids).

  4. Controlling costs • Cost Forecasting – Establishing the budget • How can we forecast how much it might be if there are no or few drawings? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  5. Controlling costs • Cost Forecasting – Establishing the budget • How can we forecast how much it might be if • there are no or few drawings? • We can define the project in a number of ways to • make comparisons, here are just two types; • Functional unit costing • Functional space costing • Superficial cost/m2 gross Internal Floor Area (GIFA) • Functional area cost/m2 per function • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  6. Controlling costs • Cost Forecasting – Establishing the budget • How can we forecast how much it might be if • there are no or few drawings? • We can define the project in a number of ways to • make comparisons, here are just two types; • Functional unit costing • Functional space costing • Superficial cost/m2 gross Internal Floor Area (GIFA) • Functional area cost/m2 per function • E.g. • car park – number of cars - Cost per car • school - number of pupils – Cost per pupil • Restaurant– customer seating – Cost per diner • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  7. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 2 • Functional unit costing • Consider an existing multi-storey car park: • - total cost of construction = £6,000,000 - number of cars accommodated = 1000 • What is the cost per parking space? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  8. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 2 • Functional unit costing • Consider an existing multi-storey car park: • - total cost of construction = £6,000,000 - number of cars accommodated = 1000 • - cost per car parking space: • -£6,000,000/1000 = £6,000 • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  9. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 2 • Functional unit costing • - cost per car parking space: • -£6,000,000/1000 = £6,000 • Now consider a proposed multi-storey car park: • - number of cars to be accommodated = 400 • - assumed cost per space = £6,000 • What's the forecasted cost? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  10. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 2 • Functional unit costing • - cost per car parking space: • -£6,000,000/500 = £6,000 • Now consider a proposed multi-storey car park: • - number of cars to be accommodated = 400 • - assumed cost per space = £6,000 • total cost of proposed car park: £6,000 * 400 = £2,400,000 • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  11. Controlling costs • Cost Forecasting – Establishing the budget • How can we forecast how much it might be if • there are no or few drawings? • We can define the project in a number of ways to • make comparisons, here are just two types; • Functional unit costing • Functional space costing • Superficial cost/m2 gross Internal Floor Area (GIFA) • Functional area cost/m2 per function • E.g. • Restaurant– GIFA area– Cost per sq/metre • Shop – GIFA area - Cost per sq/metre • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  12. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 3 • Functional space costing • Superficial cost/m2 gross Internal Floor Area (GIFA) • E.g. • Restaurant– GIFA area– Cost per sq/metre • Shop – GIFA area - Cost per sq/metre • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  13. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 3 • Functional space costing • Superficial cost/m2 gross Internal Floor Area (GIFA) • E.g. • Restaurant– GIFA area– Cost per sq/metre • Shop – GIFA area - Cost per sq/metre • Gross Internal Floor Area (GIA) - The total internal floor area measured to the inside face of the external walls. (Measured overall internal walls, partitions, staircases, and voids). • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  14. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 3 • Functional space costing • Superficial cost/m2 gross Internal Floor Area (GIFA) • What do we include? • Restaurant– GIFA area– Cost per sq/metre • Shop – GIFA area - Cost per sq/metre • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  15. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 3 • Functional space costing • Superficial cost/m2 gross Internal Floor Area (GIFA) • What do we include? • Restaurant– GIFA area– Cost per sq/metre • Shop – GIFA area - Cost per sq/metre • (36m x 10m) + (11m x 3.3m) • =? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  16. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 3 • Functional space costing • Restaurant– GIFA area– £1,000 per sq/metre - what's the total? • (36m x 10m) + (11m x 3.3m) • =? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  17. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 3 • Functional space costing • Restaurant– GIFA area– £1,000 per sq/metre - what's the total? • (36m x 10m) + (11m x 3.3m) • =396.3sq/m • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  18. Controlling costs • Cost Forecasting – Establishing the budget • How can we forecast how much it might be if • there are no or few drawings? • We can define the project in a number of ways to • make comparisons, here are just two types; • Functional unit costing • Functional space costing • Superficial cost/m2 gross Internal Floor Area (GIFA) • Functional area cost/m2 per function • E.g. • Shop – individual functions area – retail area - cost per sq/metre + WC area cost per sq/metre • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  19. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 4 • Functional space costing • Functional area cost/m2 per function • What do we measure? • (36m x 10m) + (11m x 3.3m) • =? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  20. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 4 • Functional space costing • Functional area cost/m2 per function • What do we measure? • (36m x 10m) + (11m x 3.3m) • =? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  21. Controlling costs • Cost Forecasting – Establishing the budget • Exercise 4 • Functional space costing • Functional area cost/m2 per function • Put a cost against each function • (36m x 10m) + (11m x 3.3m) • =? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  22. Controlling costs • Where would be up to in the project? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  23. Controlling costs • Cost Forecasting – Establishing the budget • With our shop we have the drawings so we can generate a more accurate forecast • For next week; • Produce a functional unit costing based on 2 shoppers per sq/m – £300 per shopper • Produce a GIA for superficial cost using £500 per sq/m • Prepare to produce a functional cost using £ 550 per sq/m retail • £ 300 per sq/m BOH • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  24. Controlling costs • Cost Forecasting – Establishing the budget • How can we design to a budget? • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  25. Controlling costs • Cost Forecasting – Establishing the budget • How can we design to a budget? • A combination of • Drawings • Written description of the works • Schedules • Cost plan • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  26. Controlling costs • Cost Forecasting – Establishing the budget • How can we design to a budget? • A combination of • Drawings • Written description of the works • Schedules • Cost plan • Cost Forecasting – Establishing the budget • Cost Planning – Designing to the budget • Cost Checking/remedial action –Controlling the budget

  27. Questions? IDCC PPT 8.0

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