Have you ever wondered what cost estimation services are? It’s the process of figuring out how much something will cost. This can be done for a variety of purposes, such as forecasting and budgeting. There are a number of factors that go into estimating costs, such as materials and labor. So how does this all come together? Let’s take a closer look.
When it comes to estimating the cost of a project, you’ll likely hear about different types of costs estimation. Each has its own purpose in estimates, and each is calculated differently. Let’s take a closer look at each type.
1 – Preliminary Estimates:
Preliminary estimates are just that preliminary. They’re used to get a general idea of what a project might cost. This type of estimate is often used early on in the planning process, before more detailed information is available.
2 – Budget Estimates:
Budget estimates are more specific than preliminary estimates. They take into account more factors and provide a more accurate estimate of costs. This type of estimate is often used when creating a budget for a project.
3 – Final Estimates:
Final estimates are the most detailed and accurate type of estimate. They take into account all factors that could affect the cost of a project. This type of estimate is often used after a project has been awarded, and before work begins.
4 – Cost Overruns:
Cost overruns are when the actual cost of a project exceeds the estimated cost. This can happen for a variety of reasons, such as unexpected expenses or changes in the scope of work.
5 – Cost Savings:
Cost savings are when the actual cost of a project is less than the estimated cost. This can happen for a variety of reasons, such as efficient work or lower than expected costs of materials.
6 – Plinth Area Estimate:
The plinth area estimate is the estimated cost of construction based on the area of the building’s foundation. This type of estimate is often used for residential projects.
7 – Cubic Content Estimate:
The cubic content estimate is the estimated cost of construction based on the volume of space that will be created. This type of estimate is often used for commercial projects.
8 – Approximate Quantities Estimate:
The approximate quantity estimate is the estimated cost of construction based on the amount of work that will be required. This type of estimate is often used for complex projects.
9 – Fixed Price Contract:
A fixed price contract is a type of contract in which the price is not subject to change, regardless of the actual cost of the project. This type of contract is often used when the cost of a project is known in advance.
10 – Detailed Estimate:
A detailed estimate is an estimate that includes a breakdown of all costs. This type of estimate is often used for large and complex projects.
11 – Supplementary Estimate:
A supplementary estimate is an estimate that includes additional costs not included in the original estimate. This type of estimate is often used when the scope of work changes during a project.
12 – Provisional Sum:
A provisional sum is an amount included in an estimate for an item for which the quantity or cost is not known. This type of provision is often used for items that are difficult to estimate, such as site work.
Now that you know about the different types of costs used in estimating services, you can start to understand how estimation works. The next time you hear about a cost estimate, you’ll know exactly what it is and what it’s used for.
