w2_MAlmujaini_Cost Estimation Technique for STOP program project


  1. Problem Definition:

This year HSE department initiated a STOP project. The STOP™ program provides a path to workplace safety excellence by making safe behavior and workplace conditions part of the work culture, thus preventing injuries and incidents. The STOP™ program allows employees and members of supervision and management to use techniques needed to ensure the safety behavior of themselves, their colleagues and contract workers through conducting informal behavioral observation.

The company requested for cost estimation to identify estimate investment to make an economic calculation. Cost estimation helps the company to complete project on budget, but it also required to complete scope, WBS, Resources and duration.

2. Identify the Possible Alternative

The main techniques for project cost estimation are:

Analogous Estimation: Use of known costs from prior project of similar type then adjusted (if necessary) to reflect specific differences between projects.

Parametric Estimation: A total cost is derived based on specific factors that have a high correlation to total cost such as weight, volume and power

Expert Judgment Estimation: Use expert judgment which will use historic information to estimate the cost.

3. Development of the Outcomes for Each Alternative

The company needs to select one technique that will fit with this type of project.

4. Selection of a Criterion

The selection of cost estimation technique will be driven by the following criteria:

1-    Availability of historic information

2-    Time

3-    Accuracy

4-    Experience in same project.

 

 

  1. Analysis and Comparison of the Alternatives

All techniques will be tested against the criteria to decide which technique is fit to estimate the cost of STOP program project. Qualitative comparative analysis of the alternatives will evaluate which cost estimation technique will be fit for STOP program project with weight estimate of each attribute.

Table1: Results of evaluation for Cost estimating Techniques.

    Attributes
Criteria Weight Analogous Technique Parametric Technique Expert Judgment
Historic Data 25% 0 0 25
Time 25% 20 25 20
Accuracy 25% 20 20 20
Require similar experience 25% 0 0 25
Results Total: 100% 40% 45% 90 %

The results shows that expert judgment technique marked high as 90% while other two methods are below 50% because parametric and analogous technique cannot be conducted without historic data. Therefore, the best technique is Expert Judgment as this not relay on historic data which is not available in our company case as this is first project and no experience in similar project.

 

 

5. Selection Criteria

The proper cost estimation technique for this project is Expert Judgment as the company has safety consultant and expert who can provide quick and accurate estimation on implementing STOP program.

7. Performance Monitoring and Post Evaluation of Results

The expert judgment method is best among the other method, because of non availability of historic data and availability of expert. If the expert that selected by company is not knowledgeable enough on STOP system, other techniques or other expert should be considered.

 

 

8- References:

DuPont™ STOP™, Retrieved June 10, 2014, from http://www.training.dupont.com/dupont-stop

Rupen, S. (2013, April 24). Tools used to estimate cost in project management. Retrieved June 10, 2014, from

http://www.brighthubpm.com/project-planning/54986-tools-used-to-estimate-costs-in-project-management/

Project Management GURU. (2012) “Project Management Estimating tools & Techniques” Retrieved June 11, 2014 from

http://www.projectmanagementguru.com/estimating

 

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One thought on “w2_MAlmujaini_Cost Estimation Technique for STOP program project

  1. EXCELLENT case study, Mohammed, but why not use some of the more sophisticated Multi-Attribute Decision making models?

    Here are some good examples- http://topazsmartd.wordpress.com/2014/06/12/w7-0_sb_softwaretools-selection-by-compensatory-model-additive-weighting-technique/comment-page-1/#comment-151

    For your W3 blog, why not take the same case study (which is a good one) but this time, apply the compensatory multi-attribute decision making models?

    Looking forward to seeing what you do with this….

    BR,
    Dr. PDG, Pensacola, Florida

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