W3 _Said Alamri_ Choosing the best Tool for Cost Estimation for a Maintenance Project (Real Case Study)

1.Problem Recognition

In my company we encountered leak in fire water pond. Divers were hired for under water inspection to identify the source of leak. After each repair still the water level goes down which indicates the leak is persist. the fire water pond bottom material is rubber liner. It is proposed to do permanent solution to overcome the problem for ever. The solution is to make the bottom of the pond concrete instead of excitant rubber liner. In this blog am going to do cost estimation for the project. The project will be executed in house and we have to make back up plan for fire water network system during the repair of the water pond. We have to arrange alternative hired pumps to make the system available in case of emergency.

2.Development the Feasible Alternative

There are four different tools to estimate cost of a project which are:

  • Analogous Estimation
  • Parametric Estimation
  • Three-point Estimation
  • Bottom-up Estimation

3. Development of the Outcome for Alternative

The job will be done in-house by company’s maintenance contractor. The cost of the project will be based on unit rate as per the agreement in between the company and its maintenance contractor.

4.Selection of Criteria

Since the cost is based on unit rate the method which is required to be used must be in details (based on WBS) and accurate.

5.Analysis and Comparison of the Alternative

Analogous Estimation

  • It is the fastest technique to estimate cost but less accurate.
  • This technique can be used with limited information available about the project.

Parametric Estimation

  • This technique uses the statistical relationship between historical data and variables; e.g. cost of painting of wall per square foot.
  • It is more accurate than the analogous estimation

Three-point Estimation

  • This technique uses three estimates to calculate the average estimate. The three estimates are the most likely cost, the pessimistic cost and the optimistic cost.
  • It reduces the biases, risks, and uncertainties from the estimation.
  • It is more accurate than the Analogous and Parametric estimatingtechniques.

Bottom-up Estimation

  • This technique is the most accurate technique of all the techniques discussed above.
  • This technique can only be used when every detail about the project is available.
  • This is very time-consuming and costly technique, but gives reliable and most accurate result.

Summary of the comparison between the four cost estimation tools represented in Table -1

Table-1 comparison between the four cost estimation tools

Table-1 comparison between the four cost estimation tools

6.Selection of the Preferred Alternative

Bottom- Up Estimation tool is the preferred one. Even though, it is slowest to be delivered but is the most accurate and reliable method

7.Performance Monitoring and the Post Evaluation of Result

This method will be implemented and tested. The results and the steps will be posted in the next coming weekly blogs.


  1. 4 Tools to Estimate Costs in the Project Management retrieved on June 18, 2014 http://pmstudycircle.com/2012/06/4-tools-to-estimate-costs-in-the-project-management/
  2. Top down and bottom-up unit cost estimation retrieved on June 18 http://data.gov.uk/sib_knowledge_box/top-down-and-bottom-unit-cost-estimation
  3. Create a Budget Estimate Using the Bottom-Up Approach retrieved on June 18 http://www.dummies.com/how-to/content/create-a-budget-estimate-using-the-bottomup-approa.html

One thought on “W3 _Said Alamri_ Choosing the best Tool for Cost Estimation for a Maintenance Project (Real Case Study)

  1. Hi Said,
    Sorry, even though you picked an EXCELLENT case study, because you set it up incorrectly, I am going to reject this posting, with the explanation that the question was not phrased appropriately nor are your feasible alternatives correct.

    Before you do any follow on work, turn to my handouts, Day 3, slides 14 and 17.

    What I recommend doing is to repost this as W3.1, with the same question, but this time, base your analysis on the following attributes: (See slide #17)
    Scope Definition and
    End Usage (what purpose will the estimate be used for)

    From that information, THEN you can answer the question “What is the best tool”. And you can also answer two additional or follow on questions-
    What is the expected ACCURACY RANGE of this estimate? (See DoE https://www.directives.doe.gov/directives-documents/0413.3-EGuide-21/view, page 16, figure 4-1)
    How much time/money should be budgeted to prepare the estimate?

    Bottom line- you picked an EXCELLENT case study and this is a great learning opportunity for you, so I want to work one on one with you to get it right.

    Suggest before you repost that you read over Chapters 4 and 5 from the DoE document. https://www.directives.doe.gov/directives-documents/0413.3-EGuide-21/view

    Looking forward to seeing you really do an outstanding job on this very interesting and important topic

    Dr. PDG, Boston, MA

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