W12_Khalid Almamari_Cost Estimation Technique for new HSE program project

  1. Problem Definition:

As a focal point of the my department in the HSE champion committee for 2014 as the HSE department started to take a main rule in the most of the company’s business, I thought to propose new program to them to be implemented with cost associated to apply it. This 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 program allows employees and members of supervision and management to use techniques needed to ensure the safety behavior of themselves, their colleagues and contractors working through conducting informal behavioral observation. This cost estimation could help the other department to make such decision.

2. Identify the Possible Alternative

The main techniques for project cost estimation are considered as following:

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. As the department has a continued HSE consultant on hire basis contract.

3. Development of the Outcomes for Each Alternative

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

  1. Selection of Criteria

The selection of cost estimation technique will be driven by the following criteria such as Availability of historic information, Time, Accuracy and Experience in same project.

5. 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 the new program project. Qualitative comparative analysis of the alternatives will evaluate which cost estimation technique will be fit for HSE program project with weight estimate of each attribute.

Results of evaluation for Cost estimating Techniques.

Criteria Weight Analogous Technique Parametric Technique Expert Judgment
Historic Data 25% 10 0 25
Time 25% 20 25 20
Accuracy 25% 20 20 20
Require similar experience 25% 10 0 25
Results Total: 100% 60% 45% 90 %

The results shows that expert judgment technique marked high as 90% while other two methods are below by far because parametric and analogous techniques have very less with historic data and similar experience. 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.

  1. 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 of new HSE program.

  1. Performance Monitoring and Post Evaluation of Results

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


  1. edu, u. (n.d). Methods of cost estimation. Retrieved September 6, 2014, from http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCEQFjAA&url=http%3A%2F%2Fwww.unf.edu%2F~dtanner%2Fdtch%2Fdt_ch5.htm&ei=g_EKVKKSC5bxaKbRgogE&usg=AFQjCNEjXP4LrMcx5zUu51QwUt3jVWUQaQ&bvm=bv.74649129,d.d2s
  2. com, o. (n.d). HSE programs. Retrieved September 6, 2014, from http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CDMQFjAB&url=http%3A%2F%2Fwww.orascomci.com%2Findex.php%3Fid%3Dhealthsafetyandenvironmenthsedevelopmentprogram&ei=G_EKVLvyFYHWaK3egugI&usg=AFQjCNEURqQuILRipi5smK5CvernGX3BDA&bvm=bv.74649129,d.d2s
  3. com, d. (n.d). project cost estimation. Retrieved September 6, 2014, from http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CCgQFjAB&url=http%3A%2F%2Fwww.dummies.com%2Fhow-to%2Fcontent%2Fhow-to-estimate-project-costs.html&ei=rfAKVJ-wNZXWaOmGgFA&usg=AFQjCNESI48e87311e5ihV50ti-YUw9o1Q&bvm=bv.74649129,d.d2s

One thought on “W12_Khalid Almamari_Cost Estimation Technique for new HSE program project

  1. Interesting and intriguing case study, Khalid….. I am actually having a hard time grading this posting……

    While I agree with your choice of expert opinion in #1 spot for your problem, I think your step 5 analysis was flawed. I would argue that “Expert Judgement” does NOT rely on “historic data” but on experience alone, while on the other hand “Parametric Modeling” relies almost 100% on historic data.

    Also, the accuracy of each of these methods is not the same. The expert judgement method suffers from “optimism bias” but on the other hand, for “intangible” costs/benefits from HSE, expert judgement is very appropriate.

    Bottom line- While your case study is an excellent one, I think you should have included “Benefit:Cost Analysis” as one of the options and I think you would be better off to revisit the actual scores you gave to each of the scoring parameters…… Maybe use the Delphi Technique and poll more of your colleagues?

    Dr. PDG, Jakarta

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