Estimating Models 41
Estimating Models
This section develops several estimating models that can be used at the rough, semidetailed,
or detailed design levels. For rough estimates the models are used with rough data, likewise
for detailed design estimates they-areused-withdetailed data. The level of detail will depend
upon the accuracy of the model's data.
Per-Unit Model
Theper-unit modeluses a "per unit" factor, such as cost per square foot, to develop the
estimate desired. This is a very simplistic yet useful technique, especially for developing
estimates of the rough or order-of-magnitude type. The per unit model is commonly used
in the construction industry. As an example, you may be interested in a new home that is
constructed with a certain type of material and has a specific construction style. Based on this
information a contractor may quote a cost of $65 per square foot for your home. If you are
interested in a 2000 square foot floor plan, your cost would thus be: 2000 x 65=$130,000.
Other examples where per unit factors are utilized include
·Service cost per customer
·Safety cost per employee
·Gasoline cost per mile
· Cost of defects per batch
·Maintenance cost per window
· Mileage cost per vehicle
·Utility cost per square foot of floor space
·Housing cost per student
It is important to note that the per-unit model does not make allowances for economies
of scale (the fact that higher quantities usually cost less on a per-unit basis). In most cases,
however, the model can be effective at getting the decision maker "in the ballpark" of likely
costs, and it can be very accurate if accurate data are used.
Use the per-unit model to estimate the cost per student that you will incur for hosting 24 foreign
exchange students at a local island campground for 10 days. During camp you are planning the
following activities:
·2 days of canoeing
·3 campsite-sponsored day hikes
·3 days at the lake beach (swimming, volleyball, etc.)
·Nightly entertainment
After calling the campground and collecting other information, you have accumulated the follow-
ing data:
·Van rental from your city to the camp (one way) is $50 per 15 person van plus gas.
·Camp is 50 miles away, the van gets 10 miles per gallon, and gas is $1 per gallon.
