Factors Influencing Accuracy of Cost Estimates in Buildings

This report delves into the critical factors that influence the accuracy of cost estimates in early-stage building projects. It examines the impact of material prices, material quality, and material availability on overall project costs. The analysis highlights how market fluctuations, manufacturer capabilities, and buyer-seller dynamics affect material costs. The report also emphasizes the importance of using high-quality materials to minimize long-term expenses and avoid potential repair costs. Furthermore, it discusses the significance of material sustainability and the impact of transportation costs on project budgets. Various preliminary estimating techniques, including the functional unit method, floor area unit method, cubic method, and storey enclosure method, are compared, providing insights into their accuracy, required information, popularity, and convenience. The report concludes by summarizing the key factors influencing cost estimation and underscores the importance of considering these elements for accurate project budgeting and successful construction outcomes.

FACTORS INFLUENCING ACCURACY OF COST ESTIMATES IN EARLY STAGE BUILDING
Student’s Name
Class
Tutor’s Name
Institution’s Name
City
Date
1000 words

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Introduction
During estimation, various factors need to be put under consideration in that the market
condition produces a grave effect on the estimation. These many market factors that pose an influence
to the cost estimates include the material quality, material prices, and material availability. Also, there
comes a number of methods that can be put to use in conducting cost estimation. These methods
include a functional unit, cubic method, floor area unit and Storey enclosure (Austroads & Elisa, 2014).
Factors influencing accuracy of cost estimates in early stage building
1. Material prices
This factor is an example of the very fluctuating factors present in the wide market. The
materials used in construction have a range starting from large items that include gravel, steel, bricks,
concrete, timber, electronic and plumbing fittings to the smaller more basic materials that are the
screws and nails. The cost of buying the materials named above is heavily affected by the production
ability of the manufacturer. The manufacturer’s ability affects in a way that when these materials are
bought during times that their orders are many, then their prices are set to be higher than the times
when their orders are much lesser. Prices of materials also are affected by the volume of buyers present
to the volume of materials present. When the buyers are more the materials prices get high (Chudley &
Greeno, 2016).
2. Material Quality.
In estimation, material quality in the used materials also need to be added to the considerations
in that when a higher quality material is used, the cost is directly affected and increases. However, there
are incidences that the cost of construction increases due to the use of low-quality materials. This
incidence is due to the overall material loss in the construction process. Low-quality materials tend to

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damage easily when used. Thereby forcing more funds to be routed for repair hence increasing the
material estimate. The easily damageable material occurs due to the lacking standards in the material
and management systems. An example can be taken from the Mara large Project case scenario. It is
therefore concluded that a profitable construction is doable by use of high-quality materials that meet
minimum standard required in the construction job that ultimately evades repair of construction
materials. High-quality materials reduce the overall cost estimate of the project being undertaken in
that the material will last for a longer duration of time before it collapses. Faulty materials should be
avoided (Ashworth & Perera, 2015).
3. Material Availability
In availability, the ease of finding any raw material that is to be used in construction affects cost
estimation. For example, if raw construction materials like stone or timber are obtained easily, then the
cost estimation of the construction project is reduced. In cases where the materials required are difficult
to obtain in the surrounding area, the cost estimation is increased (Spain & Bryan, 2010). Material
sustainability is also an influencing factor. An example is when a material is found commonly in the
surrounding area then the cost reduces but if it is difficult to locate, the cost sky rockets. Take the teak
tree, the tree is not easy to grow and lack of conducive climate in the neighboring are makes it not be
grown thereby it requires transportation to the site (Goodman, et al., 2016). This, therefore, increases
the cost per meter. Hence it is advisable to use materials commonly present and inexpensive. One more
advice is the need to locate the constructing area in places near material sources to avoid transportation
costs. Availability in terms of quantity is critical when buying materials. If materials are bought in bulk
from one supplier they become cheaper than if bought from a variety of suppliers. Moreover, the bulk
buying reduces the loss of materials. Loss due to thievery and wastage is avoidable. An example such as
the buying of yard lumber from a yard supplier, bricks supplied by brick-makers and screws supplied by

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store owners would increase cost rather than buying all these from one supplier. Regularity and
adequacy in supplying materials is a very crucial issue since irregular or late delivery or delivery of wrong
material types in project construction might affect the utilization of other relating resources. Material
availability can be calculated and estimated by the wastage anticipation technique, thievery
anticipation, and anticipation of uninsured material theft or making a contingency plan by increasing
estimate by a small percentage. These techniques allow cover of unforeseen events hence securing cost
estimation (Curtis & Veechi, 201).
Comparison of commonly used preliminary estimating techniques
ESTIMATING
TECHNIQUE
DESC
RIPTION
ACC
URACY
RE
QUIRED
INFORMATI
ON
POP
ULARITY
CONV
ENIENCE
1.
Functi
onal Unit
Method
Estim
ates are
prepared
from a similar
project
Low
accuracy.
Ade
quate
historical
data of
similar
project.
Limit
ed to public
projects.
Allows
preparation of
similar
projects
2.
Floor
Area Unit
Method
Total
floor area
between
external walls
in all storeys
is measured
without
deductions
for items.
Me
dium
accuracy.
The
cost of the
historical
square-
meter and
the
calculated
floor area.
Most
popular.
Used
in projects
with simple
designs.
3. Cost Low Buil Less It is

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Cubic
Method
of the
building is
related to its
volume
accuracy. ding’s
volume and
related
cost.
used. simple
4.
Store
y Enclosure
Method.
An
estimation
system uses
building’s
shape,
vertical and
horizontal
floor areas.
Mos
t accurate.
Buil
ding’s
horizontal
and vertical
plane areas.
Little
application
Used
in designs
requiring huge
data amounts.
Conclusion.
The cost estimation in project construction is heavily affected by the material quality, material
prices, and material availability. Material quality being the influence of minimum standards required for
construction materials, the material prices being influenced by the proximity of the construction site to
raw resources and the orders being placed at the moment (Smith, et al., 2016). Material availability is
affected by the sustainability of raw materials required. All these factors in materials influencing the cost
estimation in early stage building. The cost estimation in construction projects can be approximated by
applying the various methods indicated such as cubic method, storey enclosure method, floor area unit
method and the functional unit method (Pratt & David, 2011).

Appendices
Material Availability
Serial
No.
Factors Overall Respondents of clients Respondents of
contractors
Mean Standard
deviatio
n
Ran
k
Mean Standard
deviatio
n
Ran
k
Mean Standard
deviation
Ran
k
7 Material
Procurem
ent Delay
3.53 0.94 5 3.33 0.91 9 3.8 0.94 3
Material prices
Serial
No.
Factors Overall Respondents of clients Respondents of
contractors
Mean Standard
deviatio
n
Ran
k
Mean Standard
deviatio
n
Ran
k
Mean Standard
deviation
Ran
k
7 Material
Procurem
ent Delay
3.97 0.97 1 3.62 0.87 6 4.47 0.92 1

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Reference List
Ashworth, A. & Perera, S., 2015. Cost Studies of Buildings. 6 ed. Townsville: Taylor & Francis.
Austroads, L. & Elisa, C., 2014. Building and Construction Procurement Guide: Principles and
Options. Perth: Austroads Limited.
Chudley, R. & Greeno, R., 2016. Building Construction Handbook. 11 ed. Hobart: Routledge.
Curtis & Veechi, 201. Small Business For Dummies. 3 ed. Melbourne: John Wiley & Sons.
Goodman, R., Buxton, M. & Moloney, S., 2016. Planning Melbourne: Lessons for a Sustainable
City. 1 ed. Melbourne: Csiro Publishing.
Pratt & David, 2011. Estimating for Residential Construction. 2 ed. Sydney: Cengage Learning.
Smith, J., Jaggar, D. & Love, P., 2016. Building Cost Planning for the Design Team. 3 ed.
Sydney: Routledge.
Spain & Bryan, 2010. Spon's First Stage Estimating Handbook, Third Edition. 3 ed. Mackay:
CRC Press.