Larry R. Dysert

Cost Engineering, Vol. 43, No. 2

AACE International, Morgantown, WV, 2001

A parametric cost model is an extremely useful tool for preparing early conceptual estimates, when there is little technical data or engineering deliverables to provide a basis for using more detailed estimating methods. This article discusses the development of a parametric model used to prepare conceptual estimates for process control costs on projects. This discussion is based on a specific parametric model used by the Eastman Kodak Company, which is probably unique to its capital projects. However, the specific algorithms and the model are not the focus - this article describes how the model was developed and how it is being used. The article reviews the types of data collected to support the model, the analysis of the data, the creation of a spreadsheet model based on the analysis, and the various forms of output and presentation data available from the model. What is learned from this particular parametric model can be applied to other circumstances and used to create other parametric models applicable to other situations.

Originally published by AACE International.

Reprinted with the permission of AACE International,

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