The General Overhead And Construction Projects Essay

A project manager is an individual who really needs a set of skills to achieve a successful construction project. The expertise and learning should be based on technical knowledge, site knowledge, management knowledge, controlling and finally executing. He has some ways to divide his working task, for example introducing sub contract or allotting co-engineers and workers.

Centre for Research in the Management of Projects, University of Manchester, P.O. Box 88, Manchester M60 1QD, UK Centre for Research in the Management of Projects, School of Construction and Project Management, The Bartlett University College London, UK Received 8 July 2003; received in revised form 30 January 2004; accepted 15 June 2004

Overhead costs are not in proportion to the production output because of the method they are using. This leads to inaccurate pricing and costing decisions. An Activity Based Costing System would help find the real relationship between the products produced and overhead.

Over the past few years, the construction industry has been changing dramatically. One of the most important stages in the construction management and business management is the planning phase. They share similar two main levels of planning which are the strategic and operational planning. However, business management planning to decide in advance what should be done, and how to do it, when you do and you are done. On the other hand, Construction management strategic planning is to deal with selection on a high level of overall objective of the project, including the scope, procurement methods, schedules and financing options but the planning of operations, including the

Clough, Richard H, Glenn A. Sears, S K. Sears, Robert O. Segner, and Jerald L. Rounds. Construction Contracting: A Practical Guide to Company Management. , 2015. Print.

Another element that is essential in the project management plan is the cost management plan. The main focus of the cost management plan is overseeing the cost of the necessary resources for the execution of the project (PMI, 2013). This function is completed within the planning stage of an endeavor to provide a structure to support performance and efficiency throughout the lifecycle of the undertaking (PMI, 2013). For the AAE Project, analogous and parametric estimating was utilized in estimating the potential costs of the endeavor. Appendix T shows the cost breakdown of each activity within the project by separating the salaries, equipment/vendor costs, and vendor contract costs. Since

From studying what Sr. Humphreys said in the interview, we found that GLY Construction has a different way to deal with the allocation of the general overhead cost. Based on the type of the project, they determine whether they should allocate it or not. For one instance, on the one hand, in case the procurement method of the project is competitive bidding, they never consider the overhead cost in it. However, on the other hand, in the negotiated projects procurement method, they shift the cost to the clients under the category of job cost.

We are requested to assist the building with creating a method of construction cost data for client throughout the pre contract. The task of data collection is a difficult procedure and can be include to wide variations. Based upon our experience as quantity surveyors we chose to develop a cost data collection method. Our define construction line items and quantities for relativity building types.

Using the inputs above combined with specialised tools and techniques, the CITIC Consortium came up with an outputted estimated cost to submit for the tender. These tools are as follows. High quality personnel were trained for estimates and the company (CITIC Consortium) had a finance department used for estimating projects (Chinyere,2013). This team was used throughout the whole project and because of their background in estimating, this meant that they had expert judgement on what activities could be done and for what price. Other techniques the team used include computer software which could generate estimates on prices using historical information and previous projects that the team had done (Chinyere, 2013). In regards to project cost management theory, analogous estimating and parametric estimating are seen to be better so using these might have given the company a better estimate on the Birds Nest Stadium project (Hueber, 2015).

In view of the importance of the budget to project management, this report has prepared the following budget summaries and further illustrates the different types of costs associated within the

Professional behavior and discipline is always expected of the cost estimator since construction estimating tends to be highly technical. Estimators must also exercise holding good morals, because more often than not they receive pressure from other members of the construction team to make short-term decisions that can lead to inaccurate estimates. Resistance to this type of pressure is a part of the estimator’s job and can be beneficial to everyone in the long run. Integrity is another trait expected upon the estimator. Another important trait is to have good judgment. This is a skill obtained through proper training as well as extensive experience in the construction field. The proper use of judgment could mean the difference between profit and loss for the company or client. Estimators should approach each estimate with a professional

The type of overhead cost allocation system that I deem necessary for Digi-in Technology Ltd should be activity-based costing. This allocation system with work well for this company due to that fact that the method utilizes several cost pools. Examples of activity pools with this company include; material purchase, molding, machines setup, quality control, testing, etc. With its numerous activity pools, the company must therefore be careful when allocating its overhead costs, and using the plant-wide or departmental allocation may not be very accurate due to the many activities involve in the production of goods in this

There however are challenges in the industry occasioned by uncertainty on future spending on construction projects by the government. Moreover, the cost of doing business and the ability to increasingly make revenue have created a challenging environment for the construction firms. Therefore stakeholders in the construction industry are concerned with whether the government would increase its spending and whether the public construction projects will be available in the future since less than 10 percent are currently financing their clients.

There are four independent levels for classifying project estimations in the construction industry. Levels are based on the completeness of the project documents and the amount of detail that they are presented in. The highest level of estimation (Class A) will provide the owner or project sponsor with the most amount of detail in the drawings and specifications. Class A estimates are considered to be pre-tender estimates in which they are fifty percent completed and will stay within a margin of five to ten percent of the actual contract cost. Class B estimates present incomplete documents but with detailed information on the design which must be submitted for

There are two classifications of costs associated with construction projects, direct costs and indirect costs. Direct costs include the labor, material and equipment operating costs necessary to put work in place. Indirect costs include supervision, job and home office overhead, profit, financing, and the cost of inflation. Direct costs can be allocated to each activity on the project. Indirect costs, on the other hand, cannot be realistically prorated and assigned to each separate activity.