Cost Control and Cost Planning in Construction Industry
Introduction
Profit is always the main consideration for a company to make decision and it is the main reason to run a project. But how we can gain profit by running project?
A proper planning is always help to reduce the risk on running project. There are a lot of tools or methods offer by project management, cost planning and control is a very important tool for project management.
A good cost planning is because it can help on forecasting the expenses that need to spend for the project. And cost control will minimize the wastage during execution of project.
This report will emphasize the objectives, benefits, methods and other matters on construction cost planning and cost control.
Cost Planning
Cost planning normally will conduct in the prior stages of construction project.
After the owner has allocated the budget, cost planning will determine whether the project will over budget. If yes, the project is not feasible in its current state and should be re-plan or re-schedule to reduce costs.
The general advantages of cost planning include:
The tender sum is more likely equate with the approximate estimates.
Reduce the unnecessary quantities being required
Cost effectiveness and a value for money design are more likely to be achieved
A balanced distribution of expenditure is likely to produce a more rational design
Cost considerations are more likely to be taken into account because of the greater involvement of the quantity surveyor during design process. This will result in the BQ preparation becoming easier, since the quantity surveyor will be more familiar with the project and have a greater understanding of what the designer is attempting to achieve.
The amount of pretender analysis by the architect and quantity surveyor should enable more decisions to be taken earlier, resulting in a smoother running of the project on site.
Cost planning provides a basis for
Profit is always the main consideration for a company to make decision and it is the main reason to run a project. But how we can gain profit by running project?
A proper planning is always help to reduce the risk on running project. There are a lot of tools or methods offer by project management, cost planning and control is a very important tool for project management.
A good cost planning is because it can help on forecasting the expenses that need to spend for the project. And cost control will minimize the wastage during execution of project.
This report will emphasize the objectives, benefits, methods and other matters on construction cost planning and cost control.
Cost Planning
Cost planning normally will conduct in the prior stages of construction project.
After the owner has allocated the budget, cost planning will determine whether the project will over budget. If yes, the project is not feasible in its current state and should be re-plan or re-schedule to reduce costs.
The general advantages of cost planning include:
The tender sum is more likely equate with the approximate estimates.
Reduce the unnecessary quantities being required
Cost effectiveness and a value for money design are more likely to be achieved
A balanced distribution of expenditure is likely to produce a more rational design
Cost considerations are more likely to be taken into account because of the greater involvement of the quantity surveyor during design process. This will result in the BQ preparation becoming easier, since the quantity surveyor will be more familiar with the project and have a greater understanding of what the designer is attempting to achieve.
The amount of pretender analysis by the architect and quantity surveyor should enable more decisions to be taken earlier, resulting in a smoother running of the project on site.
Cost planning provides a basis for