Cost Modelling Research & Definition GROUP 1 Abuwsi. Omar, Foote. Dominic, Hong. Hua Ting, Li. Xiao Lin, Pisarenko. Slava, Trotman. Charles Albert, Zhang. Xue

Cost Modelling “Cost Studies Building” defines Cost Modelling as: “A symbolic representation of some observable system which is proposed, in terms of its significant cost, feature for the purpose of display, analysis, comparison or control.”

Cost Modelling Cost model – a compilation of cost estimating logic that aggregates cost estimating details into a total cost estimate. An ordered arrangement of data, assumptions, and equations that permits translation of physical resources or characteristics into costs. Cost models generally consist of a set of equations, logic, programs, and input formats. Cost models also allow for the input of program information, including both system description data and estimating relationships. Cost models generally produce a variety of output formats. (LASTRA, 2014) LASTRA, B. G. (2014). A METHODOLOGY TO MAKE ACCURATE PRELIMINARY. 24.

Cost Modelling “The term cost modelling although widely used perhaps needs further elaboration. The term itself more accurately means price modelling, that is the price the constructor charges for construction the project.” (David Jaggar, 2002, p. 50) David Jaggar, A. R. (2002). Building Design Cost Management. Oxford OX2 0EL, UK: Blackwell Science Limited.

Cost Modelling “Cost modelling may generally be defined as the analysis of resource data including direct labour, direct material, indirect cost, sales, general and administrative costs, research and development cost and profit to understand the projected or true cost of products and services produced or purchased by the organization.” (Victor Sower, 2015, p. 4) Victor Sower, C. S. (2015). Better Business Decisions using cost modeling. New York: Business Expert Press.

Cost Modelling For the purposes of this assignment cost modelling is best described by: a compilation of cost estimating logic that aggregates cost estimating details into a total cost estimate. An ordered arrangement of data, assumptions, and equations that permits translation of physical resources or characteristics into costs. Cost models generally consist of a set of equations, logic, programs, and input formats. Cost models also allow for the input of program information, including both system description data and estimating relationships. Cost models generally produce a variety of output formats. (LASTRA, 2014)

Purpose of Cost modelling To forecast construction costs for clients To estimate resource costs for contractors

Definition of Cost Planning “Cost Studies Building” defines Cost Planning as: “Cost planning that is used today might more aptly be renamed value planning, since although there is an emphasis on ensuring that tender sums equate with budget estimates, the other intention is to provide a balanced design and value for money.”

Types of Cost Models Designers’ cost models Use models of previously completed buildings on which to attach estimates of future costs

Types of Cost Models (cont.) Contractors’ or production models It is prepared as part of the tendering process prior to construction works commencing on site

Types of Cost Models (cont.) Mathematical models Seeking to identify variables that best describe cost

Green building “Build Green” define Green buildings as: “A green building is an environmentally sustainable building, designed, constructed and operated to minimise the total environmental impacts.” http://buildgreen.co.nz/definition.html

Green building Wiki defines ‘Green’ or sustainable building as both the structure and the use of processes that are both environmentally responsible and resource efficient throughout a buildings life cycle. This will be the definition that best describes green building for this assignment.

Impacts Of Green building on Cost Modelling Capital Cost - materials & construction strategy, Increase capital cost could be off set when mechanical systems are minimise or omitted eg. Energy efficient design can produce savings in ductwork. Also reduce need for bulky mechanical equipment so more floor space can be available for leasing. OPEX, reduced energy & water

Other Potential Impacts Of Green building Lower maintenance costs Higher profitability through increased capital value. Decreased need for refurbishment in the future

BIM Models & Green buildings BIM Models can help Architect/Engineer/Designers better compare sustainable alternatives through enhanced information to balance energy & resource efficiency with project costs.

Theory of Cost Modelling applied in Green Building The Life Cycle Cost (LCC) is defined as: “the total cost throughout its life including planning, design, acquisition and support costs and any other costs directly attributable to owning or using the asset" (Life cycle costing guideline, 2004). Life Cycle Costing adds all the costs of alternatives over their life period and enables an evaluation on a common basis for the period of interest. This enables decisions on acquisition, maintenance, refurbishment or disposal to be made in the light of full cost implications. http://www.academia.edu/7048164/cost_modelling

Practice of Cost Modelling applied in Green Building It is important that cost drivers are identified so that most management effort is applied to the most cost effective areas of the building. The techniques do not accurately predict the cost of occupying and operating the building over its life, but they do allow economic  judgements to be made between alternative technical solutions. Life costing should be carried out at different stages throughout the project from feasibility to detailed design stages. As the design progresses a more detailed LCC analysis can be undertaken by incorporating actual manufacturer‘s  cost and life expectancy data. http://www.academia.edu/7048164/cost_modelling

Further research

Sources to be researched "The Cost of Green Revisited: Reexamining the Feasibility and Cost Impact of Sustainable Design in the Light of Increased Market Adoption” Lisa Matthiessen, PeterMorris, DavisLangdon, 2007 http://www.davislangdon.com/USA/Research/ResearchFinder/2007-The-Cost-of- Green-Revisited Thisupdate tothepreviousreport(“CostingGreen:AComprehensiveCostDatabaseandBudgeting Methodology”) revisits the question of cost of green construction. Summary The report updates original building cost comparisons and examines both a larger sampling of buildings and additional building types. The report concludes that projects continue to achieve LEED standards within their established budgets, despite the recent dramatic rise in overall construction costs.

Sources to be researched “The Cost & Benefit of Achieving Green Buildings” Davis Langdon, 2007 http://www.davislangdon.us/ANZ/Research/Research- Finder/Info-Data-Publications/Info-Data-Green-Buildings Summary This report assesses the cost of achieving specific levels of green (using the Australian Green Star system) by comparing the budgets of green buildings to similar non-green buildings and concludes that there is a 3% to 5% premium for a 5-Star building, with an additional 5% for a 6-Star building. The report notes that standards in the country have been set so that reaching 4 Stars is usually easily achievable.

Sources to be researched “A Business Case for Green Buildings in Canada” prepared forIndustryCanada, 2005 http://www.cagbc.org/uploads/A%20Business%20Case%20for%20Green%20 Bldgs%20in%20Canada.pdf Summary This report focuses on initial and long-term financial implications of building green in Canada. It concludes that green buildings have a higher first cost, due to longer design times and use of “nonstandard” materials or systems, but that long- term cost benefits (money saved on energy, water, and so on) outweigh this first-cost premium.

Sources to be researched RIBA –ROYAL INSTITUTE BRITISH ARCHITECTS -PLAN OF WORK -PREPARATION TO USE