PIREM: a new model for conceptual cost estimation

Abstract

A new conceptual construction cost estimating method, namely, Principal Item Ratios Estimating Method (PIREM), is presented. The proposed PIREM integrates several existing conceptual estimating methods (including parametric estimating, ratios estimating, and cost significant model) with advanced nonlinear mapping techniques, and adopts a scheme that separates unit prices with the quantities of a cost item. It allows estimators to estimate based on the prevailing unit prices in the marketplace, thus the fluctuation of prices can be reflected on a real‐time basis. Two comprehensive case studies were conducted for verification of PIREM. The demonstration case studies show that PIREM is able to provide accurate and the most updated estimates when advanced mapping technologies are incorporated.

Keywords:

• Conceptual cost estimation
• parametric estimation
• project planning
• nonlinear mapping