Pm592 Week5

project requires the use of structural steel in several tasks over the 12 month period expected to complete the work. Based on recent experience the most likely price for the material is $0.30/lb. There are, however, price fluctuations over time based on suppliers used and structural steel availability. The most optimistic price estimate is $0.24/lb., and the most pessimistic estimate is $0.62/lb. A

Use the three-point estimating process to determine the expected price of the material.

Answer:

Data: a = the best case estimate = $0.24/lb.

m= the most likely estimate = $0.30/lb.

b= the worst case estimate = $0.62/lb.

Next: We have to determine the E-value:

E = (a + (4*m) + b) /6

E = (0.24 + (4 * 0.30) + 0.62)/ 6

E = $0.34/lb

(b) In addition to price fluctuations, it is also uncertain how much of structural steel will be required for the project. Design uncertainties and waste at the project site will affect the amount of structural steel actually needed. The most likely amount required is 40 tons. However, as little as 37 tons and as much as 49 tons might be required. One ton = 2000 lbs.

Use the three-point estimating process to determine to determine the expected amount of structural steel needed for the project?

Answer:

Data: a = the best case estimate = 37 tons

m= the most likely estimate = 40 tons.

b= the worst case estimate = 49 tons

Then determine the E-value:

E = (a + (4*m) + b) /6

E = (37 + (4 * 40) + 47)/ 6

E = 40.66 tons

(c) Using the estimates from 1 & 2, what is the expected cost for structural steel over the life of the project?

Answer: ( 41 tons * 2000lbs.) = 82,000 lbs This means that the estimates would be: $0.34/lb * 82,000 lbs = $27,880

(d) Using the "Complex" three-point method, what is the expected cost for structural steel over the life of the project?

Check answers:

Expected price = $0.34 per pound

Expected usage = 41 tons

Expected total cost (simple method) = $28,153...