IDEAS home Printed from https://ideas.repec.org/p/sip/dpaper/04-005.html
   My bibliography  Save this paper

Cost Contingency as the Standard Deviation of the Cost Estimate for Cost Engineering

Author

Listed:
  • Geoffrey Rothwell

    (Department of Economics, Stanford University)

Abstract

Traditional cost contingency estimation relies heavily on expert judgment based on various cost-engineering standards. This paper compares project stages, accuracy ranges, and cost contingencies recommended by the Association for the Advancement of Cost Engineering International and the Electric Power Research Institute. It shows that current guidelines are consistent with contingencies equal to the standard deviation of the cost estimate. It suggests how this standard deviation can be derived from a confidence level (e.g., 80%) for a given accuracy (e.g., ±10%) for normal and lognormal probability distributions.

Suggested Citation

  • Geoffrey Rothwell, 2004. "Cost Contingency as the Standard Deviation of the Cost Estimate for Cost Engineering," Discussion Papers 04-005, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:04-005
    as

    Download full text from publisher

    File URL: http://www-siepr.stanford.edu/repec/sip/04-005.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cabrera-Palmer, Belkis & Rothwell, Geoffrey, 2008. "Why is Brazil enriching uranium?," Energy Policy, Elsevier, vol. 36(7), pages 2570-2577, July.
    2. Geoffrey Rothwell, 2005. "Can the Modular Helium Reactor Compete in the Hydrogen Economy," Discussion Papers 05-001, Stanford Institute for Economic Policy Research.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sip:dpaper:04-005. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anne Shor (email available below). General contact details of provider: https://edirc.repec.org/data/cestaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.