- Cost engineering
Cost engineering is an area of engineering practice concerned with the "application of scientific principles and techniques to problems of cost estimating, cost control, business planning and management science, profitability analysis, project management, and planning and scheduling."
One key objective of cost engineering is to arrive at accurate cost estimates and schedules and to avoid cost overruns and schedule slips. The broad array of cost engineering topics represent the intersection of the fields of project management, business management, and engineering. Most people have a limited view of what engineering encompasses. The most obvious perception is that engineering addresses technical issues such as the physical design of a structure or system. However, beyond the physical manifestation of a design of a structure or system (for example, a building), there are other dimensions to consider such as the money, time, and other resources that were invested in the creation of the building. Cost engineers refer to these investments collectively as "costs".
Cost engineering then can be considered an adjunct of traditional engineering. It recognizes and focuses on the relationships between the physical and cost dimensions of whatever is being "engineered". Cost engineering is most often taught at universities as part of construction engineering, engineering management, civil engineering, and related curricula because it is most often practiced on engineering and construction capital projects. Engineering economics is a core skill and knowledge area of cost engineering.
Cost engineering is a field of engineering practice that began in the 1950s (AACE International was founded in 1956). The skills and knowledge areas of Cost Engineers are similar to those of Quantity Surveyors. AACE International is one of many international engineering organizations representing practitioners in these fields.
In 2006, AACE published the Total Cost Management (TCM) Framework which outlines an integrated process for applying the skills and knowledge of cost engineering (see References). This has also been called the world's first process for portfolio, program and project management.
- AACE International
- Building estimator
- Construction Estimating Software
- Cost overrun
- Optimism bias
- Quantity surveyor
- Reference class forecasting
- Value engineering
- ^ AACE International's Recommended Practice 11R-88, Required Skills and Knowledge of Cost Engineering, provides some answers which are excerpted here. Beyond being a guiding document for AACE International’s education and certification developments, 11R-88 is an excellent reference for industry core competency and career model development.
- Amos, Scott (editor), "Skills and Knowledge of Cost Engineering," Fifth Edition, AACE International, Morgantown, West Virginia, 2004.
- Humphreys, Kenneth K (editor), "Jelen's Cost and Optimization Engineering" 3rd Edition, McGraw-Hill, 1991.
- Hollmann, John K. (editor), "Total Cost Management Framework", AACE International, Morgantown WV, 2006.
- Dale Shermon, Systems Cost Engineering, Gower publishing, 2009, ISBN 978-0-566-08861-2
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