Introduction
The course provides an introduction to different methods for cost estimation and handling uncertainty related to the estimate.
Content
The purpose of this course is to provide students with a theoretical and practical approach to the field of cost estimation. The subject is intended as a supplement to subjects such as contract strategy, contract completion and implementation, and project management. Cost estimation is relevant to all types of businesses and organizations and is an essential theme through all phases of the life cycle of a project. Estimate of investment costs is an important element in the decision whether a company will sanction a potential project. Cost estimation is part of the project budgeting process, the control phase of the project, implementation and is decisive for contracting in relation to procurement. The course aims to provide students with insights into various forms of cost estimates, different methods of cost estimation, and analysis and management of uncertainty and risk associated with cost estimates. Fundamental underlying drivers behind cost overruns are also a key issue.
Learning outcome
Knowledge
After completing the course, students will:
- Have a broad understanding of key concepts, principles, and approaches used in project cost estimation.
- Be familiar with typical sources of cost uncertainty and factors that influence capital expenditure in projects.
- Understand the role of cost estimation in early project planning, evaluation, and decision-making.
Skills
After completing the course, students will:
- Be able to apply general estimation approaches to structure and discuss CAPEX estimates at different levels of definition.
- Be capable of interpreting project information and using it to develop, assess, or justify preliminary cost estimates.
- Have the ability to reflect on the reliability and limitations of various estimation approaches in practical project settings.
General Competence
After completing the course, students will:
- Be able to evaluate CAPEX estimates in relation to project scope, assumptions, and uncertainty.
- Demonstrate an understanding of how cost estimation interacts with project governance, risk, and strategic decision processes.
- Be prepared to communicate estimation results and considerations in a professional and responsible manner.
Required prerequisite knowledge
None
Recommended prerequisites
Basic knowledge of contract completion and implementation, project management, mathematics, statistics and use of spreadsheets.
Exam
Written exam
Weight 1/1
Duration 4 Hours
Marks Letter grades
Aid Basic calculator
Digital exam administered only in English. Allowed aids: simple handheld calculator.
Coursework requirements
Mandatory assignment
The mandatory assignment must be approved in order to be allowed to take the exam. If the assignment is not approved, the student cannot take the exam. Students who retake the course do not need to redo the mandatory assignment, provided that it has been approved in an earlier iteration of the course. Generative AI tools may be used for the mandatory assignment. A "Self-declaration form for the use of AI tools" is not used in the course.
Method of work
Lectures are held in English.
Open for
Admission to Single Courses at Master Level at the Faculty of Science and Technology
Industrial Economics - Master
Industrial Economics - Master
Industrial Asset Management - Master
Exchange programme at The Faculty of Science and Technology
Admission requirements
Must meet the admission requirements of one of the study programmes the course is open for.
Course assessment
The faculty decides whether early dialogue will be held in all courses or in selected groups of courses. The aim is to collect student feedback for improvements during the semester. In addition, a digital course evaluation must be conducted at least every three years to gather students’ experiences.
The course description is retrieved from FS (Felles studentsystem). Version 1