Financial Consideration for Portable Golf Vehicle Group Design - Assignment Example

Financial consideration Cost estimation can best predict the most probable cost of the specialized portable construction Golf vehicle. It is the most important management tool for planning during design phase of the project and it provide information about the project budget. Although all projects begin ideas, they end by filling the need. The cost is therefore very important to the owners and the fabricators .This project has been well designed so as to give workable and acceptable solutions. Cost estimation is a tool for determining the funds required and determining the cost of each item as well as the overall cost (Holm, 2005). The cost estimate has been prepared by breaking down all the items required and the cost of each item determined from the experience and the database of the accessible construction cost information (Ostwald, 2001). A cost estimate is different for project budget. A project budget includes the cost estimates and also ‘soft costs’. Soft cost will include design fees, license fees, and insurance. The budget will also include non-related costs like moving costs and fundraising. The finance and cost of the specialized portable golf vehicle will encompass the overall cost of design and manufacturing process. The design gives the blue print of all the parts of light-weight golf vehicle, for example, the cost of aluminum (Holm, 2005). In order to perform a better estimation, an estimator must have engineering knowledge and have experience. A background of construction technology is necessary so as to be able to breakdown into various components required and then price the different components with appropriate unit rates so as to obtain the total cost. Types of cost estimation Cost estimates can be categorized into parametric estimates and detailed estimates. They are defined as follows. Parametric estimate This is cost estimation of items using related and easy to determined parameters. For example kilowatts rating of the motor, size of aluminum sheet, etc (Sweeting, 1997). Detailed estimate This is a process of predicting the cost of a proposed construction project. This is done by breaking down pieces of construction in a logical base and in an orderly manner, and determining the cost of each item from existing database and experience, and making giving a summary of the total. The following equations are used in providing detailed estimates. Cost = Quantity × unit price Labour = Number of operations × unit hours (Sweeting, 1997) Number and timing The number of cost estimates needed will be contributed by project requirements as well as those of the owner which is linked to the project’s design phases. Generally, the cost estimation of the project dictates the timing and the number of the cost estimates, and can be categorized as follows: Pre-design phase Before the beginning of design, a cost model and budget cost plan for the project is prepared. The cost model establishes and defines the project budget. It also confirms the cost of the project as well as identifying any costs and work that has to be funded separately. Design development phase Special considerations and evaluation is made throughout the design phase against the pre-established cost model. This process enables integration of engineering process throughout the design phase. At the end of this phase a comprehensive cost estimates is produced. Accuracy The cost estimate is base on pricing and measurement of quantities wherever the information is given or reasonable assumptions is made. The cost estimation may not have control over the cost of materials, labor, equipments or the market conditions; the estimates of probable cost is based on the design, professional experience and represent the best judgment made on the project. It clear that the accuracy will depends on the various external factors, but it is expected to fall within 5% of the total estimated cost (Holm, 2005). Cost estimates in details Components Costs estimates have been broken down into various sections, referred to as components or elements. Component format has been used in this estimate. Components are basic parts of the project reflecting different parts of the systems performing specific functions. Brief description is made on each component to ensure that all relevant items have been included in the estimation (Ostwald, 2001). The structure and the body It includes aluminum sheets, supports structure etc. for framing and structural finish. The total cost of the complete structure includes all the necessary sheathing and the necessary fire proofing purpose. Wheels and tires- It include wheels and tires. Braking systems – Rear brake and cable assembly that can adjust automatically, equalizers, Pedal, brake cable and equalizer rode. It also includes accelerator pedal assembly and the accelerator rod. Steering, rear and front suspension – Steering column, steering wheel, front and rear suspension: upper and lower. Electrical system – Wiring, electrical component box, starter, battery, instrument panel components, motor control regulator, battery charger, controller and solenoid, reverse/ forward switch and run switch. Lubrication system – Oil and oil sensors for moving parts. Exterior cladding – Includes any non- structural finish color paint added to the structure for finishing and supports frame required for reinforcement and cushion seats. Waterproofing – Any finish surface or decorations Contingency and miscellaneous expenses – contingencies is reduced by consultation with the owner during design phase as the likelihood of the change in plan is reduced. Frequent change of the prices of components may also cause change of plan. Contingencies are allowed at a range of 5% to 10% of the total cost of the project. There also expenses that may not have been taken into account but is necessary for completion of the project. Labor and staff – Will include the payments for staff and finance administration. The summary of the components is shown in the table below. Finance and Costing Part (Components Description) Quantity Price $ Total $ The Structure and the Body Aluminum Sheets - 300 300 Supports Structure - 350 350 Rear Axles 1 169 169 Wheels and Tires 4 100 400 Braking System 1 179 179 Electrical System Wiring - 40 40 Electrical Components Box 1 260 260 Battery - 24V 2 100 200 Instrument Panel Components 1 130 130 Motor Control Regulator 1 90 90 Battery Charger 1 350 350 Controller and Solenoid 1 260 260 Reverse/Forward switch and Run switch 2 70 140 Exterior Cladding Finish, color paints, and belts - 390 390 Contingency and Miscellaneous expenses ~ 900 900 Labor and Staff ~ 2000 2000 Others Sun Canopies 1 200 200 Cassette Player 1 220 220 Cigarette or Cigars holders 1 30 30 Lighter 1 91 91 FM/AM Radio 1 250 250 Total 6949 Management of budget If the cost estimates is too high, the decision on the way forward will be guarded by the magnitude overrun. If the overrun is too high i.e. more than 5% of the total cost minor changes can only be made. But if the magnitude of the problem is high enough, the cost estimation will have to be evaluated by involving all parties associate with the project so as to come up with an alternative design. The team will put together an agreed design of the golf vehicle to meet the specified needs of the customer; this thus translates to the possibility of current unavailability of a specialized portable golf vehicle that could perfectly match the outlined needs (Dewey, 2000). References Holm L., 2005. Construction Cost Estimating: Process and Practices, Pearson Education, Limited Ostwald P. F., 2001. Construction cost analysis and estimating, prentice-Hall international series in civil engineering and engineering mechanics, Prentice Hall Dewey, D., 2000, Microeconomics: the analysis of prices and markets, New York, Oxford University Press. Sweeting J., 1997. Project cost estimating: principles and practice, Rugby, Warwickshire, UK: Institution of Chemical Engineers, pg 9 Read More