Estimating Methodologies - Engineering

Definition

A detailed build up cost estimate whereby material, labor, etc. are identified into the lowest definable process or component level.

When used

After prototypes are built and tested. When the production facility is being set up for actual production and/or while in low volume production.

Method

• The system is broken down from the highest to the lowest level element. This is called Work Breakdown Structure (WBS) or Cost Element Structure (CES).
• At the lowest level, the cost is determined by analogy, parametric, or actual cost methodologies.