To use a leading estimate type
The Estimate types enable you to switch between top-down estimates and bottom-up estimates. Initially, project estimation is determined using a top down structure as detailed information of project costs is not available.
As a part of estimating, you create a feasible bid for your customer by calculating the approximate target standard cost for your project. You can use this cost amount to allocate the estimate for the required work or the departments involved.
To structure the estimate and use the level types, see To structure the estimate and To use level types.
Example
A customer requests for the approximate cost for a luxurious yacht. The shipyard evaluates the request for the quotation. The sales price is determined to be approximately EURO 65 million. The yacht must be built, using the expertise of the Project Management (PM) and the Construction department. The PM department is required for redesigning an existing CAD drawing of a ship, which costs EURO 9 million. The Construction department requires approximately EURO 50 million to build the yacht and a subcontractor is assigned for the yacht's decor.
Specify the following estimates in the Estimate Version session:
- Version: 1a Estimate Yacht
- Version amount: EURO 63 million
- Profit fee: EURO 3 million
- Management reserve: EURO 0 million
Note: The distributed amount is displayed as Euro 0 million and the undistributed amount as Euro 60 million.
Define an amount for TOP as EUR 60 million. The distributed amount is EUR 60 million.
The activity structure for building the ship:
- TOP = The Yacht
- 01 = Redesigning
- 02 = Building ship
- 03 = Decorating
01, 02, and 03 are linked as child activities to the TOP.
To structure the estimate and use the level types, see To structure the estimate and To use level types.