CMC Case Question 4

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CMC Case Question 4

The case provided by Kerzner (2013) evinces that Concrete Masonry Corporation (CMC) based its cost estimates on the top-down costing framework. The top-down cost estimation approach entails measuring a project’s costs by estimating the inputs that go into each part of the job from information or project pricing knowledge from previous similar projects. Expert judgment and experiences of individuals involved in cost estimations can also form the basis for top-down cost estimates. At CMC, the estimator would feed the cubic feet and span of the prestressed concrete needed into the computer that generated the cost predictions (Kerzner, 2013). This provided an effective approach to cost estimations as the influence of production and sales personnel would not be introduced in the estimator. As Exhibit II shows, the information used for top-down cost estimation at CMC came from labor history, expert judgment, material cost projections, experience, and annual planning. I think that CMC developed project budgets for each of its projects based on the same model.

References

Kerzner, H. R. PhD. (2013). Case: Concrete Masonry Corporation (CMC). In Meredith, J. R., & Mantel Jr, S. J. (2011). Project Management: A Managerial Approach: A Managerial Approach. John Wiley & Sons.