Completion Cost Trend Analysis

Book excerpt: In 1976 Gordon J. Davis wrote an article in Machine Design which described a method to predict project completion costs. Davis established a spreadsheet with accompanying chart that showed the relationship between the estimated cost at completion with the spreadsheet generated predicted cost at completion. This method was to be used by project engineers to identify cost control problems in a project. Davis stated in his article that by analyzing periodic cost reports, the manager is at a disadvantage in that the reports are always lagging behind the actual progress of the project. His entire premise is that a new method must be instituted so that future costs can be forecasted and efforts undertaken prior to the escalation of a negative situation. Keywords: Cost analysis; Cost estimates; Predictions. (CP).