COST ENGINEERING Meaning and
Definition
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Cost engineering is a systematic process of managing and controlling the costs associated with a project or product. It involves the application of engineering principles, techniques, and methodologies to estimate, analyze, and control costs right from the initial planning stage to the completion and delivery of the project. The primary objective of cost engineering is to optimize the cost efficiency and effectiveness while maintaining the desired quality standards.
Cost engineering encompasses various activities, including cost estimating, cost analysis, cost control, value engineering, and optimization. It involves identifying the various cost components, analyzing their relationships and impacts, and developing methods to minimize costs without compromising the project's objectives.
In cost engineering, cost estimates are prepared using quantitative techniques and historical data. These estimates are continuously refined and updated throughout the project lifecycle to reflect any changes in scope, schedule, or resource requirements. Cost analysis is performed to assess the cost performance of the project, identify cost variances, and understand the reasons behind them.
Cost control involves monitoring the project's costs, comparing them with the budget, and taking corrective actions to ensure adherence to the planned costs. Value engineering is a systematic approach used in cost engineering to identify alternative solutions that offer the same or improved functionality while reducing costs. Optimization techniques are employed to find the most cost-effective solutions by balancing various factors such as cost, quality, time, and resources.
Ultimately, cost engineering aims to maximize the value delivered by a project or product, considering the cost constraints and stakeholders' expectations.
Etymology of COST ENGINEERING
The word "cost engineering" is composed of two components: "cost" and "engineering".
1. Cost: The word "cost" originated from the Middle English word "coste" which came from the Old French word "coste" meaning "expense". It ultimately traces back to the Latin word "constus" meaning "rib, side, or surface". Over time, "cost" evolved to refer specifically to the amount of money required to produce or acquire something.
2. Engineering: The term "engineering" comes from the Latin word "ingeniare" which means "to contrive, devise, or create". It is derived from the Latin word "ingenium" meaning "cleverness or talent". Originally, engineering referred to the application of scientific and mathematical principles to design and construct physical structures or systems.
