A ROM Estimate Is Typically Developed By Establishing A Cost Per Usable Unit From Past Projects And Multiplying This Cost By:A. The Numerical Index For The RegionB. The Weighted Average Of All Past Costs Associated With This Type Of StructureC. The

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Introduction

A ROM (Rough Order of Magnitude) estimate is a preliminary cost estimate used in the early stages of a project to provide a rough estimate of the project's cost. It is typically developed by establishing a cost per usable unit from past projects and multiplying this cost by a specific factor. In this article, we will discuss the factors that are used to develop a ROM estimate and how they are applied.

Understanding ROM Estimates

A ROM estimate is a preliminary cost estimate that is used to provide a rough estimate of the project's cost. It is typically used in the early stages of a project, when there is limited information available. The ROM estimate is used to provide a high-level estimate of the project's cost, which can be used to determine whether the project is feasible and to identify potential cost savings.

Factors Used to Develop a ROM Estimate

There are several factors that are used to develop a ROM estimate. These factors include:

  • Cost per usable unit: This is the cost of a single unit of a project, such as a building or a piece of equipment. The cost per usable unit is typically established by analyzing the costs of past projects.
  • Numerical index for the region: This is a factor that is used to adjust the cost per usable unit for the specific region in which the project is located. The numerical index for the region takes into account the local costs of labor, materials, and other factors that can affect the project's cost.
  • Weighted average of all past costs associated with this type of structure: This is a factor that is used to adjust the cost per usable unit for the specific type of structure being built. The weighted average of all past costs associated with this type of structure takes into account the costs of past projects that are similar to the current project.

How to Develop a ROM Estimate

To develop a ROM estimate, the following steps are typically followed:

  1. Gather data: Gather data on the costs of past projects that are similar to the current project.
  2. Establish the cost per usable unit: Establish the cost per usable unit by analyzing the costs of past projects.
  3. Determine the numerical index for the region: Determine the numerical index for the region by analyzing the local costs of labor, materials, and other factors that can affect the project's cost.
  4. Determine the weighted average of all past costs associated with this type of structure: Determine the weighted average of all past costs associated with this type of structure by analyzing the costs of past projects that are similar to the current project.
  5. Multiply the cost per usable unit by the numerical index for the region and the weighted average of all past costs associated with this type of structure: Multiply the cost per usable unit by the numerical index for the region and the weighted average of all past costs associated with this type of structure to develop the ROM estimate.

Example of a ROM Estimate

To illustrate how a ROM estimate is developed, let's consider an example. Suppose we are building a new office building and we want to develop a ROM estimate for the project. We gather data on the costs of past office building projects and establish the cost per usable unit as $100 per square foot. We determine the numerical index for the region as 1.2, which takes into account the local costs of labor, materials, and other factors that can affect the project's cost. We also determine the weighted average of all past costs associated with this type of structure as 1.5, which takes into account the costs of past office building projects that are similar to the current project. We multiply the cost per usable unit by the numerical index for the region and the weighted average of all past costs associated with this type of structure to develop the ROM estimate.

Conclusion

In conclusion, a ROM estimate is a preliminary cost estimate that is used in the early stages of a project to provide a rough estimate of the project's cost. It is typically developed by establishing a cost per usable unit from past projects and multiplying this cost by a specific factor. The factors used to develop a ROM estimate include the cost per usable unit, the numerical index for the region, and the weighted average of all past costs associated with this type of structure. By following the steps outlined in this article, you can develop a ROM estimate for your project.

References

  • American Institute of Architects (AIA). (2020). AIA National Guidelines for Cost Estimating.
  • Construction Industry Institute (CII). (2019). Cost Estimating Guidelines.
  • Project Management Institute (PMI). (2020). A Guide to the Project Management Body of Knowledge (PMBOK Guide).

Frequently Asked Questions

  • What is a ROM estimate? A ROM estimate is a preliminary cost estimate used in the early stages of a project to provide a rough estimate of the project's cost.
  • How is a ROM estimate developed? A ROM estimate is developed by establishing a cost per usable unit from past projects and multiplying this cost by a specific factor.
  • What factors are used to develop a ROM estimate? The factors used to develop a ROM estimate include the cost per usable unit, the numerical index for the region, and the weighted average of all past costs associated with this type of structure.
    A ROM Estimate: Frequently Asked Questions =====================================================

Q: What is a ROM estimate?

A: A ROM (Rough Order of Magnitude) estimate is a preliminary cost estimate used in the early stages of a project to provide a rough estimate of the project's cost. It is typically used to determine whether a project is feasible and to identify potential cost savings.

Q: How is a ROM estimate developed?

A: A ROM estimate is developed by establishing a cost per usable unit from past projects and multiplying this cost by a specific factor. The specific factor used to develop a ROM estimate can vary depending on the project and the organization.

Q: What factors are used to develop a ROM estimate?

A: The factors used to develop a ROM estimate include:

  • Cost per usable unit: This is the cost of a single unit of a project, such as a building or a piece of equipment.
  • Numerical index for the region: This is a factor that is used to adjust the cost per usable unit for the specific region in which the project is located.
  • Weighted average of all past costs associated with this type of structure: This is a factor that is used to adjust the cost per usable unit for the specific type of structure being built.

Q: What is the purpose of a ROM estimate?

A: The purpose of a ROM estimate is to provide a rough estimate of the project's cost in the early stages of the project. This allows the project team to determine whether the project is feasible and to identify potential cost savings.

Q: How accurate is a ROM estimate?

A: A ROM estimate is not a precise estimate of the project's cost. It is a rough estimate that is used to provide a high-level estimate of the project's cost. The accuracy of a ROM estimate can vary depending on the project and the organization.

Q: Can a ROM estimate be used for budgeting purposes?

A: A ROM estimate can be used as a rough guide for budgeting purposes, but it should not be used as the final budget for the project. A more detailed estimate should be developed later in the project to provide a more accurate estimate of the project's cost.

Q: How often should a ROM estimate be updated?

A: A ROM estimate should be updated regularly as the project progresses. This will help to ensure that the estimate remains accurate and that any changes to the project scope or schedule are reflected in the estimate.

Q: Who is responsible for developing a ROM estimate?

A: The responsibility for developing a ROM estimate can vary depending on the organization and the project. Typically, the project manager or the cost estimator is responsible for developing a ROM estimate.

Q: What are the benefits of using a ROM estimate?

A: The benefits of using a ROM estimate include:

  • Early identification of potential cost savings: A ROM estimate can help to identify potential cost savings early in the project.
  • Improved project feasibility: A ROM estimate can help to determine whether a project is feasible and whether it is worth pursuing.
  • Better budgeting: A ROM estimate can provide a rough guide for budgeting purposes and help to ensure that the project stays within budget.

Q: What are the limitations of a ROM estimate?

A: The limitations of a ROM estimate include:

  • Lack of precision: A ROM estimate is not a precise estimate of the project's cost.
  • Limited scope: A ROM estimate typically only includes a high-level estimate of the project's cost and does not take into account all of the costs associated with the project.
  • Dependence on assumptions: A ROM estimate is often based on assumptions and may not reflect the actual costs associated with the project.