Feasibility Estimates

Feasibility Estimates

This level of conceptual estimate is more refined than the order-of-magnitude estimate and should
provide a narrower range for the estimate. These estimates, if performed carefully, should be within ±20
to 30%. To achieve this increase in accuracy over the order-of-magnitude estimate requires substantially
more effort and more knowledge about the project.

Plant Cost Ratio

This method utilizes the concept that the equipment proportion of the total cost of a process facility is
about the same, regardless of the size or capacity of the plant, for the same basic process. Therefore, if
the major fixed equipment cost can be estimated, the total plant cost can be determined by factor
multiplication. The plant cost factor or multiplier is sometimes called the Lang factor (after the man
who developed the concept for process plants).

Floor Area

This method is most appropriate for hospitals, stores, shopping centers, and residences. Floor area must
be the dominant attribute of cost (or at least it is assumed to be by the estimator). There are several
variations of this method, a few of which are explained below.

Total Horizontal Area

For this variation, it is assumed that cost is directly proportional to the development of horizontal surfaces.
It is assumed that the cost of developing a square foot of ground-floor space will be the same as a square
foot of third-floor space or a square foot of roof space. From historical data, a cost per square foot is
determined and applied uniformly to the horizontal area that must be developed to arrive at the total cost.