Hello, everyone. I will be talking in this module about the Types of Cost Estimation. From an introductory level, from a big picture level, before we move forward with much more details in the Cost Estimation process. So let's start. All estimates are approximations. This is something very important that you need to understand. The approximations are based upon judgement and experience. So as we always state, experience, experience, experience. This is very important in cost estimation. Even final reported cost figures on completed projects will differ in detail from what the true costs really were. With a little bit of luck, deviations in costs, from different cost centers, will cancel each other out. Now, estimated must build the project on paper ,then assess the quantities. Not only of the contracted materials but also of the temporary materials. Such as form work and temporary plans being used for the projects. Also, estimators need to hypothesize alternative construction methods and determine the sources required by each method. Now there are different types of estimates, are required as the following. Conceptual & Preliminary estimate and Detailed estimate. From the conceptual and preliminary estimates, it happens prior to the engineering design completion. The conceptual estimate is useful in the schematic and the budgetary phase when design details are not available. The preliminary estimate, on the other hand, take place when the preliminary design is available, which is around 40% of the total design. Then, once the preliminary design is approved by the owner, the final, or the detailed design, is been accomplished. Detailed estimate is also prepared from completed plans and completed specifications, and we will talk about later in details. Now there are types of methods or tools been used in the conceptual and the preliminary estimates. And basically in this estimates, it tells us whether a project is anywhere near to being economically feasible. And this vary considerably from one type of construction project to another type. Examples of tools and methods, as I said, to perform conceptual and preliminary estimation are those four. There is a lot and you can find, from a practical point of view as well as from a theoretically point of view. But as you know from our specialization, we try to, as much as possible, covering both to show you what's already in books, as well as to cover speakers and people from the industry, what exactly the practical has been doing. So let's touch base on these four examples. From Cost Indices, Cost Capacity Factors, and I will talk through examples about the top two. And the Component Ratios, Parameter Costs, I'm going to go through them very quickly and just an introductory level. Cost indices, cost indices is a price of a total constant package of resources, construction resources, that serves as input to a typical construction project. The index is computed by dividing this cost, the cost of the index, by the cost of the resources in a base reference period. This will allow us to show changes of cost over time. So we have the cost of the package in one time and the cost of the package in another time. The cost index and the cost index here. So, again, what I was saying is looking at two different period of time, it will show us how the cost changed over time. Such changes are affected by technology, construction methods and techniques. New ones, for example, productivity, as well as inflation. Now, cost indices are published periodically and it’s been reprised in every period. Here in the US, it's been published by the Engineering News-Records, for example, ENR, and other publications. For example, we have the ENR Building Cost Index, or BCI, which is computed as following. We have, as I said, a constant package, and the constant package here are four components starting from lumber, structure steel, cement and labor. If we notice in this index, we do have a specific constant quantity of each of these four components. Like the lumber we have a specific 1,088 board feet of lumber and specific 2x4. And the prices we have here are for a 20-city average. Structure steel, the same thing. We have a specific constant amount and the cement and the labor. We have a specific number of hours for skilled labors and the 20-city average we have in the US, and then we sum it up and that will be your Building Cost Index. There are other cost indices that exist and can be used in a similar way. So, we have here the Building Cost Index, the BCI and we also, from ENR, we also have another example which is the, we call, construction cost index or CCI, not BCI. And the change between both of them, as I recall, is in the labor component. So that's the main difference between both. Of course indices can yield accuracy within, let's say, plus, minus 25% to 30% of the actual cost. Also, it can provide estimates information with almost negligible time and effort. And it is valuable for planning decisions very early in the life of a project. So let's take an example here.