Instructions: Please complete all 3 multi-part problems for this week's assignment.

2-1 Basic Estimating Problem
Please look at the Attached Excel sheet for answer for first problem only.

2-2 Three-point Estimate Problem (a)
Data: a = the best case estimate = $0.24/lb. m= the most likely estimate = $0.30/lb. b= the worst case estimate = $0.62/lb.
Answer: We have to determine the E-value: E = (a + (4*m) + b) /6 E = (0.24 + (4 * 0.30) + 0.62)/ 6 E = $0.34/lb. (b)
Data: a = the best case estimate = 37 tons m= the most likely estimate = 40 tons. b= the worst case estimate = 49 tons
Answer: We have to determine the E-value: E = (a + (4*m) + b) /6 E = (37 + (4 * 40) + 47)/ 6 E = 40.66 tons or 41 tons if you want to round it up.

(c) Using the estimates from 1 & 2, what is the expected cost for structural steel over the life of the project? ( 41 tons * 2000lbs.) = 82,000 lbs.
Therefore, the estimates would be: $0.34/lb * 82,000 lbs = $27,880 (d) Using the "Complex" three-point method, what is the expected cost for structural steel over the life of the project? Expected cost: $0.34/lb * 82,000 lbs = $27,880
Most optimistic cost: $0.24/lb * 74,000 lbs = $17,760
Most pessimistic cost: $0.62/lb * 98,000 lbs = $60,760
The final estimated cost for the material is: (($17,760 + (4 * $27,880) + $60,760))/6 = $31,673.33
2-3 Contingency Allowance Problem

(a) 1.50 ($80 + $3 + $6) + 1.20($7 + $5.5 + $6.5)+ 1.05($15 + $12 +$3.70+$1.50+$18) =$209.01 209 / 1000 = $0.21
(b)
$0.21 @ 150% markup (2.5 * $0.21) = $0.525 An additional 100% reseller mark-up would bring retail price to (2 * $0.525) = $1.05 which is bellow the target retail price for the new sandwich of $1.49, there will be a profit of $0.44. (c) I don’t quite understand this question, but from the above calculation shows that the cost per sandwich, $1.05, is bellow the target retail price for the new sandwich of $1.49, there will be a profit of $0.44. Therefore, the project should be approved.

(d)
Need to firm up estimates for order of magnitude and budget items, and revise estimates before project can proceed.