# W10_OAN_Company Estimating Template vs NPS Template

1. Problem Definition

In this week blog posting, Author want to compare company cost estimating template with US National Park services (NPS). Author will use Likert Scale / Compensatory method to compare both process.

1. Development of Feasible Alternatives

To make an estimate, the company already has a cost estimation template. But, most of our estimate are inaccurate, so there needs to be an improvement on the template.

Figure 1: Company Cost Estimating Template

The best fit with Company estimating process regarding to National Park Services is Class A estimating. The accuracy of Class A estimate is -5% to +15% as shown on figure 2.

Figure 2: NPS Template – Class A

1. Possible Solution

Based on both cost estimating template, author will compare NPS templates and compensatory method. For compensatory method, author determine the Likert scale using criteria on table 1.

Table 1: Likert Scale Criteria

After determine the likert scale and refer NPS cost estimation template, we can put each task with Likert value who meet with current condition of company in estimation process as shown on table 2.

Table 2: Company Estimating Template Using Likert Scale

1. Selection Criteria

We will perform a checklist of each stage proposed by NPS approach in the estimation template. If there are gap from the checklist and potentially to be fixed, it will be recommended to management to improve the estimation process.

1. Analysis and Comparison of the Alternatives

Based on the assessment of checklists in table 2, the authors calculate the average Likert value and we will see which attributes meet the NPS requirements and which have not.

Table 3: Calculation Result

Refer to table-3, only attribute – 3, 4 and 8 which already meet with NPS, the other step still reminds to consider highly and very highly implemented.

1. Selection and Preferred Alternatives

Based on above assessment and analysis, company must consider unimplemented step for a better and reliable estimating process, because 11 attribute purposed by NPS as one of best practice in estimating template.

1. Performance Monitoring and the Post Evaluation of Result

From Table 4, we can conclude which attribute has the biggest gap against NPS template.

Table 4: Gap

Using Pareto Diagram as shown on figure 3, Management can prioritize the improvement to meet NPS criteria on attribute 5, 7, and 10. By doing that, we can solve ± 60% of gap. After that, we can continue to improve next attribute. By using NPS Estimating Process as part of Company template, we can avoid under or over estimate, and make sure all the requirements are met.

Figure 3: Pareto Diagram

Refrences

1. Sullivan, William G., Wicks, Elin M. & Koelling, C. Patrick. (2014). Engineering Economy 16th edition Chapter 14 page 559- 617, England: Pearson Education Limited.
2. Cost Estimating Requirements Handbook National Park Service.
3. Module 08-1 Managing Cost Estimating & Budgeting
4. W9_MFO_Benchmark of Company Cost Estimating Template Process against NPS Template