7/28/2019 How to Estimate the Cost of Material

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7/28/2019 How to Estimate the Cost of Material

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Procurement of permanent and temporary materials Labor needed for setting up the materials Equipment necessary for shifting and installing materials Other consumables, eg. Fuel and tools

Material costs

In general, the amount of purchase = the unit price, which is recognized as quantity discount

Freight cost should be taken into consideration and included in the direct cost of the materials. This is

very important if the site location is very distant from nearby suppliers.

Other concerns for material procurement:

Quantity discount Interest rate Escalation Holding cost Credit facility Allowance for method of measurement of the bill item

Material Pricing basis

Resources of pricing information:

Published resources Building Cost Indices Company Cost records an in-house record of accurate documenting and compiling company

cost from earlier jobs

Vendor catalogues and quotations prices are acquired directly from vendors from cataloguesor indirect inquiries

While Upon assembling prices from vendor, the following points must be taken into consideration:

Payment requirements cash, credit, credit term Delivery charges Lead time, product availability Price guarantee Quantity discount information Price rise clause