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Estimating Purchasing and Cost Control - Essay Example
Engineering and Construction
Pages 7 (1757 words)
Cost management is an integral part of financial control and management in any for profit and non-profit organisation.The same applies particularly to the engineering and construction sector in which the huge amounts of financial and other resources pumped must be accounted for stakeholders …
Cost management is an integral part of financial control and management in any for profit and non-profit organisation, notwithstanding the industry or sector. The same applies particularly to the engineering and construction sector in which the huge amounts of financial and other resources pumped must be accounted for to stakeholders such as the government, project funders and the public/customers.Unfortunately, for various reasons, many countries’ construction sectors lag behind in the use of cost control techniques such as the Cost Value Reconciliation (CVR) and Earned Value (EV), two rather common methods of cost control. Many a stakeholder cites the technical skills and the huge resources required as the reasons many constructions firms and financial managers do not apply CVR in their cost control practices. Most affected by the cost and skill requirements of CVR and other cost control techniques such as CVR and Earned Value (EV) are the small and medium-sized construction and engineering firms that lack the wherewithal to design and implement these techniques of cost control. The other reason for the little use of cost control techniques such as CVR and EV is the apparent lack of literary coverage and information on these methods, implying that stakeholders are not quite conversant with the metho.Nonetheless, these methods are generally used in the construction and engineering industry to measure and monitor project progress, profitability and performance for their strengths. ...