A Practical Approach for Ship Construction Cost Estimating

To succeed commercially, shipyards must be able to accurately estimate costs. Cost estimating is necessary for the bid process, for change orders, and for trade-off studies. Numerous cost estimating approaches exist. They are based on extrapolations from previously-built ships, detailed bottoms-up parametrics, and integrated physics-based analyses. Cost estimating can be frustrating to shipyard personnel. Cost estimators may lack timely technical information and face data inconsistencies. Ship engineers and naval architects commonly lack feed-back on the cost consequences of their technical decisions. Managers often lack information denoting the level of confidence in cost estimates upon which they must make business decisions. Finally, many approaches to cost estimating are mysterious and not formally validated (each cost estimator has his own black book), complicated (too time consuming to be of use to decision makers), or difficult to use (steep learning curve). This paper presents an approach that is simple, yet enables instant sharing of cost and technical data among ship engineers, naval architects and cost estimators; gives confidence measures to managers; and is user friendly. The approach is based on several years’ development work in support of shipyard engineers, naval architects, and cost estimators.