Hierarchy probability cost analysis model incorporate MAIMS principle for EPC project cost estimation

Two new types of hierarchy probability cost analysis (HPCA) model incorporating money allocated is money spent (MAIMS) principle based on definite work breakdown structure (WBS) level for EPC (engineering, procurement and construction) projects are presented. The proposed models have skillfully solved dilemma to appropriate cost elements and maximize the efficiency of information for cost risk analysis. Macroscopic and microscopic risk analysis of the project cost elements are introduced for meaningful model input. The illustration of an actual bidding EPC project substantiates that proposed integrating HPCA-hierarchy MAIMS models have demonstrated effective and viable for EPC projects.

Research highlights► The trap to use lower and lower level cost elements is analyzed. ► Appropriate cost elements and maximize the efficiency of cost information are dilemma. ► Hierarchy Probability Cost Analysis models for project with WBS level-3 is proposed to solve it. ► Models avoid the impact of high number of cost elements and maximizes efficiency of experts’ judgment. ► More realistic and executable estimates can be developed by adopting reasonable hierarchy cost data.