Abstract :
It is widely admitted that estimated costs in general are subject to wide margins of error. Recognising this, accountants, acting in accordance with their normal principle of `prudence¿, often set aside substantial contingency allowances for the all too frequent event that the error on the original estimate is an overspend. Whilst contingency allowances may mitigate the consequences of what would otherwise be unexpected financial losses, this approach is no substitute for sharpening up the estimating procedures themselves. It is recognised that there are many pressures on estimators in companies, for instance in the short time period allowed to produce estimates for customers who want the information on the spot. Nonetheless, visits to many companies (specifically to consider tool estimating) show that the situation is frequently one where there is a minimum of organisation of the kind of information which could improve tool estimating. For instance, records on work which has been done in the past are often missing altogether, or are inadequately detailed¿these would be a valuable source of information when new tooling work could bear many features similar to work completed in the past. The newer ideas in estimating, such as the statistical techniques, have certainly not penetrated to the majority of estimating sections, though the use of these tends to be limited to the larger producers of tools. The paper considers some of these ideas for improving tool estimating procedures and suggests there is a need to improve the status of the activity by showing that there is a good case for increasing the training demanded for personnel operating as estimators.
