Cover: Cost Growth in New Process Facilities

Cost Growth in New Process Facilities

Published 1983

by Edward W. Merrow

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This paper describes the causes of cost misestimation for major process plants and speculates about why the estimation problem has been so resistant to resolution. The discussion is based on a substantial body of RAND work that developed methods for evaluating the cost, schedule, and performance of process plant projects. The paper details the approach to the analysis and how the model for analyzing the problem was developed. The last part of the paper discusses why the cost estimation problem has persisted, including difficulties in the estimating process and managerial obstacles to estimation accuracy.

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