Page 295 - Industrial Process Plant Construction Estimating and Man Hour Analysis

Appendix B 275

Expected profit is defined as
profit ¼ Bp Ce
∗
expected profit ¼ P Bp Ceð Þ
where

Bp¼bid price
Ce¼estimated cost
P¼probability of event (Bp Ce), 0<¼Prob<¼1

Capture rate

The capture rate is defined as
∗
capture rate ¼ CsÞ= C i 100,percent
ðÞ
ð
where Cs¼cost estimates that are successful

Moving averages. Smoothing of time series
Given a set of numbers

Y1,Y2,…
define a moving average of order N to be given by the sequence of arithmetic
means:

Y1 + Y2 + ⋯ +Yn=n,Y2 + Y3 + ⋯ +yn=n,Y3 + Y4 + ⋯ +yn=n,…
The sums in the numerators are moving totals of order n

Estimation of moving averages

The average of n most recent observations, computed at time t, is given by
Ma ¼ yt + yt 1+ ⋯ +yt n+1=n
where
Ma¼moving average of response variable
y¼data, labor, cost, price, etc.
t¼unit of time, years, months, etc.
n¼denominator of group of time units

Exponential smoothing
Formula:
∗ ∗
ð D SÞ +F 1 sðð ÞÞ