Cost Estimation Flashcards

What is 'green time' in the context of DP project cost management?

Answer: Productive operational time when work is progressing as planned with no downtime

Green time refers to on-hire productive hours when the vessel is actively accomplishing project scope, which estimators maximize to minimize cost per unit of output.

How does increasing water depth generally affect DP operational costs in deepwater projects?

Answer: It increases costs due to longer ROV umbilical requirements, extended pipe run times, and increased technical complexity

Deeper water demands longer ROV tethers, more complex rigging, slower work progression, and often more capable (expensive) vessels, all increasing total project cost.

In DP project scheduling, why is the 'critical path' particularly important for cost estimation?

Answer: It defines the sequence of activities that determines minimum project duration and therefore minimum vessel hire cost

Any delay on the critical path directly extends total project duration and vessel hire cost; non-critical path delays have schedule float that absorbs them without cost impact.

A client requires position accuracy of ±0.5m rather than the standard ±2.0m for a precision installation task. What is the most likely cost impact?

Answer: Increased cost due to more advanced sensor packages, tighter DP tuning, and slower work pace

Precision positioning demands DGPS and USBL integration, careful DP gain tuning, slower vessel movement, and extended installation time, all of which raise project cost.

What is 'schedule compression' and how does it typically affect DP project cost?

Answer: Accelerating the schedule by adding resources or working parallel activities, typically increasing unit costs

Schedule compression (crashing) adds resources, overtime, or parallel workstreams that cost more per unit of work, even though total duration decreases.

Which of the following best justifies including a 'management reserve' separate from contingency in a large DP project estimate?

Answer: It covers unknown unknowns — unforeseen events that could not be identified during risk planning

Management reserve is held at the organizational level to address completely unforeseeable events, distinct from contingency which addresses identified risks.

When comparing two DP vessels for cost efficiency on an identical scope, the estimator should primarily evaluate which combined metric?

Answer: Day rate versus expected operability (productive time ratio) given vessel capability and the project's environmental window

A cheaper vessel with lower operability may cost more overall than a higher-rate vessel that works through more weather windows; the productive day rate (day rate ÷ operability) is the true cost efficiency metric.