Abstract
Cost estimation on the bidding phase is a crucial stage that determines the success of the Engineering, Procurement and Construction (EPC) project. If the cost offered to the client is too high then it could not compete with the other bidder, but if the cost offered are too low it can reduce profit margins and result in losses for the EPC companies. This paper describe the use of Back Propagation Neural Network method to help determine cost estimation. This method is applied specifically to determine control valve cost estimation on the bidding phase so that the retrieved costs will be accurate. When there is no technical and price quotation from vendors as well as the narrowness of the bidding processing time, this method can be an alternative choice to determine the price based on previous vendor quotation. In the future, this method could be developed and applied for other instrumentation equipment such as transmitter, switch, analyzer, control system and others to achieve total cost estimation of instrumentation equipment in EPC bidding proposal.
Highlights
Control valve is an instrumentation component that almost exist throughout the industrial plants mainly in the oil-gas industry and petro-chemical
Control valve cost estimation count as critical item because it is included in the list of major instrumentation equipment
Control valve cost estimation on a less appropriate bidding phase can lead to profit and loss of the project when it was already running
Summary
Control valve is an instrumentation component that almost exist throughout the industrial plants mainly in the oil-gas industry and petro-chemical. Control valve cost estimation on a less appropriate bidding phase can lead to profit and loss of the project when it was already running. Biddings which are carried out by Engineering, Procurement and Construction (EPC) companies often have a short time limit, between two to eight weeks for accumulation to the client. Their workflow to process control valve Request for Quotation (RFQ) takes about two to four weeks depending on the workload of each control valve vendor and evaluation of their engineering team. EPC estimators need a tools to make control valve cost estimation in a short time of bidding phase. The expected results of ANN system is to achieve a (one) 1 correlation coefficient value which means that estimated value is not much different with actual value, avoid overfitting cost estimation and give results of control valve cost estimation accurately
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