Using Pareto principle plus statistic methodology in establishing a cost estimating model

Previous experience and research indicated that the Pareto Principle (80/20 Principle) has been widely used in many industries to achieve more with less. The study described in this paper concurs that this principle can be applied to improve the estimating accuracy and efficiency, especially in design development stage of projects. In fact, establishing an effective cost estimating model to improve accuracy and efficiency in design development stage has been a subject, which has attracted many research attentions over several decades. For over almost 40 years, research studies indicate that using the 80/20 Principle is one of the approaches. However, most of these studies were built by assumption, theoretical analysis or questionnaire survey. The objective of this research is to explore a logical and systematic method to establish a cost estimating model based on the Pareto Principle. This paper includes extensive literatures review on cost estimating accuracy and efficiency in the construction industry that points out the current gap of knowledge area and understanding of the topical. These reviews assist in developing the direction for the research and explore the potential methodology of using the Pareto Principle in the new cost estimating model. The findings of this paper suggest that combining the Pareto Principle with statistical analysis could be used as the technique to improve the accuracy and efficiency of current estimating methods in design development stage.