Abstract:
This study investigates whether all expected costs over the life cycle of
metallurgical research projects are included in initial, normal and final cost
estimates, and whether these costs are managed throughout a project’s
life cycle since there is not enough emphasis on the accurate estimation of
costs and their management over the life cycle of metallurgical research
projects. The study also determines during which phase of the life cycle
of metallurgical research projects’ costs are normally determined, during
which phase most of the costs are incurred, and during which phase
costs are managed. Project life cycles, techniques of cost estimation and
cost management are examined. A survey was used to gather information by means of face-to-face and
telephonic interviews, as well as an electronic questionnaire. The total
population of entities in South Africa that conduct metallurgical research
projects is small, numbering only 12 in all. The ten entities that conducted
the largest metallurgical research projects in terms of average size were
selected for this study. The conclusion drawn from the survey was that all costs over the life
cycle of metallurgical research projects are not taken into account in the
initial cost estimate of a project. Costs are mainly managed during the
growth phase of a project and not during the introduction phase, when
80% of the costs are normally committed. The implication of this is that
cost estimates for metallurgical research projects may not be accurate
and costs are not necessarily managed properly throughout the life cycle
of such projects. This may lead to cost overruns of project budgets,
project budgets being depleted before the delivery stage and research
sections running at a loss.
