Question

PRACTICAL APPLICATION There are many opportunities for a practical experience in operations estimating Your instructor may suggest several. One possibility is to visit a contract production shop and interview the engineering manager responsible for cost analysis of the quo- tation procedure. Prepare a list of questions in anticipation of the visit. Be profession- al in the arrangements of the interview, and afterward write a report detailing the lessons that you have learned. Send them a courtesy letter expressing your thanks after the interview.

Answer 1

Step 1 - First we will understand the meaning of each important terms in the question

Estimation

• It is the process of taking out quantities and multiplying every item with its unit cost for determining the total cost of project
• Estimate is prepared before actual execution of project to get fair idea of cost that may be incurred
• Helps to make financial arrangement for the project before hand
• Helps to invite tenders for the proposed work

Quotation

• It is the detailed rate list submitted by the contracting firm to carry out the work or supply services in response to the request for quotation for proposed work advertised by execution firm
• Based on this cost analysis is done to select the suitable contracting firm for proposed work

Step 2 - Practical experience - Visiting a contract production shop & interviewing the engineering manager responsible for cost analysis of quotation procedure

First we will forward the letter of request to Authorities of production shop for conducting an interview with the concern person. we will forward them the objective of this interview & arrange the interview as per their schedule.

List of questions to be asked are as follows :

we will greet the members present, inform them about the objective of this interview and start.

Q1. First we will ask the details about their production shop like

• what products do your firm produce ?
• what are the stages involved in the production ?
• what are the process or products for which you require the services of another contracting firm ?

Q2. Then we will start with basic questions of quotation process which is generally called as tendering process

• How do you define quotation ?
• what are the details you provide in tender while inviting a quotation ?
• what are details required for preparing an effective quotation ?
• what are the documents to be submitted along with quotation ?
• what are the different modes of inviting a tender ?
• what are the different modes of submitting a quotation ?
• General timeline for inviting a tender to submission of quotation ?

Q3. Then we will questioned regarding cost analysis of quotation procedure

• what are the different cost heads you consider for preparing a quotation ?
• what source do you follow for quoting the material rate ?
• what source do you follow for quoting the labour wage rate ?
• what are the additional cost incorporated in quotation ?
• what are the different types of analysis done for preparing quotation ?
• how do you analyze the rate quoted is on par with current market value ?
• what is process & formalities once your quotation has been selected and you have been awarded the contract ?
• what are your response & feedback when your quotation is rejected ?
• finally what is the cost of preparing a quotation ?

Then we will finish the interview thanking them for their co-operation.

Step 3 - Things learnt from the interview

• we learned the general stages involved in the production process like preparing raw material, cleaning, manufacturing, finishing, packing, transportation etc
• we learned about the modes of inviting tender like advertising in newspaper, through personal mail etc
• details required for preparing quotation like products scope of work, specification, quality needed, time of completion of work etc
• Eligibility criteria for participating in the tendering process
• learned about the cost considered while quoting rates like material cost, labour cost, equipment cost, establishment charges, over head charges etc
• sources of rate for material & labour wage
• process after once contract is awarded
• we learned about the cost involved in preparing a quotation

Step 4 - We will send them a courtesy letter expressing thanks for interview

Date : 123

XYZ Production shop

Address

Subject : Thanking for the interview

Dear sir / madam,

With reference to the subject we would like to thank you for allowing us to conduct the interview with your production manager. We would like to thank for giving your valuable time and co-ordinating with us for fulfilling our objective.

It was great interviewing you and we have learned quite with the interview.Once again thank you

Yours faithfully,

ABC