Cost Estimation Flashcards
7 cards from real DPO practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Cost Estimation flashcards as text
What is the primary purpose of including a 'contingency reserve' in a DP project cost estimate?
Answer: To cover identified risks with uncertain probability or impact that could affect cost
Contingency reserves address known unknowns — identified risks whose likelihood or cost impact cannot be precisely predicted at estimate time.
In DP project budgeting, 'spread cost' refers to:
Answer: The combined daily cost of all vessels, equipment, and personnel required for the operation
Spread cost is the total daily expenditure for the complete offshore operation including support vessels, dive systems, ROVs, and all personnel.
A DP operator notices the vessel is using 30% more fuel than the baseline estimate during operations. Which corrective action has the most direct positive impact on cost?
Answer: Optimizing heading to minimize environmental loading on the vessel
Heading optimization aligns the vessel's lowest drag profile to the dominant environmental force, reducing required thruster output and fuel burn.
How does crew change cost factor into a long-duration DP project budget?
Answer: It includes helicopter or boat transfers, accommodation, and travel time that occur at regular rotation intervals
Crew change logistics — helicopter flights, vessel transfers, and shore-side accommodation — are recurring costs that must be built into the project schedule and budget.
Which of the following best describes an 'opportunity cost' when selecting a DP vessel for a project?
Answer: The revenue lost because the selected vessel is unavailable for other work during the project
Opportunity cost represents the foregone alternative use of the vessel or capital, which project managers consider when evaluating vessel selection against market alternatives.
When a DP incident results in unplanned excursion from position, what is typically the most significant cost consequence?
Answer: Potential damage to subsea infrastructure, lost production, and re-mobilization costs
A drive-off or drift-off can cause catastrophic damage to risers, umbilicals, or wellheads, resulting in costs far exceeding the original project value.
What is a 'lump-sum turnkey' contract structure in the context of DP operations cost risk?
Answer: The client pays a fixed total price and the contractor absorbs cost overruns
Under a lump-sum turnkey contract the contractor guarantees delivery for a fixed price, assuming all schedule and cost risk beyond defined force majeure events.