Terminology - O
Obsolescence
1. The loss in the intrinsic value of an asset due to its suppression.
2. The occurrence of decreasing value of physical equipment due to technological advance rather than physical deterioration. (ICWA)
OCPCA
Oil and Chemical Plant Contractors Association. (ACE)
OCPCA Norms
Standard man-hour norms for mechanical and electrical work developed and published by OCPCA. (ACE)
Off-Site Cost
The cost of services for the on-site plant, e.g. piped services, storage equipment, facilities such as workshops, offices, etc., demolition or resiting of existing material and spares. (ACE)
Off-Site Facilities
Auxiliary equipment and services located outside the battery limits of a production plant which provide support for the process units. (ACE)
Office Labour Report
Shows budget and weekly home office labour costs. (FLUOR)
Offsite Area
Embraces
1. Bulk storage area
2. Utilities area
3. Services area.
A location acquired for activities carried on outside battery limits. (ACE)
Offsite Facilities
Facilities located outside the BATTERY LIMITS which provide support for the process units. These include but are not limited to utilities, storage tankage, administration facilities, and the like. (FLUOR)
Offsites
Term relating to physical areas outside plant battery limits, usually containing utility services. (ACE)
Omnibus Fees
A lump-sum of money paid to a contractor to cover a portion of the total project. Usually includes fee, contingency, escalation, and office costs or portions thereof (FLUOR)
On Cost
Any add-on cost due to apportionment of indirect, burdens, overheads, profit, etc. (ACE)
or
Indirect charges added to direct expenditure to cover anticipated overhead expenses, based on the experience of previous activities. (ACE)
On Sites
Term relating to physical areas inside battery limits, usually containing process or production units. (ACE)
Onsite Cost
The expenditure on a producing unit which varies very little, if at all, with geographical location. (ACE)
Open Ended Cost
In terminate order or contract cost due to variable quantities, man-hours, unit rates, etc. (ACE)
Open Ended Order
Purchase or construction unit price or unit rate order based on unknown final quantities. (ACE)
Operating Cost
The expense of providing a service. (ICWA)
Operating Costs
Charges for labour, material and contracted services which can be assigned, or allocated to a specific manufacturing operation. (FLUOR)
Operating Labour
That portion of the man-power in processing areas which can be definitely assigned to one product or process area or cost centre. Usually excludes labour for maintenance, materials handling and packaging. (ACE)
Operating Overhead
The indirect cost incurred in processing areas engaged on production. (ACE)
Operating Statement
1. A report on a budget programme for a defined period.
2. A cost statement which is prepared in budgetary control and/or standard costing and which may provide, inter alia, quantitative, budget and standard data, and variances. (ICWA)
Operation Cost Centre
A department, location, item of equipment (or group of these) and/or persons which can be separately identified, to measure the expense of a specified part of a process. (ACE)
Opportunity Cost
The profits from alternative ventures that are foregone by using limited facilities for a particular purpose. (FLUOR)
Opportunity Costs
1. The profits from alternative ventures that are foregone by using limited facilities for a particular purpose.
2. The estimate of values which are foregone by undertaking one alternative instead of another one. Usually, the value of the less attractive alternative (ACE)
Optimistic Time Estimate (OT)
An estimate of the least possible amount of time an activity could require under the best possible conditions. (FLUOR)
Optimum Plant Size
Process equipment capacity representing the best balance between the economics of size and the cost of carrying excess capacity during the initial years of sale. (ACE)
or
The process equipment capacity, which represents the best balance between the economics of size and the cost of carrying excess capacity during the initial years of sale. (ACE)
or
The plant capacity which represents the best balance between the economics of size and the cost of carrying excess capacity during the initial years of sales. (FLUOR)
Order Of Magnitude Estimate
See FACTORED ESTIMATE (EMS)
or
A quick estimate of fixed investment obtained without flow sheet or detailed equipment analysis by applying factors, ratios, and escalation to the known cost of an installation considered to be similar. The least accurate of the estimate types, on which limits of accuracy can safely be applied. (FLUOR)
or
Term commonly used for very preliminary cost estimate prepared to an accuracy of the 30%. (also known as BALLPARK ESTIMATE, GUESSTIMATE, HORSEBACK ESTIMATE, SEAT-OF-THE-PANTS ESTIMATE, SCREENING ESTIMATE, etc.). (ACE)
or
An approximate forecast of fixed investment obtained without flow sheet or detailed equipment analysis by applying factors, ratios and escalation to published data or cost of a previous installation considered similar or by applying TURNOVER RATIO concepts. The least accurate of the estimate types, on which no confidence limits can reasonably be applied. (ACE)
Organisation Breakdown Structure (OBS)
The hierarchical definition of work responsibilities in terms of an organisational framework as opposed to a project structure. In form, it is identical to the WORK BREAKDOWN STRUCTURE. (FLUOR)
Original Budget
First authorised target for completion. (ACE)
Original Cost
The value of an asset before adjustment for depreciation or revaluation. (ACE)
Original Estimate
First authorised estimate. (ACE)
Other Cost
.
Out Work
Services performed away from the factory. (ACE)
Out-Of-Pocket Cost
An American expression sometimes used to denote a marginal expense. (ACE)
or
Term occasionally used in reference to a marginal expense. (ACE)
Over- or Under-Absorbed Overhead
The difference between the amount of absorbed indirect expenditure and the actual amount incurred. (ACE)
Over-run
Adverse variance from authorised amount. (ACE)
Overhead
1. The aggregate of indirect material cost, indirect wages and indirect expense. (ICWA)
2. Those costs in a manufacturing company which are not directly attributable to any one product or processing unit and which therefore must be allocated on some arbitrary basis believed to be equitable, or handled as a business expense part of which is independent of the volume of production.
3. Indirect expenses for various services which need to be allocated to particular projects. In the running of a workshop, for example the costs of heating and lighting the building, rent, rates and insurance need to be added to the actual direct cost in terms of labour and materials of the work produced. ON-COST is the term often given to the percentage applied to basic direct cost to cover indirect expenses of these types (ACE)
or
A cost or expense inherent in the performing of an operation, i.e., engineering, construction, operating or manufacturing, which cannot be charged to or identified with a part of the work, product or asset and therefore, must be allocated on some arbitrary basis believed to be equitable, or handled as a business expense independent of the volume of production. (FLUOR)
Overhead Absorption
The allotment of indirect expenditure cost units. (ACE)
Overhead Costs
Company expenses not directly allocable or chargeable to projects. (ACE)
Overhead Efficiency Variance
The portion of the indirect expenditure which is due to the difference between the budgeted efficiency of production and the actual efficiency attained. (ICWA)
Overhead Expense
See OVERHEAD COSTS
Overhead Hourly Rate
The apportionment of indirect expenses based on the hour unit. (ACE)
Overhead Variance
The difference between the standard indirect expenditure and the actual amount incurred. (ACE)
Overheads
Are defined as the cost of running Engineering Management Services, Ltd., and which is not directly chargeable against a specific project but is distributed over all projects. Items which represent overheads are Corporate Management, Marketing, Legal, Divisional Management and Building Costs. (EMS)
Overlap
The amount of time an activity may start prior to the completion of a predecessor. (FLUOR)
Overrun (OR)
An accounting condition such that the ACTUAL COST exceeds the VALUE OF WORK PERFORMED. See PROJECTED OVERRUN. Contrast with UNDERRUN. (FLUOR)
Overseas Expenses
The costs incurred in executing an export contract as distinct from domestic costs. The expenses which arise from the time when the goods are ready for exporting may include packing, shipping, freight, insurance, import duties, export credit guarantee, agents' fees, overseas taxes, installation supervision and training of indigenous personnel. (ACE)
Overtime
Hours worked in excess of defined normal time. (ACE)
or
Time worked over and above the basic hours laid down by agreement. (ACE)
1. The loss in the intrinsic value of an asset due to its suppression.
2. The occurrence of decreasing value of physical equipment due to technological advance rather than physical deterioration. (ICWA)
OCPCA
Oil and Chemical Plant Contractors Association. (ACE)
OCPCA Norms
Standard man-hour norms for mechanical and electrical work developed and published by OCPCA. (ACE)
Off-Site Cost
The cost of services for the on-site plant, e.g. piped services, storage equipment, facilities such as workshops, offices, etc., demolition or resiting of existing material and spares. (ACE)
Off-Site Facilities
Auxiliary equipment and services located outside the battery limits of a production plant which provide support for the process units. (ACE)
Office Labour Report
Shows budget and weekly home office labour costs. (FLUOR)
Offsite Area
Embraces
1. Bulk storage area
2. Utilities area
3. Services area.
A location acquired for activities carried on outside battery limits. (ACE)
Offsite Facilities
Facilities located outside the BATTERY LIMITS which provide support for the process units. These include but are not limited to utilities, storage tankage, administration facilities, and the like. (FLUOR)
Offsites
Term relating to physical areas outside plant battery limits, usually containing utility services. (ACE)
Omnibus Fees
A lump-sum of money paid to a contractor to cover a portion of the total project. Usually includes fee, contingency, escalation, and office costs or portions thereof (FLUOR)
On Cost
Any add-on cost due to apportionment of indirect, burdens, overheads, profit, etc. (ACE)
or
Indirect charges added to direct expenditure to cover anticipated overhead expenses, based on the experience of previous activities. (ACE)
On Sites
Term relating to physical areas inside battery limits, usually containing process or production units. (ACE)
Onsite Cost
The expenditure on a producing unit which varies very little, if at all, with geographical location. (ACE)
Open Ended Cost
In terminate order or contract cost due to variable quantities, man-hours, unit rates, etc. (ACE)
Open Ended Order
Purchase or construction unit price or unit rate order based on unknown final quantities. (ACE)
Operating Cost
The expense of providing a service. (ICWA)
Operating Costs
Charges for labour, material and contracted services which can be assigned, or allocated to a specific manufacturing operation. (FLUOR)
Operating Labour
That portion of the man-power in processing areas which can be definitely assigned to one product or process area or cost centre. Usually excludes labour for maintenance, materials handling and packaging. (ACE)
Operating Overhead
The indirect cost incurred in processing areas engaged on production. (ACE)
Operating Statement
1. A report on a budget programme for a defined period.
2. A cost statement which is prepared in budgetary control and/or standard costing and which may provide, inter alia, quantitative, budget and standard data, and variances. (ICWA)
Operation Cost Centre
A department, location, item of equipment (or group of these) and/or persons which can be separately identified, to measure the expense of a specified part of a process. (ACE)
Opportunity Cost
The profits from alternative ventures that are foregone by using limited facilities for a particular purpose. (FLUOR)
Opportunity Costs
1. The profits from alternative ventures that are foregone by using limited facilities for a particular purpose.
2. The estimate of values which are foregone by undertaking one alternative instead of another one. Usually, the value of the less attractive alternative (ACE)
Optimistic Time Estimate (OT)
An estimate of the least possible amount of time an activity could require under the best possible conditions. (FLUOR)
Optimum Plant Size
Process equipment capacity representing the best balance between the economics of size and the cost of carrying excess capacity during the initial years of sale. (ACE)
or
The process equipment capacity, which represents the best balance between the economics of size and the cost of carrying excess capacity during the initial years of sale. (ACE)
or
The plant capacity which represents the best balance between the economics of size and the cost of carrying excess capacity during the initial years of sales. (FLUOR)
Order Of Magnitude Estimate
See FACTORED ESTIMATE (EMS)
or
A quick estimate of fixed investment obtained without flow sheet or detailed equipment analysis by applying factors, ratios, and escalation to the known cost of an installation considered to be similar. The least accurate of the estimate types, on which limits of accuracy can safely be applied. (FLUOR)
or
Term commonly used for very preliminary cost estimate prepared to an accuracy of the 30%. (also known as BALLPARK ESTIMATE, GUESSTIMATE, HORSEBACK ESTIMATE, SEAT-OF-THE-PANTS ESTIMATE, SCREENING ESTIMATE, etc.). (ACE)
or
An approximate forecast of fixed investment obtained without flow sheet or detailed equipment analysis by applying factors, ratios and escalation to published data or cost of a previous installation considered similar or by applying TURNOVER RATIO concepts. The least accurate of the estimate types, on which no confidence limits can reasonably be applied. (ACE)
Organisation Breakdown Structure (OBS)
The hierarchical definition of work responsibilities in terms of an organisational framework as opposed to a project structure. In form, it is identical to the WORK BREAKDOWN STRUCTURE. (FLUOR)
Original Budget
First authorised target for completion. (ACE)
Original Cost
The value of an asset before adjustment for depreciation or revaluation. (ACE)
Original Estimate
First authorised estimate. (ACE)
Other Cost
.
Out Work
Services performed away from the factory. (ACE)
Out-Of-Pocket Cost
An American expression sometimes used to denote a marginal expense. (ACE)
or
Term occasionally used in reference to a marginal expense. (ACE)
Over- or Under-Absorbed Overhead
The difference between the amount of absorbed indirect expenditure and the actual amount incurred. (ACE)
Over-run
Adverse variance from authorised amount. (ACE)
Overhead
1. The aggregate of indirect material cost, indirect wages and indirect expense. (ICWA)
2. Those costs in a manufacturing company which are not directly attributable to any one product or processing unit and which therefore must be allocated on some arbitrary basis believed to be equitable, or handled as a business expense part of which is independent of the volume of production.
3. Indirect expenses for various services which need to be allocated to particular projects. In the running of a workshop, for example the costs of heating and lighting the building, rent, rates and insurance need to be added to the actual direct cost in terms of labour and materials of the work produced. ON-COST is the term often given to the percentage applied to basic direct cost to cover indirect expenses of these types (ACE)
or
A cost or expense inherent in the performing of an operation, i.e., engineering, construction, operating or manufacturing, which cannot be charged to or identified with a part of the work, product or asset and therefore, must be allocated on some arbitrary basis believed to be equitable, or handled as a business expense independent of the volume of production. (FLUOR)
Overhead Absorption
The allotment of indirect expenditure cost units. (ACE)
Overhead Costs
Company expenses not directly allocable or chargeable to projects. (ACE)
Overhead Efficiency Variance
The portion of the indirect expenditure which is due to the difference between the budgeted efficiency of production and the actual efficiency attained. (ICWA)
Overhead Expense
See OVERHEAD COSTS
Overhead Hourly Rate
The apportionment of indirect expenses based on the hour unit. (ACE)
Overhead Variance
The difference between the standard indirect expenditure and the actual amount incurred. (ACE)
Overheads
Are defined as the cost of running Engineering Management Services, Ltd., and which is not directly chargeable against a specific project but is distributed over all projects. Items which represent overheads are Corporate Management, Marketing, Legal, Divisional Management and Building Costs. (EMS)
Overlap
The amount of time an activity may start prior to the completion of a predecessor. (FLUOR)
Overrun (OR)
An accounting condition such that the ACTUAL COST exceeds the VALUE OF WORK PERFORMED. See PROJECTED OVERRUN. Contrast with UNDERRUN. (FLUOR)
Overseas Expenses
The costs incurred in executing an export contract as distinct from domestic costs. The expenses which arise from the time when the goods are ready for exporting may include packing, shipping, freight, insurance, import duties, export credit guarantee, agents' fees, overseas taxes, installation supervision and training of indigenous personnel. (ACE)
Overtime
Hours worked in excess of defined normal time. (ACE)
or
Time worked over and above the basic hours laid down by agreement. (ACE)
