Research On Cost Control Of Real Estate Project Based On Target Cost

Real estate industry is very important in our country. It not only plays a very importantrole in the process of urbanization, but also can drive the development of many relatedindustry. Its position in the third industry of our country is extremely important. However,with the macro-control police according to real estate industry constantly issued, the realestate industry faces unprecedented pressure, the profit space has compressed constantly. So,how to control the cost of real estate project effectively in the use of advanced projectmanagement technology grandually becomes an important subject.The paper frist analysis the process of real estate project and the charactereristics of coststructure, point out that the cost control of real estate project not only in the constructionstage, but also in the whole process of the real estate project, including investment decisionstage, planning design stage and construction stage.The paper based on the theory system of target cost management, discusses the costcontrol of the whole process in the real estate project with the target cost management. Inthe aspects of target cost management, the paper according to analysis the charactereristicsof the real estate project firstly, forecast and sure the target cost. Then, decompositions thetarget cost in “four aspects”, respectively is the aspect of cost construct, the aspect of workbreakdown structure, the aspect of organization breakdown structure and the aspect ofprogress. Through to the decomposition of target cost, it can implement effectively, do goodbase for the control of target cost.In the aspect of target cost control, the paper maily breaks the real estate project into twostages, which is prophase stage and project construction stage. The prophase stage includingthe investment decision stage and the planning design stage. The paper uses goalprogramming method and value engineering method in the two stages respectively. In thestage of project construction, the paper manily analysis the shortage of the traditional earnedvalue method in project management, put forward the important role of multi-level earnedvalue method in target cost management, and apply it into taget cost control of real estateproject. In the process of target cost control which takes use of multi-level earned valuemethod, the paper analysis the cost deviations which possible appear in different categories,discusses the reasons of deviations which appear. The paper also discusses the methods howto solve these problems. The paper makes the target cost control of real estate projectbecomes a dynamic process.