Project duration based upon lump sum cost
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From: rbwillis on 19 Feb 2010 01:28 Hello, I am a consultant who works on lump sum projects. I would like to use MS Project to calculate project durations and Gantt charts based upon resources (and associated bill rates) combined with their work allocation percentage. I've tried several times to make this work and have even tried to make my own custom fields but can't seen to get all the pieces / formulas to work out. Can anyone tell me if this should be possible w/o resorting to custom VBA programming? Thank you!
From: Rob Schneider on 19 Feb 2010 02:59 What you are trying to do is what Project is designed to do. Before getting into a long discussion here about how to use Project, perhaps first you should read Project Help, or read one of the good books on Project, take a 2-day class, or see online help (ex: Mike Glen's http://pubs.logicalexpressions.com/Pub0009/LPMFrame.asp?CMD=ArticleSearch&AUTH=23). These places describe how to do what you want to do. You want to compute project durations: so in Project terms this means you know the Work (number of FTE hours/days), and you know the units of resources (how many of you and your colleagues are available to be assigned). With those two knowns, Project will compute the duration. --rms www.rmschneider.com On 19/02/10 06:28, rbwillis wrote: > Hello, I am a consultant who works on lump sum projects. I would like to use > MS Project to calculate project durations and Gantt charts based upon > resources (and associated bill rates) combined with their work allocation > percentage. I've tried several times to make this work and have even tried > to make my own custom fields but can't seen to get all the pieces / formulas > to work out. > > Can anyone tell me if this should be possible w/o resorting to custom VBA > programming? > Thank you!
From: "Steve House" sjhouse at hotmail dot on 20 Feb 2010 06:46 Are you saying the work lasts as long as the money holds out, without regard to the actual creation of the project's deliverables? It seems like that's what you're saying here - we've been budgeted $10000 to do "X". If we get X done after spending only $5k we just hang around doing make-work but keep billing until we've spent the $10k. On the other hand, if we spend the $10k and still haven't finished X, we just walk away. When you say that you have a lump sum to work with and the time allocated depends on how long it takes the resource cost to use up that amount, that's what it really boils down to. I think that's why you're having difficulties getting Project to work that way - it's a fundamentally illogical approach to scheduling. Projects involve physical processes that create deliverables at a certain, usually fixed, rate per man-hour spent. Estimating the time or man-hours required to actually do the physical work needed to create the deliverables and then deriving the cost from those required man-hours and resource cost is a much more viable approach. Saying that we have X dollars and resources cost us Y doillars per hour, therefore the project will take X/Y hours just doesn't make sense because it doesn't take into account what the project is intended to accomplish (other than spending money). On the other hand, saying it will take us X hours to finish the thing the project creates, work costs us Y dollars per hour, thus the project will cost X*Y dollars does make sense. If your lump sum is greater than that amount you've made a profit. If it's less, your project is doomed because you'll run out of money before its goals are achieved. -- Steve House MS Project Trainer & Consultant "rbwillis" <rbwillis(a)discussions.microsoft.com> wrote in message news:A22475C1-4014-48D0-8CD1-DD2DBC8D291A(a)microsoft.com... > Hello, I am a consultant who works on lump sum projects. I would like to > use > MS Project to calculate project durations and Gantt charts based upon > resources (and associated bill rates) combined with their work allocation > percentage. I've tried several times to make this work and have even > tried > to make my own custom fields but can't seen to get all the pieces / > formulas > to work out. > > Can anyone tell me if this should be possible w/o resorting to custom VBA > programming? > Thank you!
From: rbwillis on 25 Feb 2010 01:04 Actually we work on projects for a fixed cost. The object is to get the work done just as (or before) the money runs out. If we succeed then we earn the profit built into our fee. If we go beyond, then profit reduces accordingly. What I want to do with MS Project is to forecast the work load for resources. As engineering consultants, we often continue to tweak on projects long after we should have stopped, seeing profits dwindle in the process. I'm hoping to be able to give staff an estimate of just how long (at how hard, i.e. %) they have to complete the work. Money runs out, put your pencils down. With several project ongoing at once we tend to wait till the deadline is upon us and then scramble to complete the work. I'd like to be able to pace ourselves by adjusting the % availability so as not to get into a crunch. I know it's counter intuitive to how MS Project is designed in it's base form, namely Resource x Duration = Project Cost. I simply need find out how to get Project Cost / Resource = Duration. Thanks for any insight you can offer. "Steve House" wrote: > Are you saying the work lasts as long as the money holds out, without regard > to the actual creation of the project's deliverables? It seems like that's > what you're saying here - we've been budgeted $10000 to do "X". If we get X > done after spending only $5k we just hang around doing make-work but keep > billing until we've spent the $10k. On the other hand, if we spend the $10k > and still haven't finished X, we just walk away. When you say that you have > a lump sum to work with and the time allocated depends on how long it takes > the resource cost to use up that amount, that's what it really boils down > to. I think that's why you're having difficulties getting Project to work > that way - it's a fundamentally illogical approach to scheduling. Projects > involve physical processes that create deliverables at a certain, usually > fixed, rate per man-hour spent. Estimating the time or man-hours required > to actually do the physical work needed to create the deliverables and then > deriving the cost from those required man-hours and resource cost is a much > more viable approach. Saying that we have X dollars and resources cost us Y > doillars per hour, therefore the project will take X/Y hours just doesn't > make sense because it doesn't take into account what the project is intended > to accomplish (other than spending money). On the other hand, saying it > will take us X hours to finish the thing the project creates, work costs us > Y dollars per hour, thus the project will cost X*Y dollars does make sense. > If your lump sum is greater than that amount you've made a profit. If it's > less, your project is doomed because you'll run out of money before its > goals are achieved. > -- > Steve House > MS Project Trainer & Consultant > > > > > > "rbwillis" <rbwillis(a)discussions.microsoft.com> wrote in message > news:A22475C1-4014-48D0-8CD1-DD2DBC8D291A(a)microsoft.com... > > Hello, I am a consultant who works on lump sum projects. I would like to > > use > > MS Project to calculate project durations and Gantt charts based upon > > resources (and associated bill rates) combined with their work allocation > > percentage. I've tried several times to make this work and have even > > tried > > to make my own custom fields but can't seen to get all the pieces / > > formulas > > to work out. > > > > Can anyone tell me if this should be possible w/o resorting to custom VBA > > programming? > > Thank you! > > . >
From: Rob Schneider on 25 Feb 2010 03:47
Project doesn't use "cost" directly. It uses "work" which is great for you. You can forget about cost (which is work x billing rate). You need, I think, to keep work with the work budget. As you say, get the work done. Which means in Project, to "spend" the work hours (liquidate as my favourite boss from the past taught me) within your limits. Focus on how much work allocated to each deliverable, and model/track those deliverables in Project. With this approach, and using Project as designed, you'll be able to forecast very early on in the project when you think that the pencils will need a case. --rms www.rmschneider.com On 25/02/10 06:04, rbwillis wrote: > Actually we work on projects for a fixed cost. The object is to get the work > done just as (or before) the money runs out. If we succeed then we earn the > profit built into our fee. If we go beyond, then profit reduces accordingly. > What I want to do with MS Project is to forecast the work load for > resources. As engineering consultants, we often continue to tweak on > projects long after we should have stopped, seeing profits dwindle in the > process. I'm hoping to be able to give staff an estimate of just how long > (at how hard, i.e. %) they have to complete the work. Money runs out, put > your pencils down. With several project ongoing at once we tend to wait till > the deadline is upon us and then scramble to complete the work. I'd like to > be able to pace ourselves by adjusting the % availability so as not to get > into a crunch. I know it's counter intuitive to how MS Project is designed > in it's base form, namely Resource x Duration = Project Cost. I simply need > find out how to get Project Cost / Resource = Duration. Thanks for any > insight you can offer. > > "Steve House" wrote: > >> Are you saying the work lasts as long as the money holds out, without regard >> to the actual creation of the project's deliverables? It seems like that's >> what you're saying here - we've been budgeted $10000 to do "X". If we get X >> done after spending only $5k we just hang around doing make-work but keep >> billing until we've spent the $10k. On the other hand, if we spend the $10k >> and still haven't finished X, we just walk away. When you say that you have >> a lump sum to work with and the time allocated depends on how long it takes >> the resource cost to use up that amount, that's what it really boils down >> to. I think that's why you're having difficulties getting Project to work >> that way - it's a fundamentally illogical approach to scheduling. Projects >> involve physical processes that create deliverables at a certain, usually >> fixed, rate per man-hour spent. Estimating the time or man-hours required >> to actually do the physical work needed to create the deliverables and then >> deriving the cost from those required man-hours and resource cost is a much >> more viable approach. Saying that we have X dollars and resources cost us Y >> doillars per hour, therefore the project will take X/Y hours just doesn't >> make sense because it doesn't take into account what the project is intended >> to accomplish (other than spending money). On the other hand, saying it >> will take us X hours to finish the thing the project creates, work costs us >> Y dollars per hour, thus the project will cost X*Y dollars does make sense. >> If your lump sum is greater than that amount you've made a profit. If it's >> less, your project is doomed because you'll run out of money before its >> goals are achieved. >> -- >> Steve House >> MS Project Trainer& Consultant >> >> >> >> >> >> "rbwillis"<rbwillis(a)discussions.microsoft.com> wrote in message >> news:A22475C1-4014-48D0-8CD1-DD2DBC8D291A(a)microsoft.com... >>> Hello, I am a consultant who works on lump sum projects. I would like to >>> use >>> MS Project to calculate project durations and Gantt charts based upon >>> resources (and associated bill rates) combined with their work allocation >>> percentage. I've tried several times to make this work and have even >>> tried >>> to make my own custom fields but can't seen to get all the pieces / >>> formulas >>> to work out. >>> >>> Can anyone tell me if this should be possible w/o resorting to custom VBA >>> programming? >>> Thank you! >> >> . >> |