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Selling Price vs. Direct Costs & Contingencies

9 replies [Last post]
Rami Al Haddad
User offline. Last seen 4 years 42 weeks ago. Offline
Joined: 16 Jun 2005
Posts: 60
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Hi,

Was wondering if there is a Practical way to cost load a schedule with:

1) Our selling price

and

2) Direct costs and contingencies,,, etc.

both at the same time on the same schedule and perhaps have a way to report the cost based on (any) or (both) of them.

Cheers,
Rami

Replies

Rafael Davila
User offline. Last seen 12 hours 37 min ago. Offline
Joined: 1 Mar 2004
Posts: 5229
I believe you can assign multiple cost accounts to a single resource so by deleting the resource you are deleting the data related to the particular resource multiple cost accounts.

Always keep %complete separate from duration and particularly cost calculations as these probably will be transferred to costs accounts calculations, even when not using resources but cost loading directly to the activity. The use of resources in combination to cost accounts can be an aid for your deletion and filters.

I have Primavera SureTrak (and Spider Project - my favorite) so maybe P6 behaves somewhat differently, this you got to check out yourself. I would appreciate if you let me know for my knowledge.
Rami,
if you set the resource price to zero does it mean that not only planned but also actual cost will be recalculated?
If yea then P6 produce wrong data for cost management because resource costs change during project execution but actual costs remain the same, if no then the method that you suggested will not work for performance reports and EV calculations.
I suggest to apply different cost accounts.
Best Regards,
Vladimir
Rafael Davila
User offline. Last seen 12 hours 37 min ago. Offline
Joined: 1 Mar 2004
Posts: 5229
I would set a resource for every group you want to hide/unhide. Then after my updates I would save the schedule under different names and delete from each the combination of resources that will automatically delete the costs/income related to each resource group you want to hide.

Keep in mind that transferring only actual dates and percent complete will leave out remaining duration if not tied to %complete, and better avoid tying one to the other. It will also leave out spent duration if activity splitting occurred during the period, expected finish and all actual cost and resource quantities on a per period basis, the correct way to show true progress.

If your software is limited to transfer actuals between versions only through the use of export/import function avoid it as much as you can. Keep it to more advanced needs such as when you have two versions with slightly different logic, here advanced functionality to keep separate versions really shines.
R. Catalan
User offline. Last seen 12 years 4 weeks ago. Offline
Joined: 15 Aug 2005
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Rami,

I would advised to do it in 2 programme. One for internal and the other for external (Client).

You just update one programme and export/import the current dates and % complete to the other.

Best regards,

R. Catalan
Rami Al Haddad
User offline. Last seen 4 years 42 weeks ago. Offline
Joined: 16 Jun 2005
Posts: 60
Groups: None
Vladimir,

I have experimented a little with one activity example: and this is what I’ve come up with:

1) I created 2 resources, one for Selling Price and one for Expenses.

2) Made their default price per unit = 1

3) Assigned both of them to the activity

4) Assigned the amount of money as "units" to "Budgeted Units" to the resource instead of "Budgeted Cost"

5) Now the trick goes like this, if I want to show one of the costs but the other, go to the Resource Windows and set the Price Per Unit for the resource corresponding to that cost to Zero then form the Tools Menu Recalculate Assignment Costs.

this way, earned value calcs will be based on the combination of these 2 resources that u switch on/off.

still, would appreciate any suggestions/improvement, other tricks, any warning to this method. as I mentioned, made my trials on one activity so not sure how it behaves on multiple!

Cheers,
Rami
Rami,
I did not use it in P6, I just know that there are cost accounts and expect that P6 can do with them similar things that we do in Spider Project.

I expect that all reports including EV can be created not only for the total cost but also for each cost account. This shall solve your problem. Please inform me if it is true for P6.

Though not only costs but also durations may be different in the contract schedule and internal schedule. It is usual to have not only parallel costs but also parallel schedules. This is more complicated and P6 does not support this function.

Best Regards,
Vladimir
Rami Al Haddad
User offline. Last seen 4 years 42 weeks ago. Offline
Joined: 16 Jun 2005
Posts: 60
Groups: None
Alright guys,

it can be done with resources, it can be done with expenses with different categories/Cost accounts and then filter what cost you need to show in a report and print it out, I agree with you on that part.

now, if I want to print the updated schedule with that flashy %complete or EV right there on the top of project band, how can i make this number reflect only one and only one of the costs! if i’m printing the schedule layout for a client, obviously they are more interested in calculations based on their budget; selling price to us. if i’m printing a report to out overseas management, they want to see, invoice-able amounts and expenditures!

i didn’t use spider project! i’ll have a look at it though, thank you for the tip. but for the time being, is there a trick to do it in P5/P6.

thank you again :)
Gary Whitehead
User offline. Last seen 4 years 42 weeks ago. Offline
Just set up a resource for selling price, one for contingency, etc. Then filter on whichever one you want when running reports, no?
Hi Rami,
I did not do it in P6 but the logical way is to create Cost Breakdown Structure with two main Centers - Selling Cost and Expenses. Then assign to project activities both selling costs and expenses.
Reports on this Cost Centers will supply you with necessary information.

In Spider Project creating several parallel Cost Centers is widely used for Cost Analysis. I expect that it will work in P6 also.

Best Regards,
Vladimir