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Resource cost rounding

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Bogdan Leonte
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Hello Vladimir,

Materials in Spider have an option called Discrete Consumtion which rounds up the consumtion of the material (granted the Backload consuption is set to No).

So here is my question, is there a way to do this with resources?

Example: 

Backhoe is paied by the day even if it works for 2 hours or for 8. I would like to know if there is a way to take this into account when calculating costs.

Best regards,
Bogdan

Replies

Anoon,

I do not agree with your statement that "Schedules do not govern real construction."

In my practice project schedule creates the plans for every shift and out of sequence performance may lead to some penalties to site managers. Project schedule determines the optimal order of activity execution that shall be followed.

I join to your HAPPY CHRISTMAS TO ALL!

Anoon Iimos
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Vladimir, Yes, nothing is certain or perfect on any given situation. So you need to keep the balance as practicably as possible. Schedules are intended to keep the records regardless of conditions or actual situations. Out of sequence activities and or resources cannot be seen in real construction. Schedules do not govern real construction, but Quality Control (and Safety) governs the real timing of works (I guess most people don't realize this). And Quality Assurance ensures delivery and acceptance of real works or deliverables (again, not the Schedule). However, of course Schedule(s) is the absolute guide or map (or Headlights) for doing the works. If you go astray, then who's to blame? HAPPY CHRISTMAS TO ALL!

Anoon, I agree with your statements but out of sequience in resource constrained schedule can happen without violation of work technology.

The software may suggest certain order of work for constrained resources and for some reason this order may be violated. This is not good if the software calculated the best schedule and may lead to substantial delays.

Anoon Iimos
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Vladimir, The "Culprit" is never the "sophisticated software" nor the "out-of-sequence activities" For me, to separate "time" & "cost" is NOT planning. If this is the case, then no need for Planners or Cost Engineers. Companies shall only employ so-called schedulers and accountants. Again, the culprit is not the software nor OOS activities, but simply your Plan or Schedule in the first place. WHY? Builders or field personnel can never do "out-of-sequence" activities (OOS only exists in Schedules and never in reality). I might suggest to ban "Retained Logic" in the schedules and use only "Progress Override". Try to model your schedule exactly how you would do the works on site and you can never go wrong. This is where your "fragments library" will stand-out. Again, there are no "Short-cuts" for good Planning and Scheduling. One thing that hinders good Planning is the "absence of details", which resulted to most people doing short-cuts.

Anoon,

in my country "official receipts" can be issued only after "work acceptance".

Our planners (we do not have "schedulers") plan both schedules and budgets.

Management decisions are justified if they are profitable. So it is not right to manage schedules and costs separately. Besides it is necessary to know what expenses are expected in each month. So project model includes resources and costs.

But accounting is not based on planner's data and is always late.

Anoon Iimos
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Vladimir, Sorry, but for me, accounting work(s) is only based on "Official Receipts" (a real life fact). "Work Acceptance" is a job for QA/QC. Planned and Real Construction Costs are for Cost Engineers and or Quantity Surveyors. And of course Schedules and actual progress are for Planners and Schedulers, but most of the time doing multi-tasking, and may also cover the scope of Cost Engineers and Quantity Surveyors (that's a real life fact as well). So why the works of Planners are always wrong; and Accounting are always right? Can they not both right at the same time? (When accounting data always rely on Planners for percentage progress or actual progress)?

Anoon,

When we plan the future we take into account risks and uncertainty that do not exist in the past. For example we may allow for certain numbers of the rain days that may actually happen or not, we expect to buy materials for certain price that may actually change, etc. So our planned values are always probable but not certain. Actual data can be measured and confirmed.

Besides we estimate project status and reschedule the remaining work basing on data collected on construction sites. Accounting is usually based on the documented data and accepted works and this data are different. What is done and what is already accepted rarely coincide.

Anoon Iimos
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Vladimir, I do not agree that forward looking scheduling is very difficult or can never be done correctly (in terms of costs); While accounting processes is always accurate. Where do accounting gets the data (or who feeds them the facts) by the way? Accountants or Auditors cannot determine "Physical Progress" all by themselves. They shall always rely on data given by Cost Engineers, Planners or Schedulers. So how do most people (if not all) say that accounting data is always right or reliable? And also I don't agree with the reference linked by Rafael. I hope you understand now? :-)

Anoon,

I understood that you disagree but did not understand with what.

Anoon Iimos
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Sometimes conclusions were easily derived from wrong assumptions (very obvious from the given figures or examples). Forward looking Schedules were usually done using wrongly assumed "short-cuts", thus, always lead to out of sequence activities and or progress. While you can do an accurate "Accounting" working backwards; Why you cannot do an accurate Schedule looking forwards, when the assumptions (or estimations) and the facts should have NO difference at all? I for one do not agree (may never matter to you anyway).
Rafael Davila
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Agree, though not easy it is always good to look for practical ways to improve forward looking.

Bogdan Leonte
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I think I did not make myself clear in the post, my appologies for that.

1. I agree with you, schedule is for the future, accounting is for the past.

2. No way is it a good ideea to use schedules for accounting.

3. The issue discussed was how to create the project model in order to capture costs as close to reality as possible in order to be able to analize project cost vs project price, nothing less nothing more.

4. Actual data will be entered and corrected if needed.

5. I have read the document you posted some time ago when you posted it on another topic (thank you for that, it is most insigthful) and agree with it's content.

Hope now everything is clear.

Best regards,
Bogdan

Rafael Davila
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The way we do it accounting lets us see the past, scheduling lets us see the future.

We do not have the urge to duplicate accounting effort to see the past. Frequently accounting data becomes available after activity finishes; this alone would create hundreds out-of-sequence issues if using scheduling for accounting.  Estimating accounting data at schedule update will require future corrections when finally true data becomes available, the accounting details are so many this is not practical.

Not even for billings we use the schedule because of out-of-sequence problems.  For billings we use Excel, easier for contractor as well as client and architect for their review and approval where there are no out-of-sequence issues.  The following reference illustrates in detail what a mess if using schedule as a billing tool.

The Great Divorce: Cost Loaded Schedule Updating

By the way at home equipment rental can be by the day, by the week or by the month. If by the day only days matter for billings irrespective of hours per day, if by the weeks only weeks, if by the month only months. If returned earlier than the rental period there are adjustment rules.  If rented by the week but used more than 3 days full week rate still applies, if less than 3 days then weely rate divided by 3 is applied for each day. Each vendor might have their own rules as described in their rental agreement. How you model rental if by the month for some supplier while if by the week for other will be interesting. 

Bogdan Leonte
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Rafael,

You are right, my interest in this topic si to better and more realistically estimate future costs in order to perform an analysis between what we pay vs what we get paid for. The way you do it (wait for accounting) only let's you see the past. Also you may deal with large projects +10 mil, while I deal with small projects around 500k, for which the schedules are very short 1-3 months, for these projects the ability to model costs per day is very important because we must maximize the use of equipment.

Google translate does a pretty good job at translating the page in Russian, the image I posted is similar to the sample project in Russian.

You make a Hammock from the start of the project to the end of the project (link it to stat/finish milestone) and assign all resources for which you like to capture idle time and idle costs, then assign the maximum quantity you have at your disposal, and check the variable workload option and set the minimum workload to 0. In the Scheduling with Resource Constraints uncheck (by default it is cheked) the Minimize parallel activities and run the Resource Constrained Scheduling, the hammock will only keep idle time of the resources and quantify that idle time into costs.

Here a very basic example of optimization:

1. Resource: Digger; maximum number: 4
2. 3 Activities, each has assigned a different number of diggers

Result: 120 of idle hours if all 4 Diggers are kept on site; Total Cost: 24k

https://i.postimg.cc/zDPz9QTn/Original-Calculation.png

Optimization: By assigning 4 diggers to all activities, you will get no idle time and shorter duration

https://i.postimg.cc/661ZYY3P/Optimization-Calculation.png

With this model and the ability to calculate costs/day without waiting for accounting is very valuble for forward looking and estimatig total project costs.

Hope I was clear with this example.

Best regards,
Bogdan

Anoon Iimos
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Of course different activities have different costs assumptions; Or perhaps similar activities but of different type of materials or situations, but may use exactly the same equipment. i.e. Excavations: Soft or Normal Soil vs. Hard or Stony one. The contractor can maximize his/her profits for normal or soft excavations but not for hard excavations. Did I understand you right Rafael?
Rafael Davila
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Bodgan,

In my country machines are usually rented by the day.  The rental calculations are per day while resource usage might be less than a full day. Same resource can be shared on different activities same day, different hours on each activity and total resource usage might be less than a day. Our activities can start/finish at middle of the day and do not need to have whole day durations.  Our rental calculations are per day while our cost distribution is per hours on each activity each day, we distribute the rental according to hours used per activity each day.

My question is not about the calculation of rental per day or about at what time of day resource usage started or finished as it does not matter to rental calculations, for rental what matter is if resource was used that day, if used even if 1.25 hours hour we pay full day, the issue then is about the distribution of cost/activity.  We distribute actual as well as idle time within the activities that required the equipment.  I saw no reference in your post about resource hours distributions per day per activity for cost distribution and therefore my question.

In our country for accounting we use accounting software, for scheduling we use several scheduling software depending on what the client requires. We make the rental distributions after receiving the rental bill, preferably we use the labor time cards that distribute the hours the equipment operator worked each day on the different activities at times it is a guesstimate. For us it does not make any sense to use the scheduling software for our accounting.

My curiosity is because we use the scheduling software as a forward looking tool that can include cost estimates and their distributions. Accounting sofware will not give us such forward looking. What you are doing is of interest as a way to get better forward looking reports.  In my schedule examples dealing with cost, with a few exceptions, you will only see forward looking discussions.

  • Spider example is in Russian, I know no Russian, English a little, Spanish is my language.
  • The images are of low quality, annoying to the eye.

Best Regards,

Rafael

Bogdan Leonte
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Rafael,

At the present moment in my country there are several trends:

1. Machines are rented by the day not by the hour

2. Manpower: trade workers are paid by quantity and unskilled labour by hour or by day

3. Own resources (employes) which are paid by the hour

Thus,

When I plan and create the project model I take into consideration all of the above.

Unskilled labour which are paid by the hour/day I usually don't asign them to Multi-Resources because it is very hard to quantify their workload so I asign them to a hammock.

Regarding your curiosity, the model you presented doesn't have issues because activities have round durations (3 days, 5 days) so I can model with hourly costs.

The issue I have is with equipment which may finish the job in the middle of the day but ar payed for the whole day.

For resources that are paid hourly I can easily quantify non-productive time with a hammock to which I asign them and set it to variable workload, quantity of asigment = max number of resource, minimal workload is set to 0, then I un-check the „minimize parallel activities” in the Resource Contrained Scheduling Options.

Here is an example created by Spider Team: http://www.spiderproject.com/ru/index.php/spabout/samples/27-resource/83....

Here is a model based on your model, using hammock to calculate cost of manpower on site.

https://i.postimg.cc/cH2Y8wc5/Resources-On-Site.png

Best Regards,
Bogdan

Rafael Davila
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Out of curiosity.

  • How are you distributing costs when same digger is shared among several activities on same day? 
  • I would calculate day rental and distribute cost among activities per hours used by day on each activity.
  • The following figures are an example of quantity used per day, hours distribution and cost distribution.

Digger-Rental01

Digger-Cost-Distribution

Bogdan Leonte
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Vladimir,

Clould you also add an option for the formula similar to that "Execute Automatically In performance archive".

This would be "Execute Automatically: In Actual Data Input" and it will be as follows:

After setting the period and hitting the Ok button, then the formula would be applied to calculate the actual cost.

Also the field Number of Working Days [Actual] should be available in the Actual Data Input Table in order to avoid Modifiers.

Here is my solution with a sample

6424
cost_per_day.png

https://ibb.co/bLsQYMW

Basically to finish my solution it would be necessary to:

1. Be able to apply formulas in Actual Data Input

2. Show the actual number of resources column (which you can)

3. Show the Number of Working days [Actual], which you cannot at the moment.

Then you would apply the formula only using Actual data and you would get the actual cost/day.

Bogdan,

I like your solution.

Formulas can be applied in the performance archive but yes, activity cost shall be updated manually.

I would suggest to create special cost component for these costs. It will make the process easier.

Adding formulas in the actual input table will help. We will do it.

Bogdan Leonte
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Vladimir,

I have found a partial workaround:

1. Create a User Field called Payed by Day; which is populated with Yes and No

2. Create a User Field called Cost per Day; which is populated with the cost per day for resources which are paied by day.

3. Create a formula(s) (depending on the cost structure/resource types): Cost [Fixed] = if ( Payed By Day = 'Yes', Cost per Day * Number of Working Days [Remaining], Cost [Fixed] ); formula which is applied after scheduling

 

This is only a partial workaround due to the following:

1. Cannot apply formulas in Actual Data Input;

2. Number of Working Days [Actual] cannot be displayed in the Actual Data Input, thus manual calculation is harder;

3. In performance archive activity cost wich use resource payed by day needs to be ajusted manually.

For this solution to be a little easier to use I think that allowing formulas in the Actual Data Input might be the easiest way, or  at least allowing to show the Number of Working Days [Actual] in the Actual Data Input so that manual computations may be done with more ease.

What do you think?

Best regards,
Bogdan

Bogdan Leonte
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You are right, and I have this situation, for which your solution si real good; however I also deal with short projects (1-3 months) which are fast passed and use several machines during several time periods, if I were to create hammocks it would be quite a task to set up the hammocks.

And from experience in a 1 year project a couple of days don't count that much, but for a project that is for 1 month a couple of days is a lot, both in time and in cost.

In our projects heavy equipment is usually leased for long time and usually once.

Bogdan Leonte
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I will use the method you described, with hammocks.

The only solution I have to your solution is to create a macros in excel (use the export to CSV then import) which will create hammocks for resources if the time gap between their usage is less than X days (specified by the user) but I don't think it will prove very productive.

 

Thank you for the solution.

Not easy. We will think about your proposal.

The way I suggested is reliable and not too hard. Hammocks may be hided or put in the separate phase.

Bogdan Leonte
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Understood,

however this method may complicate model a lot if you have 10-20 contruction machines which have this type of cost. Couldn't there be an option for assigments "Round to full day" wich will round the costs to a full day according to the resource calendar, this way you will be able to take into costs for days in which the resource cannot work a full day due to weather conditions, for example.

Also what happens if you use the resource from day 1 to 5, then the resource leaves and comes back on day 60 and works from days 60 to 75.

We use hammock activity that starts with the first usage of backhoe and finishes with the last.

This hammock has special calendar with one hour per day work time. This one hour finishes at the first minute of backhoe work day. The cost of using backhoe is assigned to this hammock as the cost of backhoe day per hour.

The cost may be assigned directly or as dummy resource backhoe cost.