Test 2 Flashcards
3 ways of calculating duration
- Using Formula for Production ( Duration / Production
Ex; 500 cm of concrete / 50 cm/day = 10 days - Using past projects and / or unit quantities for such items as Engineering / Drawings / Architectural services etc:
Ex: Prep of drawings for a 10 000 sf bldg. took 4 weeks
On a 25 000 sf bldg. ? x/25000 = 4 weeks/10000 x= 10 weeks - Weighted Average (used for larger projects )
Based on the weighted average of 3 durations
Optimistic (3)
Expected (6)
Pessimistic (8)
{ O + 4E + P} = 3+4(6)+8 = 5.8
6 6
Law of diminishing returns
In determining the resources for a particular activity (# of workers or equipment) you must take into account that the increase in resources does not necessarily increase the output or production proportionally — the optimal # of resources can be determined by gathering and studying statistics and/or by expert judgement (experience).
Earned Value Analysis : 3 Key Values
1 . Planned Value (BCWS Budgeted Cost of Work Scheduled)
This is the budgeted (or baseline) cost of tasks estimated at the start the project plan.
For example: The total planned budget for a 4 day activity is $100, so after the 3rd, the planned value is $75 ($25/Day).
- Actual Cost (ACWP Actual Cost of Work Performed)
This is the actual cost required to complete all or some portion of the tasks.
For example: If the 4 day activity actually costs $30/Day during the first 3 days. Actual cost for this period is $90 (but the PV is still $75). This value does no tell you how much work you did, only the cost. - Earned Value (BCWS Budgeted Cost of Work Performed)
This is the value of the work performed (cost of the work done) (comparing the amount or % of work done compared to the % or amount of money spent)
For example: After 3 days, you did 75% of the work but spent 90% of the budget (over budget).
Schedule of Values (SOV) (Ventilation des couts)
Breakdown of the total value of a contract
Makes it easier to determine value of work completed — the more detailed the better
Used for Requisitions and Payments
Ex: GC send Requistion at the end of 1 st month for $112,500 (50% exca and 25%
of foundation done accounting for 112,500$.
Should be mutually agreed upon by all parties involved, i.e. payment after concrete finishing, after 50% of brickwork, etc.
Front loading: trying to put a higher value on the activities that occur in the beginning in order to get more money faster. Contractor is then able to purchase materials for next steps, what else?
Project Cost Control
Cash Flow
Used to monitor expenditures and estimate cost at completion
Example of cash flow from earlier in semester
Work subbed out vs own forces
If work is subbed to another contractor they are only responsible for contract value
If own forces, you need to monitor and control expenses much more closely as the more you
spend, the less profit you make. Cost variance.
Network Compression: Why would someone want to accelerate a schedule. Owner vs Contractor.
Owner: To generate revenues quicker (building up sooner generates money sooner)
Contractor: To avoid penalties if behind, try to increase profits, to go after bonus.
What are some things you can do to shorten a schedule
- Use more resources
- Do overtime
- More or larger crews
- Extra shifts
Direct Costs
Cost of material, labour directly incurred in producing the product or service
When activities are accelerated, the direct costs increase.
Overhead costs
Rent, cell, office space, car, etc.
When overall project completion time is shortened, overhead costs decrease.
Methods of crashing
1) Traditional approach: Crash all activities.
Not cost-effective since crashing activities with float does not decrease project length.
2) Using CPM.
Only crash activities on the critical path.
Normal Cost, Crash Cost, Added Cost per Day (ACD)
Normal Cost = Cost of activity * Normal Duration
Crash Cost = Cost of activity * Crash Duration
Added Cost per Day (ACD)
