1. TIME AND COST These slides have been added to the standard MRU PM Cert materials and are made available to students who have attended my class. Robin Hornby Tempest Management tmi@telusplanet.net 1

2. Fundamental Definitions EFFORT = work in labour units of hours (usually) DURATION = time in units of days (usually) COST = cost ($) of effort and expenses to deliver the project PRICE = the price ($) of effort and expenses to buy the project AVAILABILITY = resource available for allocation to a project work as a percent of the day UTILIZATION = resource effort spent on the project work as a percent of the day 2Robin Hornby Tempest Management tmi@telusplanet.net

3. Simple Exercise Accounting Problem Define the Problem Interview Accountant Interview Ledger Clerk Analyse Findings Prepare Rec The interviews are dependant upon defining the problem. The findings cannot be prepared until both interviews are completed. 1) Draw the Precedence Diagram 3Robin Hornby Tempest Management tmi@telusplanet.net

4. MILESTONE TABLES Ref Milestone Plan date Forecast date Variance Complt 1.3 All staff hired June 21 June 30 -9 2.1 Hardware Aug 5 Aug 5 0 delivered 4Robin Hornby Tempest Management tmi@telusplanet.net

5. PRESENTATION REQTS FLIP 1 Intro Duration and Budget - summary List of the resources and their qualifications Top Risks FLIP 2 The network diagram FLIP 3 A summary Gantt chart showing phases (activity groups) and milestones FLIP 4 Cost details and cash flow budget chart (S curve) FLIP 5 The selling close - why choose yr firm! You will have about 8 mins to present 5Robin Hornby Tempest Management tmi@telusplanet.net

6. You’re all Estimators! “How long would it take you to clean up after a dinner party of 6 people?” “How many hours would it take you to lay a brick wall 20 ft long by 3 ft high, assuming a level foundation and all material to hand?” Bricks = 6”x3” “You are at home. How long would it take you to get a carton of milk?” 6Robin Hornby Tempest Management tmi@telusplanet.net

7. An Estimation Process Figure out the work to be done Sequence the work Estimate the amount of effort in labor units Estimate how much resource could be applied to the work Apply the available resources to estimate duration Schedule all activities in the project Add “hammock” activities Estimate all costs 7Robin Hornby Tempest Management tmi@telusplanet.net

8. Dealing with Uncertainty Embed or (preferably) separate out contingency Use an “uncertainty class” to tag your estimate and communicate to mgt Use PLO Use PERT 8Robin Hornby Tempest Management tmi@telusplanet.net

9. Traps Assuming you get 7.5 hrs effort a day! –time lost inside the project (affects effort & duration) –time lost outside the project (affects duration) Relative productivity Ambiguous scope, WBS “add-ons” Undocumented assumptions Quoting a single point “ballpark” Inexperience 9Robin Hornby Tempest Management tmi@telusplanet.net

10. The Cure for Inexperience 10Robin Hornby Tempest Management tmi@telusplanet.net

11. Estimating Messages Estimating is a DISCIPLINE To learn it, DO IT! Unremembered experience is worthless Estimating is NOT negotiating! 11Robin Hornby Tempest Management tmi@telusplanet.net

12. COST COMPONENTS Internal effort Subcontractor labour Materials Constructions or assemblies Facilities (eg HW or SW) Expenses Consumables and Supplies 12Robin Hornby Tempest Management tmi@telusplanet.net