1. Copyright 2010, The World Bank Group. All Rights Reserved. Budgeting Statistical Projects Section B 1

2. Copyright 2010, The World Bank Group. All Rights Reserved. Determining Costs for Activities Be accurate to maximize limited funds Costs not included will not be funded Plan and budge for quality control to produce quality 2

3. Copyright 2010, The World Bank Group. All Rights Reserved. Quality Assurance Program Costs 1.Personnel costs during production 2.Training costs 3.Verification method 4.Equipment and supply costs 5.Travel costs 6.Supervisory costs 3

4. Copyright 2010, The World Bank Group. All Rights Reserved. Personnel Costs: Operation takes 14 8-hour days and the pay rate is $4 per hour, what is the salary for one worker to complete this operation? 14 days x 8 hours x $4 per hour = $448 4

5. Copyright 2010, The World Bank Group. All Rights Reserved. Personnel Cost Example Want to complete coding in 10 days, can only work one shift per day, how many hours available to complete the coding? 10 days x 8 hours per day = 80 hours 5

6. Copyright 2010, The World Bank Group. All Rights Reserved. Personnel Cost Example: If we have 4,000,000 questionnaires and the average rate of work is 40 questionnaires per hour, how many people will I need? (4,000,000 questionnaires divided by 40 questionnaires per hour) divided by 80 hours (4,000,000/40)/80 = 1,250 people 6

7. Copyright 2010, The World Bank Group. All Rights Reserved. Personnel Production Cost Coders earn $5 per hour $2 per day for transportation 80 hours of work 1,250 workers ($5 per hour x 80 hours) + ($2 x 10 days) = $420 per worker $420 x 1,250 people = $525,000 7

8. Copyright 2010, The World Bank Group. All Rights Reserved. Personnel training cost: Two 8-hour days of training $5 per hour pay during training $2 per day transportation 1,250 people in training [($5 x 16 hours) + ($2 x 2 days)] x 1,250 persons = $105,000 for training 8

9. Copyright 2010, The World Bank Group. All Rights Reserved. Total Personnel Cost? Total Coding Personnel Cost:$630,000 Production Coding Cost:$525,000 Coding Training Cost:$105,000 9

10. Copyright 2010, The World Bank Group. All Rights Reserved. Training Drop Out Costs: Over-training rate of 10% $105,000 personnel training cost.10 x $105,000 = $10,500 Over Training Rate 10

11. Copyright 2010, The World Bank Group. All Rights Reserved. Total Personnel Cost? Total Coding Personnel Cost:$640,500 Production Coding Cost:$525,000 Coding Training Cost:$105,000 Over Training Cost:$10,500 11

12. Copyright 2010, The World Bank Group. All Rights Reserved. Coding Verification Cost: Two-way independent verification less expensive relies on one person to be impartial in their review of the production clerk 12

13. Copyright 2010, The World Bank Group. All Rights Reserved. Coding Verification Cost: Three-way independent verification more expensive increase accuracy since there are two review processes: independent verification and matching. 13

14. Copyright 2010, The World Bank Group. All Rights Reserved. Cost Verification Worksheet Open “Cost verification worksheet.doc” Review summary project information on top left of document Cost out two-way verification Cost out three-way verification 14

15. Copyright 2010, The World Bank Group. All Rights Reserved. Cost Verification Worksheet Answers Open “Cost verification solution.doc” The costs compare as expected: better quality = higher cost Manger and project sponsors must determine acceptable quality based on scope statement acceptance criteria 15

16. Copyright 2010, The World Bank Group. All Rights Reserved. Information Used The total cost is dependent upon: 1.Workload 2.Average work rate 3.Time allotted to complete the task 4.Training requirements 5.Type of verification 16

17. Copyright 2010, The World Bank Group. All Rights Reserved. Costs Calculated From this information we can calculate: 1.Number of personnel needed 2.Production costs 3.Travel and Training costs 4.Verification cost 17

18. Copyright 2010, The World Bank Group. All Rights Reserved. Total coding operation cost: $525,000 production cost $105,000 training cost $ 10,500 over-training cost $ 37,800 two-way matching cost $678,300 Total coding operation cost 18

19. Copyright 2010, The World Bank Group. All Rights Reserved. Equipment and Supplies Take specifications and quantities and gather price quotes from local vendors Determine if space is available for operations –Rent additional space –Modify operations Calculate additional operating costs when working in shifts 19

20. Copyright 2010, The World Bank Group. All Rights Reserved. Supervisory Costs Supervisory ratios are based on: 1.Number of staff to be supervised 2.Logical organization of production staff –Geographical location/dispersion –Work groups 3.Verification method used 20