Project Management Planning and Scheduling Payment Schemes Cost Estimating Risk Management MAE 156A

2 Planning The Work Breakdown Structure (WBS) divides and subdivides a project into different components, whether by area, phase, function, or other considerations. The further one goes down within the WBS, the greater the granularity of decomposition and the amount of detail. Individual tasks are defined at the lowest level in the hierarchy. MAE156B Project 1.0 Feasibility2.0 Design 3.0 Fabrication 4.0 Test 2.1 Preliminary 2.2 Detailed 3.1 Base Plate 3.2 Robot Arm 3.3 Motor Mount

MAE 156A 3 Scheduling Gantt charts may be used to illustrate the project schedule or timeline WBS TaskJ F M A M J J A S O N D J F M A M J J A S O N D 1.0 Feasibility 2.0 Design 2.1 Preliminary 2.2 Detailed 3.0 Fabrication 3.1 Base Plate 3.2 Robot Arm 3.3 Motor Mount 4.0 Test

MAE 156A 4 Scheduling with Uncertainty Probabilistic task scheduling uses the same numerical techniques as dimensional tolerance analysis! Component dimensional tolerance Task completion uncertainty Task completion is usually modeled as a beta probability distribution. Standard deviation for a series of tasks: Expected duration for a series of tasks:

MAE 156A 5 Open-Source Project Planning GanttProject is a free, open-source, JAVA desktop tool for project scheduling and management. OpenProj is an open-source desktop project management application similar to Microsoft Project.

MAE 156A 6 Delivery Schemes Design-Bid-Build (DBB) Buyer engages engineering firm for design, bid evaluation, and to control construction Design-Build (DB) Buyer develops functional requirements Engineering firm provides design and fabrication skills Turnkey Engineering contractor executes design and construction Lump-sum payment is made at product delivery Build-Operate-Transfer Engineering contractor finances entire project End users pay fees to the contractor Facility returned to buyer at contract end

MAE 156A 7 Payment Schemes Time and Material (T&M) contractor is paid for actual expenses Unit Price contractor is paid for each separate unit of work Cost Plus Fixed Percentage Fee contractor is paid actual cost plus fee as a percentage of cost Cost Plus Incentive Fee contractor is paid actual cost plus performance-based incentives Cost Plus Fixed Fee (CPFF) contractor is paid actual cost plus a fixed amount Target Cost Plus Incentive Fixed Fee contractor benefits when actual cost is below budget Firm Fixed Price (FFP) contractor is paid a stipulated lump-sum amount at delivery

MAE 156A 8 Labor Rates and Project Costs Project costs include both direct and indirect costs. Materials, supplies, and labor used in a project are called “direct costs”. Accounting factors are introduced to cover “indirect costs”. Fringe Benefits = payroll taxes, medical insurance, vacation, coffee Overhead = office space lease, electricity, computers, telephone General & Administrative (G&A) = executive salary, marketing, admin staff Profit = more money for the executives Labor rate terminology: Unloaded hourly rate = how much you make (before deductions) Loaded hourly rate = how much the company charges for your work

MAE 156A 9 Example Cost Plus Estimate Labor = (unloaded hourly rate)*(number of hours) ($28/hr)*(1 hour) = $28 Fringe Benefits = (fringe factor)*(labor) (0.5)*($28) = $14 Overhead = (overhead factor)*(fringe benefits + labor) (0.5)*($14 + $28) = $21 G&A = (g&a factor)*(direct material costs + overhead + fringe + labor) (0.15)*($0 + $21 + $14 + $28) = $10 Profit = (profit factor)*(g&a + direct mat'l + overhead + fringe + labor) (0.05)*($10 + $0 + $21 + $14 + $28) = $4 Total Cost = profit + g&a + direct mat'l + overhead + fringe + labor $4 + $10 + $21 + $14 + $28 = $77 Unloaded Rate = $28/hr Loaded Rate = $77/hr

MAE 156A 10 MAE156B Project Budget How much should you charge for your work in MAE156B? Four member team with each student spending 20 hours/week. Labor Hours = (4 students)*(20 hrs/week/student)*(10 weeks) = 800 hours Direct Material Cost = $1,500 Using rate factors from previous slide, the Total Project Cost estimate is $62,670.

MAE 156A 11 Further Reading De Marco, A., Project Management for Facility Constructions: A Guide for Engineers and Architects, Springer