Hello again and welcome back to our course on Project 2016 Advanced.
In this section we’re returning to a version of the website project and we’re going to
look at cost rates and changes in cost rates.
I’m sure you’re familiar with assigning resources to tasks and we’ve already looked
at calculations involving cost of resources working on tasks.
But sometimes when you assign a resource to a task there may be the added complication
that the rates that you pay for that resource will depend on the particular tasks that the
resource is being assigned to.
So this is the Resource Sheet for version 05 of the website project.
And if you look at the standard rate, overtime rate and cost per use columns for the resources
you can see, for example, that for the generic resource Northern Farm Foods we have a standard
rate of $35 per hour and overtime rate of $35 per hour.
I should point out that in this section we’re working on the principle that everything is
chargeable.
So we’re working out a full cost for this version of the project.
Even though money won’t necessarily change hands in all cases we need to know the cost
of producing this website.
So even time attributed to the Northern Farm Foods team, the customer, will still be charged
at least on paper.
And then back to the Resource Sheet.
So for each of the resources there we have generally speaking a standard rate and then
overtime rate.
One case in particular we don’t have an overtime rate is the contract consultant at
the bottom there but that’s because their contract consultant works on a cost per use
basis.
Now when you set up these resources those rates that you enter in columns like standard
rate, overtime rate are treated as what are called the A rates.
So they’re the default rates for those resources.
So if I looked at Mark Ravenswood, for example, select him in the list, right click, click
on Information, and then click on the Cost tab you’ll see that that is Mark’s A or
default rate for the work that he does.
Standard rate $35 per hour, overtime rate $50 per hour, per use cost zero.
In addition to that A rate Mark can have a B rate and a C rate and a D rate and an E
rate.
And if I just go back to the A rate again, in addition we can schedule changes to any
of those rates.
Now I’m going to come back to rate changes a little bit later in this section.
So let’s stick with the A default for Mark at the moment.
I’ve not made any changes so I’ll cancel that.
And I’m going to switch now from Resource Sheet view to Resource Usage view.
Now Mark is really only assigned to the HTML etcetera task on this project.
But if I go down to say Bakersfield Associates, one of the companies that works for us on
these projects, you can see that Bakersfield Associates are assigned to quite a range of
different tasks.
They’ve got analysis and design, graphical resources and branding, test scripts and testing.
Now the default rate for Bakersfield Associates is $60 per hour with an overtime rate of $100
per hour.
And that is the rate that they would normally charge for IT related work.
But when it comes to graphical work such as graphical resources and branding there they
generally charge a higher rate.
They’re much more specialized skills.
So they would charge for that type of work, their B rate.
Now if I click on B you’ll see that their B rate is $100 per hour standard rate, $150
per hour overtime rate.
Now what I need to make sure of is that I have the correct rate assigned for each of
the tasks that Bakersfield Associates is working on.
Now one way that I can do that is if I insert a column here, select Cost Rate table.
You’ll see that at the moment everybody, in fact but Bakersfield Associates in particular
have been assigned according to their A rate.
Now what I need to do is to change that to their B rate.
And that particular task, that 60 hour task, will now be assigned at the higher rate.
Now that’s 60 hours at $100 an hour.
Let’s put another column in here.
And there we are.
That’s $6,000.
Whereas the 102 hours on the A rate working on analysis and design the cost is $6,120.
And if you work that out that correctly comes out at $60 per hour.
So one thing to bear in mind is that when you are setting up and maintaining resource
information if a resource does have different cost rates you need to maintain the values
in those tables.
When it comes to assigning resources to tasks, let me just go back to the Gantt Chart here.
When it comes to assigning resources there is no option here to specify the cost rate
table to use.
So what you would normally do is to assign the resource anyway and the resource will
be assigned with the default A rate.
And then if you change the view, in this case from Gantt to Task Usage, let’s take an
example here say where we have Adrian Hasgill assigned to the database implementation task.
If I double click on that I open up Assignment Information.
And in this dialog you can set the cost rate table.
So in this case for Adrian Hasgill the task is a much more highly specialized technical
task and his time is charged on this at his higher B rate.
So having already made the assignment you open the Assignment Information dialog that
you can access from Task Usage view, change the rate to B, click on OK, and Adrian’s
time on that task is now being charged at his B rate.
Something else that I mentioned earlier on is what we’re going to look at next and
that is that over the life of a project and in particular if you use a particular resource
pool on a succession of projects you may well need to change rates, normally increase rates
perhaps with increases to rates charged by clients or in fact your own internal charging
rates may change.
Let’s look at Bakersfield Associates again.
The A rate there, $60 per hour standard rate and then the B rate $100 per hour.
Let’s assume that Bakersfield Associates have notified us that from Monday, July 18th
all of their rates are going up and in fact the standard rates are going up by $5 per
hour, overtime rates by $10 per hour.
So on the B here select a date.
So that’s going to be Monday, July 18th.
Standard rate is going to be $105, overtime rate $160, per use cost is going to remain
at zero, and then back to the A. July 18th, $65, $110, cost rate per use cost stays the
same.
Now each of those five rate tables you can schedule rate changes for and you can schedule
up to 25 rate changes.
So you can set this up for some way into the future.
So let’s click on OK and of course the changes you’ll see reflected in all of the costs
there associated with the task that Bakersfield Associates are working on.
And let’s take a look at another option for changing rates.
We’ve also been notified that from August 1st internal costs will increase by 5%.
So this is not a dollar increase.
This is a percentage increase.
Let’s look at Adrian Hasgill’s rates.
So from August 1st.
Now what’s going to happen here is the standard rate is going to increase by 5%.
So all you need to type in the standard rate column here is +5%.
Now note the current rate is $50 per hour.
So a 5% increase.
Project 2016 works it out for you to be $52.50 per hour.
Same again.
And then I’m going to do the same for the B rate
and again those will be reflected in the additional costs for any tasks that go beyond August
1st for Adrian Hasgill.
So that’s a couple of ways of dealing with cost rate changes.
I’ve mentioned a few times over the sections here overtime rates and what we’re going
to look at in the next section is how to deal with overtime.
But that’s it for this section.
Please join me in
the next one.