Calculate data in financial summary
This section describes how PPM calculates data in a financial summary.
You can specify whether forecasted labor costs on the financial summary are to be calculated (rolled up) from the staffing profile. When this option is selected, separate, non-editable forecast lines are automatically created in the financial summary to reflect the staffing profile estimates, including the percentage split between capital and operating costs. For details, see Configure financial summary settings.
The forecast labor cost of a staffing profile is the sum of forecast labor costs of all positions in this staffing profile. The forecast labor cost of a particular position is calculated as follows:
Forecast labor cost of a position = Forecast labor cost of assignment or promise of the position + Forecast labor cost of unmet demand
Forecast labor cost of assignment = Total committed effort of the assigned resource * Cost rate of the resource
Forecast labor cost of promise = Total promised effort of the assignment * Cost rate of the position
Forecast labor cost of unmet demand = Total unmet demand effort * cost rate of the position
The cost rate of a position and resource is determined by the cost rule described in Best matching strategy.
Note: If there is over allocation on assignments, the unmet demand becomes negative. The negative unmet demand values are by default ignored in the calculation.
You can use the IGNORE_NEGATIVE_UNMET_DEMAND parameter to decide whether the negative unmet demand value should be ignored. For details, see the Server parameters.
Cost factors for calculating forecast labor cost
The following table describes cost factors used for calculating the forecast labor cost.
|Entity||Relevant Cost Factors|
|Forecast labor cost of a position's unmet demand||
|Forecast labor cost of an assignment||
The forecast labor cost is not updated immediately when you change cost factors described in the table above. It is recalculated base on the latest cost factors when the Staffing Profile Financial Summary Sync service is triggered by effort or status change of the position or assignment. PPM does not keep or consider historic cost rates after you change cost factors.
Note: If you change the cost rate by clicking the Add New Rate button on the Edit Cost Rule page and specify an effective start date in the pop-up window, PPM keeps and considers historic cost rates when calculating the forecast and actual labor costs for periods earlier than the effective start date.
For more information about calculating forecast labor cost, see Financial Management.
When calculating the cost of a resource or a staffing profile position, PPM uses the rate of the cost rule that best matches the resource or the position. For details on how PPM picks up the best matching cost rule for a resource or position, see How PPM picks up cost rules.
Actual labor cost period break down
The actual efforts you log in time sheets and work plans are in a continuous range. However, when rolling up the actual labor cost to the financial summary, PPM breaks it down into periods. The cost of each month is calculated as follows:
Actual Labor Cost of month n = Total Actual Cost * Working days in month n / Total working days during the period when actual efforts are logged
For example, a resource has been working on a task from July 17th to August 20th, 2013 and costs USD $10000. Data used when calculating the actual labor cost of this resource is as follows:
Total actual cost is USD $10000.
Total working days from July 17th to August 20th is 25 days.
Working days in July is 11 days.
Working days in August is 14 days.
Note: Working days are calculated according to the calendar of the resource.
Therefore, actual labor cost of this resource in July is USD $10000*11/25 = USD $4400, while that in August is USD $10000*14/25 = USD $5600.
The calculation of actual labor cost is the same for part time and full time resources.
For more information about calculating forecast labor cost, see "Configuring a Lifecycle Entity Financial Summary for Capitalization and Roll-Ups" in Financial Management User Guide.
Net Present Value and Total Nominal Return
For information about net present value and total nominal return, see Appendix A of Portfolio Management User Guide.