Lifecycle Entity Financial Summary Calculations and Formulas

The following table summarizes financial summary calculations and formulas for the listed lifecycle entity with the selected financial summary setting.

Table 4-7. Lifecycle entity financial summary settings and associated formulas

Item

Financial Summary Selection

Formula

Proposal

Forecast Labor Cost 1

Calculate the forecasted labor costs from the staffing profile. It equals to the total sum of forecast labor costs of all positions in the staffing profile.

Forecast Labor Cost of a position = Forecast Labor Cost of Assignment/Promise of the position + Unmet Demand * rate determined by cost rule of the position

where,

Forecast Labor Cost of Assignment = Total committed effort of the assigned resource * rate determined by cost rule of the resource/position

Forecast Labor Cost of Promise = Total promised effort of the assignment * rate determined by cost rule of the position

For information about how the cost rate of a position/resource is determined, see 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.

Starting from version 9.31.0001, you can decide whether the negative unmet demand value should be ignored by using the IGNORE_NEGATIVE_UNMET_DEMAND parameter in the server.conf file.

If you set this parameter to true, PPM ignores negative unmet demand value in the calculation of forecast labor cost. If you set this parameter to false, PPM does not ignore negative unmet demand value (regards the negative unmet demand value as it is) in the calculation of forecast labor cost. By default, the value is true.

 

Actual Labor Cost

Calculate the actual labor costs from time logged against the proposal request

Actual Labor Cost = Sum of (time sheet actual effort * rate determined by cost rule for each resource)

For information about how the cost rate of a position/resource is determined, see Best Matching Strategy.

Project

Forecast Labor Cost 1

Calculate the forecasted labor costs from the staffing profile. It equals to the total sum of forecast labor costs of all positions in the staffing profile.

Forecast Labor Cost of a position = Forecast Labor Cost of Assignment/Promise of the position + Unmet Demand * rate determined by cost rule of the position

where,

Forecast Labor Cost of Assignment = Total committed effort of the assigned resource * rate determined by cost rule of the resource/position

Forecast Labor Cost of Promise = Total promised effort of the assignment * rate determined by cost rule of the position

For information about how the cost rate of a position/resource is determined, see Best Matching Strategy.

Note: If there is over allocation on assignments, the unmet demand becomes negative. PPM ignores the negative unmet demand in the calculation of forecast labor cost.

 

Actual Labor Cost

Calculate the actual labor costs from the work plan and time sheets

If time sheets are used:

Actual Labor Cost = Sum of (time sheet actual effort * rate determined by cost rule for each resource)

If time sheets are not used:

Actual Labor Cost = Sum of (actual effort * rate determined by cost rule for each resource)

For information about how the cost rate of a position/resource is determined, see Best Matching Strategy.

Actual Non-Labor Cost

Calculate the actual non-labor costs from the work plan

Actual Non-Labor Costs = Sum of (actual non-labor costs for each task)

Asset

Forecast Labor Cost 1

Calculate the forecasted labor costs from the staffing profile (all labor costs are set to operating). It equals to the total sum of forecast labor costs of all positions in the staffing profile.

Forecast Labor Cost of a position = Forecast Labor Cost of Assignment/Promise of the position + Unmet Demand * rate determined by cost rule of the position

where,

Forecast Labor Cost of Assignment = Total committed effort of the assigned resource * rate determined by cost rule of the resource/position

Forecast Labor Cost of Promise = Total promised effort of the assignment * rate determined by cost rule of the position

For information about how the cost rate of a position/resource is determined, see Best Matching Strategy.

Note: If there is over allocation on assignments, the unmet demand becomes negative. PPM ignores the negative unmet demand in the calculation of forecast labor cost.

 

Actual Labor Cost

Calculate the actual labor costs from time logged against the asset (all labor costs are set to operating)

Actual Labor Cost = Sum of (time sheet actual effort * rate determined by cost rule for each resource)

For information about how the cost rate of a position/resource is determined, see Best Matching Strategy.

  1. Starting from version 9.31, you can decide to use the cost rate of the resource role or the position role to calculate the forecast labor cost of assignment.

    If you set the SP_RESOURCE_ROLE_RATE_ENABLE parameter to true, the forecast labor cost of assignment is calculated by the cost rate of the resource role. If you set this parameter to false, the forecast labor cost of assignment is calculated by the cost rate of the position role. By default, this parameter is set to true. When the resource has no role defined, and you set the parameter to true, the cost rate of the position role is used.

Note: The actual efforts you log against 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 the month X = Total Actual Cost * Working days in month X / Total working days during the period when actual efforts are logged

For example, if a resource has been working on a task from July 17th to August 20th, 2013, and cost USD $10,000, then

  • The total working days is 25 days in which the working days of July is 11 days and the working days of August is 14 days.
  • The actual labor cost of this resource in July is USD $10,000 * 11 / 25 = USD $4,400, while the actual labor cost in August is USD $10,000 * 14 / 25 = USD $5,600.