• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Backup darren elliott
 

Backup darren elliott

on

  • 9,880 views

 

Statistics

Views

Total Views
9,880
Views on SlideShare
9,880
Embed Views
0

Actions

Likes
0
Downloads
2
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Backup darren elliott Backup darren elliott Presentation Transcript

    • Modeling the Effect of Budget Constraints on Cost and Schedule NASA 2012 PM Challenge Darren Elliott – Tecolote Research, Inc. 22 February 2012  Los Angeles  Washington, D.C.  Boston  Chantilly  Huntsville  Dayton  Santa Barbara  Albuquerque  Colorado Springs  Goddard Space Flight Center  Johnson Space Center  Ogden  Patuxent River  Washington Navy Yard  Ft. Meade  Ft. Monmouth  Dahlgren  Quantico  Cleveland  Montgomery  Silver Spring  San Diego  Tampa  Tacoma  Aberdeen  Oklahoma City  Eglin AFB  San Antonio  New Orleans  Denver  Vandenberg AFBPRT#115 22 February 2012 Approved for Public Release
    • Outline/Agenda Background Modeling Techniques Summary PRT#115 22 February 2012 Approved for Public Release 2
    • Evolution of Cost/Schedule Understanding Implementation of cost risk analysis to provide a better gauge of the most likely required effort for a project  NASA established policy to fund at a target cost confidence level  Reality was that cost risk funds exceeded targeted budget levels  Led to additional analysis on best techniques for applying reserve and setting up the overall project budget Recognition that enhanced modeling was needed, as many costs are time- dependent (e.g., fixed infrastructure, program support, systems engineering) in nature  Developed methods to address costs based on time behavior (e.g., time-dependent and time- independent) Enhanced understanding hat additional costs are incurred due to schedule delays associated with alignment of work packages  Developed methodology to integrate cost and schedule risk analysis to determine the joint confidence level (percent chance of meeting both cost and schedule objectives)  NASA established policy to fund projects at a target joint confidence level Realization that funding is a major driver to schedule and total cost  Lack of budget availability stretches schedule  Currently researching and developing methods to address this problem PRT#115 22 February 2012 Approved for Public Release 3
    • Our Reality is an Integrated System; Where Budget Availability is a Major InputPRT#115 22 February 2012 Approved for Public Release
    • Several Tools Have Recently Been Developed to Assess Impact of Funding Constraints Tool 1: Deterministic Based Approach  Sponsored by NASA JSC , developed by Tecolote Research, Inc  Requires identification of major cost elements, breakdown into TD/TI behavior, and notional understanding of dependency (serial or parallel) between cost elements  Uses time-phased cost and budget information  Runs in Excel Tool 2: Cost Risk Based Approach  Sponsored by NASA HQ, developed by Tecolote Research, Inc  Requires development of a cost-risk analysis  Uses cost risk statistics, and time-phased cost and budget information  Runs in ACE or Excel Tool 3: Integrated Cost and Schedule Risk Analysis Approach  Sponsored by NASA JSC and NASA HQ , developed by Tecolote Research, Inc  Requires development of an integrated cost and schedule risk analysis, allocation of costs to schedule effort, and breakdown of cost into TD/TI behavior  Uses schedule logic, cost allocation to schedule activities, time-phasing of costs, cost and/or schedule statistics, allocation of schedule/cost effort into budget items, time-phased budget information, and can incorporate discrete threats  Runs in Excel /Crystal Ball PRT#115 22 February 2012 Approved for Public Release 5
    • Modeling the Effect of Budget Constraints on Cost and Schedule DETERMINISTIC ANALYSISPRT#115 22 February 2012 Approved for Public Release 6
    • Deterministic Analysis Model Purpose: Provide program managers and resource analysts the ability to assess the effect that budget constraints will have on a program  Requires a simple set of data  Includes estimated effect on both cost and schedule Allows for rapid simulation and comparison of different scenarios Requires cost plan for major activities/efforts and a notional understanding of major effort dependencies (e.g., serial or parallel activities) PRT#115 22 February 2012 Approved for Public Release
    • Model Overview The model attaches Time-Independent (TI) and Time- Dependent (TD) costs to schedule elements  TI cost elements: Total cost is constant regardless of duration  TD cost elements: Total cost increases as duration increases (labor rate and resources) Budget constraints reduce spending and cause the associated schedule elements to extend  Assumes a constant spend rate within each fiscal year  The spend rate is determined from the year’s constraint  TD spend rates are considered fixed, while TI spend rates are allowed to vary to fit within the constraintPRT#115 22 February 2012 Approved for Public Release
    • Model Overview Named Schedule Cost Budget Excursion Elements Elements Constraint Budget Results s Constraint Engine Results Display Engine Schedul e Element Referenc e Analyze Show User InterfacePRT#115 22 February 2012 Approved for Public Release
    • Example Analysis: Baseline Case Four budget elements, includes series and parallel events Summary Results Gantt Chart Date 10/1/2012 10/1/2013 10/1/2014 10/1/2015 9/30/2016 Task 1 Task 2 Start Date Finish Date Task 3 Task 1 10/1/2012 2/13/2016 Task 2 4/1/2013 1/25/2014 Task 4 Task 3 1/26/2014 6/18/2015 Task 4 1/26/2014 11/25/2015• Each task has an associated TI and TD cost, resulting in the following spending profile: Summary Results by Schedule Elements (Constant Year $) 250 This example assumed 200 up to $200 was available per year, as 150 Task 4 demonstrated by the $M Task 3 Task 2 black line 100 Task 1 50 0 2011 2012 2013 2014 2015 2016 2017 2018 PRT#115 22 February 2012 Approved for Public Release
    • Example Analysis: Excursion 1 • What if the budgets are constrained by 10% each year? – Because tasks will now begin slipping, it is also necessary to define constraints in the out-years beyond 2016, this example assumes funding continues at 2016 levels ($180 in this example) Summary Results Gantt Chart Summary Results by Schedule Elements (Then Year $) 200 Date 10/1/2012 10/1/2013 10/1/2014 10/1/2015 9/30/2016 9/30/2017 180 160Task 1 140 120 Task 4 $M 100 Task 3Task 2 80 Task 2 Task 1 60Task 3 40 20Task 4 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 Summary Results Gantt Chart - Original Budget Date 10/1/2012 10/1/2013 10/1/2014 10/1/2015 9/30/2016 9/30/2017 Original Duration Excursion Duration Original Cost Excursion CostTask 1 Task 1 1230 1541 $402.64 $453.18 311 day slip from Task 2 299 356 $69.35 $72.70Task 2 baseline Task 3 508 666 $57.99 $63.28 Task 4 668 874 $144.35 $170.78Task 3Task 4 PRT#115 22 February 2012 Approved for Public Release
    • Example Analysis: Comparison Excursion has a 12% increase in cost All excursion tasks have an increased duration  Task 1 has the largest increase in duration  Increases in duration correspond to increased TD costs Constraining the budget will avoid cost in those years, but the deferred work and presence of fixed costs will result in a net cost increase and schedule slip How can this information be used? Some examples:  It is apparent Task 1 is a large cost driver in the new case, prioritizing it at the expense of the other, shorter, tasks may result in a total cost savings  If the goal is a budget reduction, it may be preferable to focus the reduction on only one or two years instead of spreading it evenly These different scenarios can be run to explore the nature of the budget constraint PRT#115 22 February 2012 Approved for Public Release
    • Example Analysis: Excursion 2  Prioritizing Task 1 allows it to finish earlier, and moves the entire project back to the left Summary Results Gantt Chart Date 10/1/2012 10/1/2013 10/1/2014 10/1/2015 9/30/2016 9/30/2017 Task 1 Excursion 1 Finish Date Task 2 Baseline Finish Date Task 3 • Task 1’s earlier Task 4 completion frees up money for Tasks 3 and 4 • Final cost in this case: $708 Summary Results by Schedule Elements (Constant Year $) – Final cost in Excursion 1: $760 160 – Final cost in Baseline: $674 140 120 100 Task 1 $M 80 Task 2 Task 3 60 Task 4This is an example of how the tool can be 40 used to potentially optimize cost and 20 0 schedule within a budget constraint 2011 2012 2013 2014 2015 2016 2017 2018 PRT#115 22 February 2012 Approved for Public Release
    • Example Analysis: Excursion 3 What if some of the budget cuts can be reallocated? In this example, we will cause FY2013 to take most of the budget cuts, but then increase the budget in the out-years: 2013 2014 2015 2016 2017 $100.00 $200.00 $200.00 $200.00 $200.00 Summary Results Gantt Chart Date 10/1/2012 10/1/2013 10/1/2014 10/1/2015 9/30/2016 9/30/2017 Task 1 Task 2 Task 3 Task 4• This example finishes at nearly the same time as the original excursion – Total cost reduced to $743, compared to the excursion 1’s $760PRT#115 22 February 2012 Approved for Public Release
    • Modeling the Effect of Budget Constraints on Cost and Schedule COST RISK ANALYSISPRT#115 22 February 2012 Approved for Public Release 15
    • Current Techniques to Align Cost and Schedule via Uncertainty Analysis Total - Cost Estimate Uncertainty Analysis Results BY2010 $M 100.0% 4.5% 90.0% 4.0% 80.0% 3.5% Probability (Histogram) 70.0% Confidence Level (CDF) 3.0% 60.0% 2.5% 50.0% 2.0% 40.0% 1.5% 30.0% 20.0% Time Phased - Risk Adjusted Estimate 1.0% Technical $100 10.0% 0.5%Parameters $90 0.0% $75 $215 $356 $497 $638 $778 $919 $1,060 $1,201 $1,341 0.0% Allocated Dollars for 70% CL $80 Probability Histogram Confidence Level (CDF) CERs Point Estimate $70 Cost Uncertainty Analysis $60 TY $M $50 $40 $30 $20 Project Finish Date $10 100.0% 2.0% $0 90.0% 1.8% 80.0% 2006 2007 2008 2009 2010 1.6% 2011 2012 2013 2014 2015 2016 70.0% 1.4% Probability (Histogram) Confidence Level (CDF) 60.0% 1.2% 50.0% 1.0% 40.0% 0.8% 30.0% 0.6% 20.0% 0.4% 10.0% 0.2% 0.0% 0.0% 24 Mar 2012 24 Dec 2012 24 Sep 2013 24 Jun 2014 24 Mar 2015 24 Dec 2015 Probability Histogram Confidence Level (CDF) Schedule Schedule Uncertainty Analysis PRT#115 22 February 2012 Approved for Public Release
    • However, Budget Profiles Rarely Match Risk-Adjusted Time-Phased Estimates $100 $90 Allocated Dollars for 70% CL $80 Shortfall Point Estimate $70 Project Budget $60 TY $M $50 $40 $30 $20 $10 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Annual budget sufficient to cover estimated point estimate effort Shortfall in funding 70% effort for years 2007-2011 How Does Shortfall Impact Project?PRT#115 22 February 2012 Approved for Public Release
    • The Concept Tecolote Developed a ROM-level analysis technique for NASA to gauge the impact of budget availability on a project’s target cost confidence level The Technique requires:  Risk adjusted, time-phased cost estimate  Annual budget information  User input on how to address multiple items (e.g., penalties, etc) The General Approach  Compare estimated effort (i.e., point estimate, risk adjusted time phased results, or annual risk iteration results) to available budget  Identify and track budget shortfalls  Rollover unfunded effort, with associated inflation and productivity penalties, to future years  Apply logic to use available budget to fund rollover effortPRT#115 22 February 2012 Approved for Public Release
    • General Approach for Three Different ScenariosPRT#115 22 February 2012 Approved for Public Release
    • User Inputs and Controls The user has the ability to:  Select type of analysis to conduct  Point estimate  Risk-adjusted (e.g., 70%) cost estimate  Dynamic assessment of confidence level results  Specify budget scenarios  Advanced Considerations  Extend budget at peak  Incorporating fixed costs (LOE) into  Infuse/Reduce funds in specific consideration year  Conducting portfolio analysis  Allow budget carryover  Incorporate penalties for rollover  Outputs effort:  Initial phasing result for Target CL  Inflation considerations  Constrained phasing result  Productivity loss  Additional years of funding requiredPRT#115 22 February 2012 Approved for Public Release
    • Example Case – 70% Effort Exceeds Available Budget Phased budget and point estimateTY$M FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 TotalBudget $25 $55 $65 $80 $70 $60 $30 $15 $400Cost $21.8 $51.9 $63.6 $62.4 $52.9 $37.8 $18.9 $1.8 $311 Cost Estimate Uncertainty Analysis Results TY $M 100.0% 4.5% Cost risk analysis data (TY$M) 90.0% 80.0% 4.0% 3.5% Probability (Histogram) Point Confidence Standard 70.0% Confidence Level (CDF) 3.0% Mean CV 60.0% Estimate Level Deviation 50.0% 2.5% 2.0% 40.0% $311 42% $372 $168 0.45 30.0% 1.5% 20.0% 1.0% 10.0% 0.5% 0.0% 0.0% $75 $216 $357 $499 $640 $781 $922 $1,063 $1,205 $1,346 Probability Histogram Confidence Level (CDF) Cost estimate @ 70% confidence levelTY$M FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Total70% CLE $29.8 $71.2 $87.1 $85.6 $72.4 $51.7 $25.9 $2.5 $426 Budget Shortfall to Fund 70% CLE PRT#115 22 February 2012 Approved for Public Release
    • Understanding the Shortfall – Work Slips to the Right  Budget exceeds Budget vs 70% Risk-Adjusted Estimate - Surplus/Shortfall Budget vs Pt Estimate - Surplus/Shortfall  Total Budget phased point $25 estimate in every year inadequate to $26M Total Shortfall - $89M Budget Surplus  Limited70% CLE fund surplus in $20 early years Funds Available For Reserve Utilization   Largeglance seems At first shortfall $15 in early years, if that enough reservesAnnual Surplus / Shortfall - TY$M are available for $10 funds program cannot be obtained, $5 $5 effort will slip into future $0 $0 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 periods -$5 -$5  2007 work slips to 2008 -$10  and so on… $50M of work effort  Extended work -$15 cannot be done in carries 2007-2011 penalties -$20  Inflation -$25  Productivity What are Possible Budget Scenarios? PRT#115 22 February 2012 Approved for Public Release
    • Identifying Budget Scenarios Budget Scenario Considerations  Need to be realistic  Near-term funds are difficult to obtain  Annual increase must match capability to ramp up staffing levels and should track to required work  Should not have extreme changes year-to-year  Difficult to increase beyond peak spending year  Cannot upset overall portfolio needs Potential Options  Identify infusion of funds into specific years  Extend funding beyond peak funding year at or near peak value $100.000 $90.000 $80.000 $70.000 Project Budget $60.000 $50.000 $40.000 Budget Extension at Peak $30.000 $20.000 $10.000 $0.000 2007 2008 2009 2010 2011 2012 2013 2014 2015PRT#115 22 February 2012 Approved for Public Release
    • Example Case Results – Effort Rollover Fits Under Budget Constraint $100 70% Risk Adjusted Estimate RolloverEffort 70% Risk Adjusted Estimate $90 14 2 3 Budget Funded Effort BudgetEstimateEffort Point Funded Effort Budget Funded $80 70% Risk Adjusted Estimate Project Budget Extended Budget $70 Extended Budget $60 $50 $40 $30 $20 $10 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 20161. Initial Conditions indicate budget inadequate to fund 70% CLE2. Project funded to budget value3. Budget scenario created to extend budget at peak value and 70% time-phased estimate funded to extended budget values4. Impact of rollover effort funded in out-yearsPRT#115 22 February 2012 Approved for Public Release
    • Modeling the Effect of Budget Constraints on Cost and Schedule INTEGRATED COST AND SCHEDULE RISK ANALYSISPRT#115 22 February 2012 Approved for Public Release 25
    • Integrated Cost/Schedule Budget Constrained Reserve Phasing Model A tool is needed that accurately models the relationships between the work to be done, the annual budget available, and the overall cost and finish date of a project Tool can be used to determine appropriate annual budgets and reserve strategies to meet the Joint Confidence Level requirement The tool is called Budget-Constrained Reserve Phase (BCRPhase) 26 PRT#115 22 February 2012 Approved for Public Release
    • High - Level Model Concept Schedule Activities from JCL Models (or Project Schedules) are Mapped into Budget Organizations (Groupings) Links Between Budget Organizations are Identified Costs from JCL Models (or Projects Costs/Budget) are Mapped into Behavior Buckets within Budget Organizations Cost Distributions Obtained from JCL Models (or other Analytical Methods) are Defined for Each Element Discrete Risks from JCL Models (or Project Risk Lists) are Specified Annual Values are Identified for Each Budget Organization Monte Carlo Simulations are Generated to Determine Effort, Work is Adjusted to Fit Effort within Budget LevelPRT#115 22 February 2012 Approved for Public Release 27
    • Modeling Approach – Enabling via Budget Organization LevelsPRT#115 22 February 2012 Approved for Public Release 28
    • Example Simple Project Model (5 Budget Organization Items) BudgetEffort/Costs Schedule PRT#115 22 February 2012 Approved for Public Release 29
    • Model in Action – What Happens When Effort Exceeds Budget Availability Organization 1 Organization 2 Time Time-Driving Costs (Touch Labor, Materials, etc.) Schedule Activity Time-Driving Costs Driven By Schedule Slip Milestone Level Of Effort Costs Schedule DependencyPRT#115 22 February 2012 Approved for Public Release 30
    • Modeling the Effect of Budget Constraints on Cost and Schedule SUMMARYPRT#115 22 February 2012 Approved for Public Release 31
    • Summary Understanding connection between cost and schedule is of utmost importance for estimators Available funds and resources are major items that directly impact overall project schedule and end costs Tools have been developed and research is continuing to help us assess this intricate system Budget Duration Technical Reqts Work Plan Scope Cost Effort Size PRT#115 22 February 2012 Approved for Public Release 32
    • Thank YouPRT#115 22 February 2012 Approved for Public Release 33