This document appears to be a lecture on cost engineering and cost estimation for discrete part manufacturing. It discusses various philosophies for discrete part manufacturing like computer-aided process planning, concurrent engineering, group technology, just-in-time manufacturing, and lean manufacturing. It also discusses concepts like materials requirements planning, supply chain management, total quality management, and total cost management. The document provides information on direct and indirect costs for discrete part manufacturing. It presents a cost estimating guide form and provides an example cost estimate. Finally, it discusses break even analysis and different cost bases and break even points.
Ss 05 Cost engineering management training- nov 2017 - moustafa part ii ch 10Moustafa Ismail Abu Dief
Cost Management training course, Certified cost professional certification preparation course.
Cost Engineering- Commercial management- tendering and bedding.Process product manufacturing- skills and knowledge of cost engineering
Ss 05 Cost engineering management training- nov 2017 - moustafa part ii ch 10Moustafa Ismail Abu Dief
Cost Management training course, Certified cost professional certification preparation course.
Cost Engineering- Commercial management- tendering and bedding.Process product manufacturing- skills and knowledge of cost engineering
Project Controls Technician Apprentice - Joining the puzzle together by "Shan...Project Controls Expo
Project Controls Technician Apprentice - Joining the puzzle together by Shane Forth - Director of PMO for Costain Natural Resources, UK
Anil Godhawale - Programme Director for Project Controls Institute, UK
Catherine Lambert - Product Development Manager for ECITB, UK at at Project Controls Expo 2017, Arsenal Stadium, London
Cost management is the process of planning and controlling the budget of a business. Cost management is a form of management accounting that allows a business to predict impending expenditures to help reduce the chance of going over budget.
Case Study Of The Implementation Of Advanced Maintenance Techniques At Baa He...Andy_Watson_Sim
This case study highlights the history and the benefits bought about through improvements in maintenance planning and practice at BAA Heathrow Airport. Like other performance improvement practices, these changes saw some payback periods as low as one month based on minimum criteria only. Please contact me directly if you are interested in maintenance enhancements or go to www.simenergy.co.uk
This course is basically designed for metal engineering production management level-4 students. But any mechanical engineering profession who wants to know about how to calculate the manufacturing cost of a product can refer this note.
Project Controls Technician Apprentice - Joining the puzzle together by "Shan...Project Controls Expo
Project Controls Technician Apprentice - Joining the puzzle together by Shane Forth - Director of PMO for Costain Natural Resources, UK
Anil Godhawale - Programme Director for Project Controls Institute, UK
Catherine Lambert - Product Development Manager for ECITB, UK at at Project Controls Expo 2017, Arsenal Stadium, London
Cost management is the process of planning and controlling the budget of a business. Cost management is a form of management accounting that allows a business to predict impending expenditures to help reduce the chance of going over budget.
Case Study Of The Implementation Of Advanced Maintenance Techniques At Baa He...Andy_Watson_Sim
This case study highlights the history and the benefits bought about through improvements in maintenance planning and practice at BAA Heathrow Airport. Like other performance improvement practices, these changes saw some payback periods as low as one month based on minimum criteria only. Please contact me directly if you are interested in maintenance enhancements or go to www.simenergy.co.uk
This course is basically designed for metal engineering production management level-4 students. But any mechanical engineering profession who wants to know about how to calculate the manufacturing cost of a product can refer this note.
Telecom product cost models development approachParcus Group
Presentation to Pacific Islands Telecom Association (PITA) AGM and Conference in Tahiti 2016 on telecom businesses cases and product cost models development approach.
Overview of the fundamental roles in Hydropower generation and the components involved in wider Electrical Engineering.
This paper presents the design and construction of hydroelectric dams from the hydrologist’s survey of the valley before construction, all aspects and involved disciplines, fluid dynamics, structural engineering, generation and mains frequency regulation to the very transmission of power through the network in the United Kingdom.
Author: Robbie Edward Sayers
Collaborators and co editors: Charlie Sims and Connor Healey.
(C) 2024 Robbie E. Sayers
Hybrid optimization of pumped hydro system and solar- Engr. Abdul-Azeez.pdffxintegritypublishin
Advancements in technology unveil a myriad of electrical and electronic breakthroughs geared towards efficiently harnessing limited resources to meet human energy demands. The optimization of hybrid solar PV panels and pumped hydro energy supply systems plays a pivotal role in utilizing natural resources effectively. This initiative not only benefits humanity but also fosters environmental sustainability. The study investigated the design optimization of these hybrid systems, focusing on understanding solar radiation patterns, identifying geographical influences on solar radiation, formulating a mathematical model for system optimization, and determining the optimal configuration of PV panels and pumped hydro storage. Through a comparative analysis approach and eight weeks of data collection, the study addressed key research questions related to solar radiation patterns and optimal system design. The findings highlighted regions with heightened solar radiation levels, showcasing substantial potential for power generation and emphasizing the system's efficiency. Optimizing system design significantly boosted power generation, promoted renewable energy utilization, and enhanced energy storage capacity. The study underscored the benefits of optimizing hybrid solar PV panels and pumped hydro energy supply systems for sustainable energy usage. Optimizing the design of solar PV panels and pumped hydro energy supply systems as examined across diverse climatic conditions in a developing country, not only enhances power generation but also improves the integration of renewable energy sources and boosts energy storage capacities, particularly beneficial for less economically prosperous regions. Additionally, the study provides valuable insights for advancing energy research in economically viable areas. Recommendations included conducting site-specific assessments, utilizing advanced modeling tools, implementing regular maintenance protocols, and enhancing communication among system components.
Saudi Arabia stands as a titan in the global energy landscape, renowned for its abundant oil and gas resources. It's the largest exporter of petroleum and holds some of the world's most significant reserves. Let's delve into the top 10 oil and gas projects shaping Saudi Arabia's energy future in 2024.
Water scarcity is the lack of fresh water resources to meet the standard water demand. There are two type of water scarcity. One is physical. The other is economic water scarcity.
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Ss 06 cost engineering management training- nov 2017 - moustafa part ii ch 11 12 13
1. KSU- CCP/CCT Cost Engineering Training 1018 BTA - Dr. Moustafa Ismail 2018 LEC- II 1
Cost Engineering Management
CCP/CCT Training Course:
Association for the Advancement of Cost Engineering
King Saud University
March 2018
LECTURE 6
وبركاته هللا ورحمة عليكن السالم
2018
2. KSU- CCP/CCT Cost Engineering Training 1018 BTA - Dr. Moustafa Ismail 2018 LEC- II 2
Contact details
moustafa1_ismail@yahoo.com
https://www.linkedin.com/in/moustafa-ismail-
abu-dief-93798a16/
00966560074207
0096598922125
https://twitter.com/moustafaabudief
https://www.slideshare.net/moustafismail
March 2018
3. March 2018KSU- CCP/CCT Cost Engineering Training 1018 BTA - Dr. Moustafa Ismail 2018 LEC- II 3
CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
• Chapter 11 Discrete Part Manufacturing
4. March 2018KSU- CCP/CCT Cost Engineering Training 1018 BTA - Dr. Moustafa Ismail 2018 LEC- II 4
CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Discrete Part Manufacturing:
• Production of separate, individual products,
• are solid products which have the dimensions and sizes for final use, whereas solid
continuous products will be further processed. (Roll of steel).
• continuous manufacturing is for large units further processed, like a roll of sheet
steel, or units in fluid form with no distinct shape.
• There are 7 main component operation discrete manufacturing:
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Discrete Part Manufacturing Philosophies
• Computer-Aided Process Planning (CAPP)― automatically generate the process plan
to produce the component from the component drawing & specifications.
Include the sequence of the operations, operation parameters, optimizes time, C, Q.
Two approaches to CAPP :
a- Variant approach similar parts and modifies,
b- The generative approach starting from scratch.
• Concurrent Engineering: Approach to the product concurrent design and manufacture.
It imposes to designers to consider all elements of product lifecycle.
• Group technology: considers underlying similarity of component parts and
manufacturing process.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Discrete Part Manufacturing Philosophies- continue
• Just-In-Time: raw materials are delivered when required, inventory = zero,
parts are not produced until ordered only, this is typically related to the “Kanban”
system or “pull” system
• Lean manufacturing, shortens lead times, reduce costs & waste. It is a continuous imp. process
i. Reducing waste through scrap reduction, improved yields and developing new
products from waste materials.
ii. Improving employee performance, skills, & satisfaction via training
&recognition
iii. c) Improve processes, process rates, and capabilities
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Discrete Part Manufacturing Philosophies- continue
• Materials Requirements Planning MRP :
Keeping records for material inventories, supplies, parts in various production
stages, scheduling of production, purchasing of parts, &orders , dates in and out
for customers & suppliers, uses bill of material, inventory.
• Supply chain management: SCM
Different suppliers are involved in material of complex production.
Assures parts arrive when required, to avoid large inventories or production stoppages.
It requires suppliers involvement in design process to eliminate inefficient, unneeded
operations / components.
As the material moves in the SCM, it involves information for, delivery status,
financial flow, and payment schedule.
Main goals for SCM: a- Reduce inventory b- Reduce the time-to-market c- Reduce cost
D-Improve quality.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Total quality management
A leadership philosophy, organizational structure, and working environment that look after
and promotes a personal accountability, responsibility for quality, and a work for
continuous improvement in products, services, and processes.
Total Cost Management (TCM)―
TCM is application of expertise to plan & control resources, costs, profitability & risk.
TCM is a systematic approach to managing cost throughout the life cycle of any
enterprise, program, facility, project, product or service.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Basic Cost Relationships VVI
1. Prime Cost (D.Cost) =D material C +D labor C + D engineering C + D exp
2. Manufacturing Cost (factory C) = prime cost + factory expense
3. Production Cost = manufacturing cost + administrative expense
4. Total Cost = production cost + marketing, selling, and distribution expense
5. Selling Price = total cost + mark-up (profit and taxes)
Ladder of costs for
discrete part M.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Cost Estimating for Discrete Part Manufacturing
• Direct and Indirect Costs
For example, in the copying of a report on a copy machine, costs are:
Costs: paper, toner, machine rate, operator, and staple cost.(in D. burden).
Direct M In DC (capital +operating) D. L (wages and benefits)
Note out of pocket costs are savings if no copy is made(D costs operator and paper)
Energy consumed, purchasing costs, and installing costs are direct costs, but
considered as indirect as the machine is used for many time.
Indirect costs also, those cannot be directly correlated to product, like
supervision, administrative C, maintenance, material handling, & legal, etc.
For large scale firms, indirect costs can include cost of research &
development, it should be recovered within products being produced and so
it is considered indirect burden costs.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Cost Estimating Cost Estimating Guide Form
A form particular to the particular products produced must be designed to obtain good
cost estimates. The general form is illustrated in Table 11.2.
The mark-up amount is calculated as:
Mark-up (amount) = Total Cost x [% MU / [1 - % MU]] ……………..Equation 11.6
Ex. if the T costs are $10,000 and & mark up is 20 percent, the mark-up amount to be:
Mark-up (amount) = $10,000 x [0.20 / [1.00 – 0.20]] = $2,500
The selling price would be $10,000 plus $2,500 mark-up or $12,500.
The selling price can be determined directly from the total costs by:
Selling Price = Total Cost / [1 - % MU] ……………….. Equation 11.7
Selling Price = $10,000 / [1 - 0.20] = $10,000/ 0.80 = $ 12,500
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Example: Cost Estimating for Discrete Part Manufacturing
SK6- Pg. 162
20% of selling price = [20/(100-20)] % of Total Cost = 25% of T C
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Break Even Analysis (BEA)
2 critical issues in BEA to be considered;
o (A) the cost base,
o (B) the various BE points.
(A)the cost base
i. Time base: Determines production time at specific BE point & controlled at the plant level.
ii. Quantity-based: Determines production quantity at specific BE point for marketing,
sales, and top management to forecast yearly sales. Provides little assistance at plant
management level as quantity is specified by customer.
Variable cost in the quantity based system is fixed in the time based system & v-versa.
Increased quantities are preferred in the quantity-based system.
Decreased times are preferred in the time-based system.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Break Even Analysis (BEA)
Cost basis
a- Quantity-based system (fixed time)
i. Fixed Costs: Costs are independent of production quantity (property taxes,
administrative salaries, research and development expenses, and insurance).
ii. Variable costs: Cost dependent of production Q, direct material &direct labor C.
iii. Semi-Variable costs: Costs that neither fixed nor variable (maintenance cost).
b- Time-based system:(Fixed Quantity)
i. Fixed costs: Costs that time independent (direct material costs)
ii. Variable Costs: Costs that are time dependent, (property taxes, administrative
salaries, research and development expenses, and insurance.
iii. D labor may be fixed or variable based on the company identification &policy.
CostBasisTimebasedsystem
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Break Even Analysis (BEA)- continue
Break-Even Points:
1. Shut down Point (SD): Quantity or time where manufacturing costs = revenues.
2. Cost Point (C):Quantity or time where total costs = revenues.
3. Required Return Point (RR): Quantity or time where
revenues = total costs + required return.
4. Required Return after Taxes Point (RRAT): Quantity or time where
revenues = total costs + required return and the taxes on the required return.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Break Even Analysis (BEA) Example:
- A new job (request) is being considered in the foundry. The order is for 40,000 castings
and the tentative price is $3.00/casting. The pattern will be designed for 4 castings/mold
and the pattern cost has been quoted at $10,000. The molding line is the rate controlling
step in the production process in this particular foundry and the production rate is 125
molds/hr.
Solution:
The estimated time for the production of the 40,000 castings would be determined by:
(40,000 castings) / (4 castings/mold x 125 molds/hr) = 80 hr
The costs and overheads are included in Table 11.4 and the corporate tax rate is estimated
at 40%.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
OH
cost
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Solution: Break-Even Analysis----- A. Production Quantity-Based Calculations
----“X” as the variable for the no. of units of production.
1. Shutdown Point
Revenues = Production Costs
3X = Material Costs + Labor Costs + Tooling Costs + Plant Overhead Costs
3X = 1.50X + 0.33X + 10,000 + 8,800 then X = 16,068 units-
2. Cost Point
Revenues = Total Costs
3X = Production Costs + Overhead Costs
3X = 1.83X + 18,800 + 12,000 then X= 26,234 units
3. Required Return Point
Revenues = Total Costs + Required Return
3X = 1.83X + 30,800 + 9,600 then X = 34,530 units
4. Required Return After Taxes
Revenues = Total Costs + Required Return + Taxes for Required Return
3X = 1.83X + 40,400 + 9,600 x (TR/(1-TR))
3X = 1.83X + 40,400 + 6,400 then X = 40,000 units
Q< 16,068, reject order
as manufacturing costs
not recovered.
26,234 > Q > 16,068,
manufacturing costs
recovered but not all OH
26,234 < Q <34,530 all
C recovered but not all
required R recovered
34,530 < Q < 40,000
costs & RR recovered,
but not all taxes recovered.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Break-Even Analysis Solution: interpretation
Q< 16,068, reject order
as manufacturing costs
not recovered.
26,234 > Q > 16,068,
manufacturing costs
recovered but not all OH
26,234 < Q <34,530 all
C recovered but not all
required R recovered
34,530 < Q < 40,000
costs & RR recovered,
but not all taxes recovered.
SK 6 Pg. 167
UCTC
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Break-Even Analysis Solution: B. Time -Based Calculations
OH
cost
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Break-Even Analysis Solution: B. Time -Based Calculations
1. Shutdown Point
Revenues = Production Costs
120,000 = Material Costs + Labor Costs + Tooling Costs + Plant Overhead Costs
120,000 = 60,000+165Y+10,000+110Y then, Y = 181.8 hrs reject order as manufacturing cost not recovered.
2. Cost Point
Revenues = Total Costs
120,000 = Production Costs + Overhead Costs
120,000 = 70,000 + 275Y + 150Y then, Y = 117.6 hr. manufac. costs recovered, but not all OH C.
3. Required Return Point
Revenues = Total Costs + Required Return
120,000 = 70,000 + 425Y + 120Y then, Y = 91.7 hr. all costs recovered, not all RR recovered
4. Required Return After Taxes
Revenues = Total Costs + Required Return + Taxes for Required Return
120,000 = 70,000 + 545Y + 120Y + [ 120Y x (TR/(1-TR)) ]
120,000 = 70,000 + 425Y + 120Y + 80Y then, Y = 80.0 hr costs & RR recovered, but not all taxes recovered.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Solution: B. Time -Based Calculations Interpretation:
Interpretation:
A-For Time>181.8, reject order as manufacturing cost not recovered.
B-181.8> Time> 117.6, manufac. costs recovered, but not all OH C.
C-117.6 > Time > 91.7, all costs recovered, not all RR recovered
D-91.7 >Time >80, costs & RR recovered, but not all taxes recovered.
E- Time < 80, required return will exceed the desired required return after taxes.
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CCP Certificate Cost estimation Chapter 11 Discrete Part Manufacturing
Solution: B. Time -Based Calculations Interpretation:
If we have 4 H delay resulting from a machine breakdown, time based BEA can answer.
For 84 Hrs. Profit = Revenues – Costs
Profit = $120,000 – ($70,000 + $425/hr. x time (hr.)) = $50,000 - $425/hr. x 84hr.
Profit = $14,300 Profit after taxes = (1-TR) x 14,300 = 0.6 x 14,300 = $8,580
For 80 Hrs. Profit=Revenues–Costs profit=$120,000-$70,000-425$/hrx80hr
Profit=$16,000 Profit after taxes=0.6x$16,000=$9,600//
Then 4 Hrs. losses = 16,000-14,300= $1700
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CCP Certificate Section 3. Planning and Scheduling
Planning and Scheduling
Chapter 12: Project Planning
Chapter 13: Scheduling
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CCP Certificate Section 3. Planning and Scheduling Chapter 12
Definitions:
• Planning
Can be defined as influencing the future by making decisions based on missions,
needs, and objectives. what and how?
It is the process of stating goals and determining the most effective way of reaching
them.
It is the determination of a project’s objectives with identification of the activities to
be performed, methods and resources to be used for accomplishing the tasks,
assignment of responsibility and accountability, and establishment of an integrated
plan to achieve completion as required. what and how?
• Scheduling
A Schedule incorporates durations and dates into the sequence of events necessary to
accomplish the plan. who and when?
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CCP Certificate Section 3. Planning and Scheduling Chapter 12
Objectives:
Understand the role of the project manager and the project planner in project planning.
Understand planning strategies.
Understand the importance of planning, and Understand planning deliverables.
• Importance of planning.
Increase productivity.
The work is monitored and controlled using the agreed plan as baseline
Planning cycles provides updates to the company knowledge base & lessons learned
Without a firm commitment to the planning cycle, a company is continually “reinventing
the wheel,” and wasting time and $.
Establishing a Planning Culture
o Planning exists in a hierarchical structure made up of policies, strategic plans.
o Companies adopts planning reap benefits over other companies whose reactive
random.
o The planning culture includes:
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CCP Certificate Section 3. Planning and Scheduling Chapter 12
Establishing a planning culture- continue
Preparing a clear scope definition
Undertaking planning as a team effort buy-in.
The plan provides a means and structure for communication between the participants.
Providing a baseline plan prepares for managing the execution phase.
Developing a baseline plan also enables project control.
Conducting incremental phase and post-completion reviews greatly reduces the
potential for planning errors on activities in subsequent phases. (trend management).
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CCP Certificate Section 3. Planning and Scheduling Chapter 12
Planning Tools
1- Commercial handbooks and software programs
2-Standard, company-wide, policies and operating procedures
3-Model plans ( go bys or templates)
4- Codes of Accounts structured to catalog work, cost accounts, resources, other info.
5-Historical data base
6- Checklists
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CCP Certificate Section 3. Planning and Scheduling Chapter 12
Major components of project planning ( steps):
1. Establishing project objectives and defining how to achieve the objectives.
2. Identifying stakeholders, roles, responsibilities, and effect on scheduling & planning.
3. Identifying contract requirements, including project delivery methods. The contract
delivery method is a factor that determine planning effort extent by the project team.
4. Identifying constraints and variables considered by the team during planning process.
5. Determine the scope of work, client requirements, schedule hierarchy, division of
responsibility, project plan review, approval requirements, and distribution.
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CCP Certificate Section 3. Planning and Scheduling Chapter 12
Major components of project planning ( steps) continue:
6. Identifying major work activities (phases) and deliverables (goals) and the preferred
sequence in which they are to be accomplished.
7. Establishing an integrated, time phased plan for the major work activities to achieve
project completion as required. 8. Identifying a process for further scope of work
element cost/schedule definition.
9. Identifying project management coordination necessary to track and report progress.
10. Developing non-schedule related planning methodologies, such as logistics planning.
11. Preparing and achieving approval of the “Project Execution Plan”, which is the base
for many documents -CPM Schedule; which is for monitor & control the work.
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CCP Certificate Section 3. Planning and Scheduling Chapter 12
Constructability planning
Constructability & construction pre-planning used interchangeably.
Constructability is largely concerned with the technology, methods of installation,
and the associated costs. Pre-planning deals with the scheduling of resources,
organization, site access, and infrastructure. Both are intended to reduce time and
costs by considering alternative design and/or installation methods.
Examples would be steel or precast concrete structure frame, site fabrication or
prefabrication and/or modularization.
Constructability is not the same as value engineering, but the terms overlap as each
tends to optimize time and cost performance.
Constructability usually occurs after design is finalized; however, constructability can
involve changes to the design details to optimize physical performance of the work.
Frequently, trade contractors and material suppliers will suggest minor design
changes which result in significant savings in time and cost.
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CCP Certificate Section 3. Planning and Scheduling
Section 3
Planning and Scheduling
Chapter 13: Scheduling
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CCP Certificate Section 3. Planning and Scheduling Chapter 13
Scheduling
Definition:
Scheduling is the process that converts the project’s work execution plan into a detailed
road map, which if followed and adjusted to account for change and/or delay as it may
occur, will assure timely project completion.
Scheduling is one of the key tools used for monitoring and controlling projects to ensure the
objectives of cost, quality, and time are met.
Schedules provide the baseline against which progress is measured and reported. Schedules
are used to assess time impact of changes(claim) to the work scope as well as forecast
completion dates for key milestones;
Benefits from Scheduling
1. It provides a basis for management of the work, 5. Integration of budget, C, recourses
2. improves communications, and facilitates coordination. 6. Used for IPC’s
3. improves the effective use of resources.
4. gives the user a baseline to monitor and control the work.
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Schedule development 1- Bar Chart (Gantt Chart) Method
Bar Chart/Gantt Chart, is primarily meant to control the time elements of program/ project.
no direct relationship ties depicted between the activities, it is not possible to directly assess
the impact of one activity on another or on the time of completion of the project.
When preparing a bar chart, the work effort must be divided into components, which are
then scheduled against time.
Preparation steps:
Analyze the project and specify the basic approach to be used in its execution.
Segment into activities that can be scheduled. Then Estimate activity duration.
Place the activities in time order, considering both sequential and parallel performance.
Adjust the diagram until the specified completion date, if one exists(imposed), is satisfied.
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• Advantages of Bar Chart
simple to read.
The plan, schedule, and progress of the program or project can be depicted graphically on a
single chart.
• Disadvantages of Bar Chart
Doesn’t show activity relationship , logic not shown , no Critical Path
Difficult to Determine Overall Project Status
Manual and not for large scope.
2- Critical path method
The Critical Path Method (CPM) is a scheduling technique using arrow, precedence, or
PERT diagramming methods to determine length of a project through activity & phasing
modeling, which can then be used to identify the activities & constraints on the critical path.
CPM enables a scheduler to do the following:
o Determine the shortest time for completion.
o Identify critical activities that cannot be slipped or delayed.
o Show potential slippage or delay (float) available for non-critical activities.
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3- (PERT)Program evaluation and review technique
(PERT) is a probabilistic technique, originally developed & used by USA government.
It is indeterminate process for activity and project durations, while CPM is considered
a deterministic process.
PERT ≈≈ CPM
The network of activities developed for PERT are similar to the
Arrow Diagramming Method (ADM) and Precedence
Diagramming Method (PDM) networks. Because of the
similarity and resemblance of a CPM network to PERT, the
term PERT has been used as a synonym for CPM.
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3- (PERT)Program evaluation and review technique
Arrow Diagramming Method (ADM)
Nodes in the network identify the beginning and end of each activity.
Beginning node is the "i" node and the ending node the "j" node. Each activity
has a unique two number identification, referred to as the activity "i - j" number.
Activity ID has a tail and a head
And is unique.
Activity i-j 1-2
1 Start 2 end
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3- (PERT)Program evaluation and review technique
Arrow Diagramming Method (ADM)
Activities sequencing
Node has no duration
No meaning for arrow direction, length
(ADM) is a method of constructing a logical network of activities using arrows to
represent activities, a node or event to each end, & connect those head to tail.
ADM depicts the sequence, predecessor, & successor relationships of activities.
No overlapping, divide activity if needed to avoid overlap.
Dummy activities have zero duration, just used to show relationships.
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Precedence Diagramming Method (PDM)
(PDM), the logic network is constructed using nodes to represent the activities &
connecting them by lines that show logic relationships. (links)
The nodes (activities) can be circles or boxes.
Predecessor are activities precede other activities.
Successor are activities follow other activities.
Allows overlap, such as lags, constraints, different relationships, FS. SS, SF, FF
WORK BREAKDOWN STRUCTURE
effective tool to ensure all scope is planned and modeled in the CPM schedule.
A valuable management tool for planning, executing, and controlling projects.
Is defined as a tree structure of successively further breakdowns of work scope into
component parts for planning, assigning responsibility, managing, controlling, and
reporting project progress.
The top of the tree represents the whole, lower levels represent divisions of the whole
on a level by level basis till the smallest accepted level.
Activity A Activity B
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WBS example:
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Scheduling techniques:
Making Time Calculations
Establishing a network then establish activity duration then calculate start finish dates.
Each activity: Early Start (ES), E. Finish (EF), Late Start (LS), and Late Finish (LF).
Start = in the morning of the day
End=in the finishing work hour of the day--- followed by a milestone in the same date
An event or milestone occurs on the evening of the day its last predecessor finished.
Forward and Backward Pass
Forward pass
The forward pass through the network determines each activity's ES and EF and
the project's duration or the earliest date a project can finish.
Forward pass is used to calculate ES, EF):
ES of first activity=1 NOT zero
EFA=ESA+DA-1 1+8- 1= 8
ES successor =EF Pred +1 Select EF of the latest activity of the predecessors
Predecessor
1 8 8
Activity A
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Overlapping Networks Techniques
1. Finish-to-Start + lag (FS+ N)
2. Finish-to-Finish + lag (FF + N)
3. Start-to-Start + lag (SS +N)
4. Start-to-Finish + lag (SF + N)
Where “N” is lag
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Scheduling techniques:
Forward pass example
EFA = ESA + DA – 1
10=1+10-1
ESSUC =EFPRED + 1
Smallest of 20,30 20+1=21
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Scheduling techniques – continue
Backward pass
It determines each activity's LS and LF as well as providing a basis for calculating
Float values for each activity.
LF of the terminal activity is assigned as being equal to its EF or as per contract
LS of an activity = LF- D + 1.
LF for all other activities is equal to the numerically smallest LS of succeeding
activities, minus one day.
o LF of terminal activity = LF of this activity (or as per contract)
o LSA=LFA–DA+1
o LF Pred=LS suc-1 LS succ is the smallest when several successors).
100 3 102
104 106
Activity A
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Scheduling techniques – continue
Backward pass Example.
36-1=35
21-1=20
20-10+1= 11
10-10+1=1
35-15+1=2120-10+1=11
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Scheduling techniques – continue
Work Days and Calendar Days
The calculated dates are shown calendar days.
Many projects are worked on a five-day work week with weekends and certain
recognized holidays not normally planned as working days.
Nonworking days must be accounted for in the total project duration.
Contracts indicates total calendar days.
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Scheduling techniques – continue
Forward and Backward Passes for Overlapping Relationships
Forward pass
SS: ESsuc=ESpred +N
FS: ESsuc =EFpred+N+1
FF: EFsuc = EFpred+N Then, ESsuc = EFsuc – D + 1
ESsuc=ESpred +N
11=1+10
EFsuc=EFpred +N
40 =35+3=38xxxx
40=30+10….ok
ESsuc= EFsuc -D+1
31=40-10+1
40
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Scheduling techniques – continue
Forward and Backward Passes for Overlapping Relationships
Backward pass
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Scheduling techniques – continue
Float
o Free float (FF) is the amount of time that the completion of an activity can be delayed
without delaying any other following or succeeding activity.
FF= ESb - EFa -1 use the succeeding activity with the smallest ES.
o Total Float (TF) is the amount of time that the completion of an activity can be delayed
without delaying the completion of the project's terminal activity.
TF = LFa - EFa = LSa –ESa
It is cautioned that TF is shared. If a chain of activities possess 15 days of TF and there are four
activities in the chain, each activity does not possess 15 days of TF independent of the other
activities in the chain. If the first activity in the chain uses all 15 days, the TF along the chain is
reduced to zero. Any further delays to any activities in this chain will result in a delay to the
project's completion.
If TF=15 in a chain, and the first activity utilized 15 day, then the total float becomes 0 TF=Zero.
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Float
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Scheduling techniques – continue
Critical Path
o Total Float defines the critical path of the project.
o The critical path is defined as the longest chain or chains of activities, in terms of time or
duration, through a network.
o There will be at least one continuous chain through the network.
o A discontinuous network is one where an imposed activity time constraint has disrupted
the chain of activity date calculations.
Constraints
o Start & finish of activities, at times, must be constrained to represent what actually occur
Ex. Constraint: the installation of a pump is scheduled to begin on September 17, but the actual
pump delivery from the vendor is not scheduled until October 23. Therefore, the installation of
the pump is constrained by the delivery of the pump.
o Major types of Constraints:
1. Start-on 2. Start-no-earlier than
3. Start-no-later than 4. Finish-on
5.Finish-no-earlier-than 6. Finish-no-later-than 7. As late as possible
No-earlier-than (NET) constraints affect only the forward pass calculation.
No-later-than (NLT) affects only the backward pass calculation.
“On” is a combination of NET and NLT and affects both the forward and backward pass.
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Scheduling techniques – continue
Constraints
Start Finish Float
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Scheduling level
Scheduling Levels and Reporting
o Scheduling levels are schedules used by different management level.
o Senior management require a summary level (milestone schedule).
o Hands-on managers require detailed project schedules and short-interval schedules for day-to
day management.
o Each level is an integral subdivision of the previous level and presents more detailed activities
and relationships.
1. Level 1―Milestone Level Schedule( top management)
Include project start, design complete, major procurement items, mobilization,…etc.
2. Level 2―Project Summary Level Schedule
Include summary of engineering, procurement, main equipment fabrication & delivery,
main structures, installation, start-up, and testing & commissioning.
Upon developing detailed schedule , it must be summarized to replace the previously
summary and milestone schedules.
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Scheduling level
3. Level 3―Project Detailed Schedule―
Displays the lowest level of detail necessary to control the project through job completion
This Level 3 schedule supports the planning effort for determining and assigning resources.
Ex. Level 3 schedule:
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Scheduling level
4. Level 4―Short-Interval Schedule “ short cycle schedule”
Indicates from2 to 6 weeks look-ahead (denuding on complexity & project duration) schedule
that shows resource(s) assigned and detailed work activities and is used for planning &
progress reporting purposes, review and assignment of current week work plans, and advance
planning for the near term future. ( see example below)
best used for communicating information and are developed by masking the relationships. It
is one of the best tools for conveying the planning requirements to those performing the work.
Ex. Level 4 schedule
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Schedule Reporting
1. Early Start Dates Report― A listing of activities sorted by early start dates. This listing
provides the scheduler and management with the activities that are scheduled to start by
ascending dates.
2. Total Float Report―The activities are sorted by total float in ascending value beginning with
values of TF = 0. The report first lists all activities that are on the critical path (TF = 0), and
then other activities grouped by total float values.
3. Precedence Report―
o A listing by activity early start dates. However, the significance is the identification of all
predecessor and successor activities for each activity. This report is used by planners for
debugging schedules and comparing relationships on the network diagrams to those in
the schedule reports.
Schedule Plots
1. Logic Diagrams―Net work diagram depict activity relationship, it was used in sample above
2. Time-scaled Logic Diagram―shows activity relationships and displays the activities in their
scheduled place in time.
3. Early Start Date Schedule (Bar Chart)―Bar charts without logic relationships shown, are
used more frequently by supervision and management to track work.
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Managing Changes in the Schedule
Schedule Updating:
Actual durations < > original estimated durations, also working sequence changes.
Correction of changes through schedule updating can forecast any slippage, hence, actions taken.
Reasons for Updating
1. Reflect current project status
2. Keep the schedule as an effective management tool
3. Document performance
4. Provide documentation to plan for changes and support delay analysis
5. Provide updated records to react in corrective actions.
Updating Intervals for Managing Changes
Most projects update between a week and one month.
Updating Procedures for Managing Changes
Updating and revising a schedule may require several iterations before management and
supervision decides on an acceptable plan.
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Managing Changes in the Schedule.
Updating Procedures for Managing Changes
1. Gather all current information.
2. Identify and plan for any changes to the work and Input these changes into the schedule
3. Recalculate the project schedule.( completion date)
4. Perform analysis and prepare reports for management review.
5. Evaluate and adjust the updated schedule according to management’s and supervision’s
review and direction.
6. Issue updated schedule to all interested parties.
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