Costs for no work done in MS PROJECT 2016

Hi,

again my Blog reader has a problem, which is: “I have a question. Let’s say I have 4 hours of delay against a project as “ALL RESOURCES” had to wait for a crane to arrive before work could commence. There will be “no” productivity during these 4 hours! Yet, I will continue to charge the client for man hours since the delay is their fault. Can you show me how to accomplish this in MS Project ?”

OK! Let’s first create simple Project with one Task which will have two days duration, three resources, and assign them all to the Task:

image

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Now, let me analyze the real problem here. John, Mary and Paula need some input before they can work on the Task. In this case they are waiting for the Crane. So if Crane will be late, the Task will be late. And there is simple solution for that. We can move this task or put constraint like: Start no Earlier than if we, for example, now that Crane will be at the site at Wednesday, 21.02.2018. BUT! The REAL thing here is that we have to charge client for the waiting time. In this case, Start no Earlier Than constraint doesn’t work!

So, we have two options. First one is to add 4 hours of work per Resource which is 12 hours in total, like this:

image

When I put 60 hour (which is 12 more than 48) I will get:

image

As you can see, Duration is 2,5 days now (which is logical because all three resource will waiting for the Crane). And this is the easiest way to accomplish that. You can, of course say: “But they did not work anything, so how can we have hours when they didn’t work!?”. Actually, the did work! WAITING! This is also work, believe or not.

The second option is, for example, if your client tell you in advance that the Crane will be late, and that he will pay for it. In that case, you know that your resources are free, and you just want to delay your task for 4 hours per resource, like this:

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and we will get:

image

or in Task Usage View:

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As you can see all three Resources will work half day at Monday (because of Crane delay), the whole Tuesday, and the rest (which is missing half day from Monday), at Wednesday.

BUT! The since we now have total hours unchanged (48 hours), the Client is not going to pay for waiting. To avoid that we can calculate this waiting time like this:

  • John 4 hours * $100 per hour = $400
  • Mary 4 hours * $200 per hour = $800
  • Paula 4 hours * $300 per hour = $1.200
  • TOTAL for Client is $2.400

Now I will switch to the Cost Table:

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and then I will put $2.400 in the Fixed Cost column:

image

Let’s calculate Total cost:

  • John 16 hours * $100 per hour = $1.600
  • Mary 16 hours * $200 per hour = $3.200
  • Paula 16 hours * $300 per hour = $4.800
  • Fixed cost for waiting = $2.400
  • TOTAL for Client is $12.000

And one Tip! double click on the row 1 (on the Task):

image

Always put some kind of comment to the Task about Fixed Costs.

Regards!

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About Nenad Trajkovski

Location: Zagreb, Croatia Occupation: Project Manager Interests: Project Management and MS PROJECT He was born in Zagreb, Croatia at 1963. After completing his college he started working on projects in different business areas (banking, manufacturing, automotive industry, distribution, oil companies, etc.) developing and implementing ERP systems into different companies. He has got a lot of experience working with people in different business processes and also possesses great knowledge in information technologies and financial services. Today he works as a business consultant, adn Project Manager in PERPETUUM MOBILE d.o.o. Zagreb. He is a regular lecturer for Project Management in MS Innovation Center in Varaždin, Logosoft Sarajevo in Bosnia and Herzegovina and SEAVUS GROUP in Skopje Macedonia. He was named the best lecturer of WINDAYS 2008 while his lecture was also voted as the best. In addition, he was in TOP 10 lecturers at the MS SINERGY 2009 and MS VISIA 2009, 2010. Shares first place as the best lecturer of KulenDays 2009 and 2010 and PMI Conference 2009 in Zagreb. He is also a regular lecturer in the MS Community. He is a Certified Accountant and a PMP (Project Manager Professional) and a PMI-RMP (Risk Manager Professional), MCP, MCT, and Microsoft Certified Technical Specialist - Microsoft Project 2010. From 01.01.2012 awarded with MVP (Microsoft Most Valuable Proffesional - Microsoft Project)!
This entry was posted in Microsoft PRoject 2010, MS PROJECT 2016, PMI, PRoject Management and tagged , . Bookmark the permalink.

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