Estimate settings are specified using the “Estimate Setup” sheet.

Purpose #

The Estimate Setup sheet is used to establish the settings that govern cost calculations for all Machine Records listed in the FEC Estimate.

Those settings are grouped as follows:

• Estimate Identification
• Rate Period
• Scheduled Cost Factor Values
• Default Preventive Maintenance Routine Employment Intervals
• Rent Cost Calculation Setup
• Cost Breakdown Structure Component Cost Applicability

Estimate Identification settings identify the Estimate’s name and describe the Estimate in general terms for future reference.

Rate Period settings establish:

• The date range for the active Estimate.
  • An Estimate’s data range is specified using the Ironworks/Rate Period-Specify command in Excel’s command bar.
• • Any Rate Period Start Date after 1/1/1900 can be specified.3 Rate Period duration options are available (1, 2, 3 years).
  • An Estimate’s date range can be edited at any time.
  • The effect of the new date range on monetary cost and resource requirements for the fleet is automatically calculated.

• The calendar ribbon, holiday list, and shift arrangements for the active Estimate. All of these are used to schedule the fleet’s monetary cost and resource requirements by the month.

Scheduled Cost Factor Values settings establish the unit cost of certain types of labor and fuel used to calculate the monthly monetary cost of employment for the fleet for the Rate Period. It is important that Scheduled Cost Factor values are input for every month in the Rate Period. Months without values cause the total cost for the Rate Period to be understated because the cost of a machine’s employment for that month for the respective cost factor is calculated as ZERO.

Default PM Routine Employment Interval settings establish the forecast employment thresholds used to trigger each of 5 possible preventive maintenance routines. Machine-specific intervals can be specified in the Employment Cost Factors sheet. PM Routine cost is specified in the Employment Cost Factors sheet.

Rent Cost Calculation Settings establish how daily rent rates (specified in the Employment Cost Factors sheet) are transformed into weekly and monthly rent rates. Those values are in turn used to calculate a machine’s rent cost based on its custody period and forecast employment.

CBS Cost Component Cost Applicability settings establish the rules for calculating the cost of the three types of custody (rent, lease, own). The settings act as “on/off” switches. If a cost component’s settings is “No”, that component’s cost for each month in the Rate Period is automatically set to ZERO. These settings have NO effect on the Employment Cost Factor values themselves or the cost calculations. Only the total is set to ZERO. That way, a component’s cost applicability setting can be turned off and on at any time.

Tips #

• Set the Rate Period duration as 1 year for developing “standard” charge rates for a fiscal year. Then change the start date every three months to update them for the NEXT 12 months.
• Set the Rate Period duration as  2 or 3 years for:
  • developing charge rates for long-term jobs;
  • developing client-specific charge rates good for more than 1 year.
  • developing analyses of the monetary cost and resource requirements for long-term or “revenue growth” planning..

• Use formulas instead of manually inputting values in the Scheduled Cost Factor table to escalate or de-escalate them from month to month.