PMGT1865 Chap.10 Estimating Project Resources
Estimating Project Resources
Project resources fall into four groups, people, technology, materials and consumables, and financial, and a distinction cuts across all four: some resources are consumed and gone, while others are applied and available again afterwards.
Managing resources means settling, in advance, how both the team and the physical assets will be estimated, acquired, managed and used, and it takes the project charter, the scope baseline, the project schedule and the requirements as inputs, using expert judgement, the organisation breakdown structure and the responsibility assignment matrix to produce a resource management plan.
Three questions have to be answered in order: what resources are required, when they are needed, and how to get them, whether by purchase, by hire or by internal request. The estimating methods split into a deterministic family, which uses a fixed value and treats risk as static and known, and a probabilistic family, which uses three point estimates and confidence intervals.
The chapter works through the three deterministic methods the unit teaches in detail: parametric, analogous and bottom-up.
What this chapter covers
- 01
Four resource types, and the consumed against applied distinction that cuts across them
- 02
Why a timetable drawn without asking who will do the work is rarely deliverable
- 03
Resource management defined in four verbs, and its inputs, tools and outputs
- 04
The three step sequence, and why the third step is the one with a lead time attached
- 05
Deterministic against probabilistic families, and what each assumes about risk
- 06
The seven deterministic methods and the three probabilistic ones, and choosing by available information
- 07
Parametric estimating: productivity rates, job management factors, and effort based results
- 08
Why an efficiency factor below one increases the labour required
- 09
Analogous estimating, and why the adjustment rather than the borrowed number is the method
- 10
Bottom-up estimating, and why it consumes the work breakdown structure directly
Estimating one project three ways
- +1Apply the factor first. 18 divided by 0.75 is 24 person hours as the expected average labour per room, and the factor being below one is what makes the labour go up rather than down.
- +1Scale by the quantity. 24 times 24 rooms is 576 person hours of total labour.
- +1Convert effort to duration. 576 divided by six fitters is 96 hours of elapsed work, and at an eight hour standard day that is 12 working days.
- +1For the analogous estimate, state the comparable and the difference before adjusting: a refit of similar scale at another campus took 40 days, and local conditions are assessed at plus 20 per cent.
- +1Adjust: 40 times 1.20 is 48 working days. Say what the 20 per cent represents, because an unexplained percentage is the weakest part of any analogous estimate.
- +1For the bottom-up estimate, multiply each package by its crew: 6 times 2 is 12, 8 times 3 is 24, 10 times 4 is 40, and 4 times 2 is 8.
- +1Aggregate up the branch: 12 plus 24 plus 40 plus 8 is 84 person days. This is effort rather than duration, so if the four packages run in sequence the activity occupies 28 elapsed days and if two overlap it occupies fewer.
Key terms
- Applied resource
- A resource that is used and then available again, such as people or equipment. Planning it means securing access for a window rather than ordering a quantity.
- Consumed resource
- A resource that is used up, such as materials or funds. Planning it means ordering a quantity and getting it delivered before the work that needs it.
- Productivity rate
- The standard time a unit of work takes under normal conditions, expressed in person hours per unit. It is the input a parametric estimate scales, and it is only as good as the match between its source and your site.
- Job management factor
- The efficiency multiplier that carries site conditions into a parametric estimate. Dividing by a factor below one increases the labour required, which is the direction most often reversed.
- Analogous estimating
- Using data from a similar project to estimate durations, with locality and other differences carried as an explicit adjustment. It applies to similar activities rather than unusual ones and is useful where no local data exists.
- Bottom-up estimating
- Decomposing a task using the work breakdown structure, estimating each piece individually and aggregating. It is the most detailed and accurate approach and the most time consuming.
Estimating Project Resources FAQ
Which estimating method should I use?
Whichever the information you hold supports, since the methods are not ranked. Parametric needs a productivity rate. Analogous needs a genuinely comparable past project. Bottom-up needs a complete decomposed breakdown. Vendor bid analysis needs a market and historical data needs records.
If you have none of those, expert judgement or a structured process such as Delphi is not a cop out but the only honest option, and saying so is a stronger answer than inventing a rate you cannot source.
Why does dividing by the efficiency factor make the work bigger?
Because a factor below one says the crew achieves less than standard output, so each unit consumes more labour. A factor of 0.75 means three quarters of standard productivity, and 18 divided by 0.75 is 24. The factor is where terrain, weather, restricted access, heritage constraint and regulatory friction are recorded, which is far more honest than quietly inflating the underlying rate and losing the reason.
What do I do when two methods disagree?
Do not average them. Find the assumption they disagree about, because that assumption is now the largest single uncertainty in the estimate, and naming it is worth more than either number.
A parametric estimate and a bottom-up estimate of the same activity that differ materially are usually disagreeing about crew size, about how much of the work is repeat units, or about whether the standard rate came from comparable conditions.
Assessment move
Every estimate you write in this unit should have three parts, so practise producing all three rather than just the number. Name the method and say why it fits the information available. Show the arithmetic with units on every line. State the assumption the estimate rests on, whether that is the rate, the comparable, the crew size or the length of the working day.
A number with no stated assumption cannot be challenged, which sounds like a strength and is actually a weakness, because it also cannot be defended. Keep effort and duration in separate columns from the first line you write, since one is what the budget is built from and the other is what the schedule is built from, and almost every confusing resource question resolves the moment you ask which of the two is wanted.
Finally, rehearse the direction of the efficiency factor until it is automatic: worse conditions mean more labour, which means dividing by a number below one.
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