The Critical Path Method (CPM) - Construction Project Scheduling and Control - page 56

$50,000 in the red.” The scheduler can also experiment with different future scenarios
and even use simulation to predict possibilities and their outcomes.
8. Revise the database and record feedback
This process is continuous and iterative. All cost and time estimates for activities
are based on past experience. This past experience must be documented in a
well-organized, easy-to-retrieve fashion. Every new cycle should be more accurate
than the previous one. Suppose that you are estimating your new job on the basis
of the past three jobs. After finishing this job and inputting the new results, your
database now has four jobs, and the next job will be based on the four previous jobs,
and so on.
In addition to documenting and organizing, you must record any unusual events
and explain any adjustments that you make, because your record may be used for
future estimates. For example, your productivity level for a certain activity happens
to be significantly below normal because of extreme weather, sticky soil, hard rock,
equipment failure, low morale as a result of an accident, or some other reason. Your
productivity level may be above average because of an unusually favorable (or lucky 3 )
work environment. Work stoppage also needs to be explained and justified. If the
job being estimated is expected to be completed under unusual circumstances, the
estimate must be adjusted accordingly.
RESOURCE ALLOCATION AND LEVELING
In addition to the eight steps just discussed, two other optional steps may be imple-
mented for a comprehensive approach to scheduling as part of project management:
9. Cost/resource allocation (or loading)
Resources in this context include labor, equipment, and materials. Cost loading means
assigning the appropriate cost (or budget) to each activity. When the cost of all activi-
ties is added up, it should equal the project's budget. Resource allocation simply means
assigning the right amount of resources to each activity at the right time. The objective
of this step is to load each activity with the amount of resources it requires and, hence,
calculate its budget. This can help link scheduling with estimating and accounting.
At any point in the project, you should be able to tell the original (baseline) budget,
actual cost, estimate to complete (ETC) , estimate at completion (EAC) , and other
financial data for each activity and for the entire project. You can also link them to cost
accounting for procurement, invoicing, and other functions.
3 We teach that good results and smooth, flawless work are no accident or coincidence. However, the term
lucky is used in this instance to emphasize the reality of estimation.