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March 29, 2010

Using Escalation rates and the affects of a Resources Rate changing Mid-month

 

Below are the steps to clearly demonstrate the affect of using escalation rates in Cost Rate Tables in Project Server 2007.

 

STEP 1

The first step in this process is to setup two different rate tables. I used tables D and E so as not to interfere with any cost figures on other projects

  • Rate Table D (Figure 1)
    • In this table, the resources rate is $100 hourly until the 15th of March, when it changes to $200 hourly. Therefore, all cost associated with this resources work prior to March 15th will be calculated at the rate of $100 hourly (when using this rate table). From March 15th on, all costs associated with this person’s work will be calculated at the rate of $200 hourly (when using this rate table).
  • Rate Table E (Figure 2)
    • In this table, the resources rate is $100 hourly at all times, as no escalation rate is defined. All costs associated with this person are calculated at $100 hourly (when using this rate table).

clip_image002

 Figure 1

clip_image004

 Figure 2 

STEP 2

A project with two tasks was created and named Resource Rate Mid-month (Figure 3). Each task in this project is one calendar month in duration. The first task will reflect what costs are incurred when using the rate table in which the rate changes mid-month (D). The second task will reflect the costs incurred with the static rate table (E).

 

clip_image006

 Figure 3 

STEP 3

To clearly demonstrate the cost implications, we navigate to a Resource Usage view. The first task named Changes 3/15 ($100 - $200), specifies Cost Rate Table D, which has the escalated rate of $200 come into affect March 15th. The second task named No Change ($100), specifies Cost Rate Table E, which specifies a $100 rate throughout.

Comparisons (Figure 4)

  • The first change noted is in the table value of Cost
    • The first task reflects a cost of $28,800
    • The second reflects a cost of $18,400
  • The second change to note is in the time-phased section of the view.
    • The first task shows that although the work remains consistent from full-week to full-week, the cost doubles as of the week of March 15th, from $4000 weekly to $8000 weekly. Since the resources rate was selected to change from $100 hourly to $200 hourly as of March 15th (figure 1 above), this is the expected result.
    • The second task reflects a consistent $4000 weekly as expected, since the rate remains constant throughout (figure 2 above).

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Figure 4.

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