Flexible Resource Costing

Microsoft Project offers flexibility in the way it allows resources to be costed. For example, in a previous article we saw how material and flag-fall costs are treated.

It is also possible to apply more than one cost rate to a specific resource. For example, suppose a division within your company supplies a service commercially but also supplies this service both to other divisions within the company and also to those within the division supplying the service. This might require three different cost rates - an external rate, a discounted rate and a zero rate.

Further, it might be necessary to have time-varying rates, so that planned rate increases can be programmed into the schedule. Any work performed after the date of increase will be charged at the new rate.

To see how this can be achieved, simply move to a Resource screen (say Resource Sheet) and double click any resource you see in the table. Now move to the 'Cost' Tab on the ensuing dialogue box. Firstly, you will see five tabs across the top, marked 'A (default)' through to 'E'. These provide five different cost rates with the 'A' tab being the one that contains rates entered normally on the Resource Sheet screen. This means that the same person or group can have up to five different rates.

You will notice that a table rather than a field is provided in the form. This is because you need to be able to enter time-varying rates when this is appropriate. Before we examine this component of the costing features of Microsoft Project, we need to establish how we inform Microsoft Project of which tab or cost rates we wish to use.

To see how to do this, create a task and a resource and assign the resource to the task in the usual way. You can use the split screen method (Windows - Split) to achieve this.

Now move to the Task - Usage view (use View - Task usage). You can also do this on the Resource Usage view.

There are two methods for selecting the Tab containing the cost rate you wish to apply to this assignment. Firstly, you can double-click the row in the table pertaining to the assignment. Therefore make sure your cursor is on a row containing the most indented level of the structure. You will then see a dialog box called 'Assignment Information' which contains the details of the assignment. Look for the field marked 'Cost rate table'. This will probably be filled with an 'A', the default tab we saw earlier. To use a different cost rate for this person, simply select another letter, from 'B' to 'E'. Be aware that if you select a letter relating to a tab with no costs on it, you will effectively be assigning a zero cost to this particular assignment.

Another way of selecting the cost tab you want is to add a column called 'Cost Rate Table' to the Task or Resource usage table. The various letters appearing in this column corresponding to the assignment rows can be modified.

Now let us return to the idea of time-varying cost rates.

Remember you need to go to the Resource Sheet. You can also use the area containing resources within the form in the lower half of your split screen.

On any screen other than one of the 'usage' views, double click the resource and choose the 'Cost' tab. Select one of the cost rate table tabs discussed above and move to the second row of the table. In the 'Effective Date' column, enter or select the date on which the cost rate for this tab is to change and enter the new Standard Rate on that row. You can several such rate changes for each tab. Try it. Test out the results by examining costs in different periods relating to the changes you introduced.

In a following article we will see how penalty costs can be incorporated to the project using this mechanism.