AAOM Handbook

ES.03 Estimate Resource Types and Cost

Context

The ExPenditure Schedule (EPS) is a costed version of the Operating Master Schedule (OMS). That is, the forecast cost for the labour, materials, equipment and utilities, etc. that will be required to implement the OMS is combined with a quantity estimate on each OMS Activity, and the frequency/timing of the Activities, to forecast the expenditure profile over time. The preferred source for the cost data is directly from the costing system(s) of record, however this may not always be possible, particularly where there are new or significantly modified Activities added to the OMS/EPS. In such cases it will be necessary to construct a resource and cost estimate from the best available sources. In most instances the Resource Types that are required for a new or modified Activity within an EPS are likely to be from the same set required for other Activities within that EPS. If the new or changed Activity results in significant new Resource Types, (that is, those that make up >90% of the total costs) then these would need to be specified and incorporated in the EPS. In the case of creating a new EPS the Resource Types will need to be defined from scratch. If it is a new EPS within a current operation then the existing Work Management and costing systems should be consulted in order to assist in defining the most appropriate set of Resource Types. In the case of a new operation then the Resource Types will need to be defined from a first principles analysis of the Activities in the EPS. While there are potentially a multitude of different types of resources used, these can be summarised into a much smaller number of EPS Resource Types to meet the above purposes. The following categories may be used as a guideline; • Equipment, • Labour, • Materials, • Spares, • Contract Services & • Utilities. These categories may be subdivided further, but only where doing so provides a material improvement to the forecasting of cost or demand for critical resources. For example, in a mechanised mining EPS the Equipment Resource Types may be subdivided into to be the different capacity drills, loaders, and trucks since equipment of different capacity is not usually interchangeable in a schedule. Note that since this equipment is scheduled with an operator the operator demand will be linked to the equipment demand and the operator costs can be included in the equipment costs. In a Heavy Mining Equipment maintenance EPS the Labour Resource Types are likely to be the specialised skills such as mechanic, auto electrician, boilermaker etc. In process plant operations the listed categories may suffice for the EPS. The final selection of Resource Types for an EPS must be consistent with the purpose of providing accurate, but not precise, forecasts for costs and Work Centre capacity demand.

© McAlear Management Consultants 2006

Operational Planning: Set Expenditure Schedule

Updated: August 2018

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