AAOM Handbook

quantities and costs to be identified for the OMS/EPS. In the case of high impact, low frequency events the information from the work management system should be extracted to provide a clear picture of the range of values that might be expected for any discrete event. This is necessary due to the low sample rate of these events within a forecasting period (typically monthly). Where an OMS/EPS Activity represents a group of many low impact high frequency events the information from the work management system can be extracted to provide the total count of events, and the total Resource Type, quantities and costs for the forecasting periods, since for large population samples values tend sharply towards the mean. Where discrete event records are not created for OMS/EPS Activities, and this would often be the case for 'continuous' activities such as crushing, grinding, etc., and the mining Production cycle where it is not managed through a work management system, the costing system records are likely to contain a cost collector (e.g. Cost Centre) for each such 'continuous' activity. Cost information within a cost collector is typically further divided into expense classifications (labour, materials, utilities, etc.) that should be able to provide Resource Types, consumption rates and cost records for the Activity over time. Whether conscious or not, classification of these activities as 'continuous' is recognition that they can be viewed as a very high repetition of a unit of work – e.g. loading, crushing or grinding a tonne of material. With inherently high sample sizes in any forecasting period, and provided that the distribution of key characteristics is random (i.e. there is no shift or drift in the control chart of such characteristics), then the average values that can be extracted from the costing system will be adequate for the EPS forecasts. Where an ERP system contains realistic forecasts of the Resource Types, consumption rates and costs for OMS/EPS Activities this data should be utilised in the EPS.

Purpose

To identify if there is validated costing information relevant to the EPS.

Quantity

One decision whether reliable costing data can be obtained from the work management/costing systems.

© McAlear Management Consultants 2006

Operational Planning: Set Expenditure Schedule

Updated: August 2018

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