The Primavera P6 Top-Down Estimation tool is an efficient way to cost load the entire schedule from a total estimated units and/or adjusted estimated units. Let’s take a look.
The P6 Professional Top-Down Estimation feature is a helpful tool in the hands of the project’s subject matter expert. They rely on experience from similar projects to arrive at an estimated labor units for the current effort. They may increase these assessment labor units by a percentage amount to account for inflation or other factors affecting the entire plan. The intent is to take the appraised cost of the whole venture and distribute this amount down to the individual deliverables and even down to specific tasks.
The feature works with weighting factors, Est Weight, which the specialist defines and assigns to deliverables and activities. The labor units and costs compute from these weightings and the total estimated units. In this way, they have a thoroughly cost loaded schedule from, again, the total cost amount and defined weightings.
This article demonstrates how to achieve a fully cost loaded schedule using a top-down and weighted cost estimating approach when provided a total project labor units estimate from historical data.
You can assign weightings to deliverables and tasks based on their knowledge of the durations or costs required to produce the deliverables. Longer duration tasks and higher cost efforts would have larger weightings. Another way to weight them is by the deliverable and/or task complexity (or risk).
The more complicated elements or higher risk deliverables would have larger weightings. The weightings rely heavily on the expertise of the engineer to apply a realistic weight to each.
One practical advantage of the P6 top-down estimation feature, is that it can be forwarded to responsible managers of respective work packages so they can resource plan accordingly. Also, if a bid requires a comprehensively cost loaded schedule this top-down valuation would satisfy that requirement. Further, the estimate would support budgeting to secure Fiscal Year government funding for departments and groups depending on their portion of the work.
In Figure 1 below, we have our demonstration schedule.
This is a Pier Pilings installation project for the construction of several lake docks. Each at one of five different locations on Granby Lake in Rocky Mountain Park. We want to perform a top-down evaluation of the whole schedule. To begin we view the Work Breakdown Structure (WBS), as displayed in Figure 2.
Using the Columns feature we choose ‘Est Weight’ in the General category.
The ‘Est Weight’ is initially allocated evenly among the deliverables, Figure 4.
We distribute the ‘Est Weight’ among deliverables according to the recommendations from the subject matter expert, Figure 5.
We distribute the ‘Est Weight’ such that they add up to ten for the entire schedule, again, Figure 5. Then we proceed and in the activity view and add the columns: “Est Weight’, ‘Budgeted Labor Units’, ‘Budgeted Labor Cost’, and ‘At Completion Labor Cost’.
Again, we rely on our expertise and experience to specify the task weightings, Figure 7.
We continue and add a Lumpsum resource with a 5×10 Calendar and Default Units/Time 10.00/d, Figure 9.
We make the additional settings: Max Units/Time 10.00h/d and Standard Rate $100.00/h, Figure 9.
Figure 10 displays the schedule with the Lumpsum resource assigned to all tasks.
Proceeding we choose Tools | Top Down Estimation, Figure 11.
In the ‘Top Down Estimation’ dialogue, we confirm the WBS is set to the project top level. In the Resource field we select the Lumpsum resource. In the Estimation Method Section, we toggle ‘Prior Experience’, and enter 2,000-h for the Estimated Units, Figure 12.
When we click Apply the 2,000-hours of Budgeted Labor Units distribute according to each assigned deliverable activity weighting. Figure 13 displays the deliverable weightings and the resulting labor units and labor costs.
Note how the 2,000-h are distributed according to the appropriate weightings. In Figure 14 we have the activity table and associated cost loadings.
Here we see both the deliverable and task distributed 2,000-h of Budgeted Labor Units. The weightings look good, so we return to the Top-Down Estimation dialogue box and choose Save As to save the assessment, Figure 15.
Then this estimate is included in the Estimation History, Figure 16.
Now our technical expert recommends adjusting the Estimated Units by 10% to account for both inflation and increased technical difficulty. We return to the Estimation enter to apply a 10% adjustment to our total budgeted units for the plan, Figure 17.
The total budgeted units becomes 2,200-h and distributes to the deliverables, accordingly, Figure 18.
The activity table then becomes like Figure 19.
Observe the deliverable and task weightings and each resulting Labor Units and Labor Costs, Figure 18 and 19. A good exercise is to compute the cost of a deliverable and task based upon the total project labor units and weighting of the respective deliverable or effort.
The Primavera P6 Top-down estimation feature provides an efficient way to cost load the entire schedule when only the total budgeted units of the project and relative deliverable/task weightings are known. Proper deliverable and task weightings require input from your expert and/or experience.
When you have a good handle on the current plan’s durations, costs, and risks in relation to the template historical project, the P6 Top-down estimation feature is a proficient and effective way to comprehensively cost load the schedule. And once the weightings are fully defined then the project manager can readily investigate the effect of applying cost adjustments, e.g., inflation, to the total labor units.