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This worked example illustrates how cost and duration models for a project can be combined together.



The problem

A new building is to be constructed by a consortium for a client. The project can be divided into seven sections, as described below. The client wishes to see a risk analysis of the schedule and cost risks and how these relate to each other.



The detailed design will take (12,16,25) weeks but the architect thinks there is about a 20% chance that the client will require some rework on the design that will mean an additional (3,4,6) weeks.

The architect team will charge a £160 000 flat fee but will require £12 000 per week for any rework.



The site will have to be leveled. These earthworks can begin immediately on award of the contract. The earthworks will take (3,4,7) weeks at a cost of (4 200,4 500,4 700) a week. There is a risk that the earthworks will reveal artefacts that will require archaeological survey to be carried out before any building work can proceed. Local knowledge suggests that there is about a 30% chance of finding any significant artefacts and that the surveying would then take (8,10,14) weeks.



The foundations can be started when the earthworks are complete, and will take (6,7,8) weeks. The costs will be (£2 800,£3 000,£3 300) per week for labor plus (£37 000,£38 500,£40 000) for materials.



The building's structural components (floors, pillars, roofing, etc.) can be started (6,7,8) weeks after the foundations work is completed, depending on the weather. There are three floors, all exactly the same, and the building contractor believes each floor can be constructed in (4,4.5,6) weeks depending mostly on the weather. Each floor will cost (£4 700,£5 200,£5 500) per week for labor and (£17 200,£17 500,£18 000) for materials depending on the exact final design. The roofing will take (7,8,10) weeks for a fixed price of £172,000.



The envelope (walls, windows, external doors) work can be started 3 weeks after the first floor is completed. The materials will cost (36 000,37 000,40 000) per floor depending on the final architect design. The ground floor will require high security doors at a cost of £9 800. The envelope work labor will be provided by Brown Bros. Ltd. at a quoted price of £197 000 who estimate that each floor will take (7,8,9) weeks to complete, depending on the weather. However, Brown Bros. Ltd. are being taken over by another firm and the Managing Director thinks there is about a 10% chance that, under the new owners, they will not be allowed to accept the work. The next alternative is Redd and Greene Ltd. who have quoted £209 000 for the labor. They estimate it would take them (6,8,11) weeks to complete each floor, again depending on the weather.


Services and Finishing

The services (plumbing, electricity, computer cabling, etc.) and finishings (internal partitioning, decorations, etc.) can be started when each floor is completed. The architect has quoted (£82 000,£86 000, £91 000) for the services per floor and (£92 000,£95 000,£107 000) for the finishings per floor.

Services will take an estimated (8,10,13) weeks and Finishing will take (9,11,13) weeks for each floor but the finishings team needs an extra 2 weeks to complete after the services work has finished.



Two weeks are needed after all work has been completed to tidy up the site and test all of the facilities, at a cost of £4 000. It is thought that there is a 40% chance that the services contractor will be called back to fix problems resulting in a delay of (0.5,2,5) weeks and a 5% chance they could be called back again resulting in a further delay of (0.5,1,1.5) weeks.

The dynamic model can be loaded here Cost and schedule.

The links to the Cost and schedule software specific models are provided here:





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