(Actual Spent) + (ETC Qty x ETC Rate) + ETC Overheads within Revised Cost Baseline...!!!
Yes.. any strategies to Control Cost should fall within the below Constraints...!!!
Actual Spent + (ETC Qty x ETC Rate) + ETC Overheads <= Revised Cost Baseline Actual Spent = From Summation of all cost heads in ur MIS
ETC Qty = Revised BOQ Qty - Actual Executed Qty
ETC Rate = Labour + Material + Plant Rate
(adjusted to actual Productivity Rates, Market Rates, Escalations and Wastages)
ETC Direct Cost = ETC Qty x ETC Rate
ETC Overheads = Staff + Temp Structure + Water/Power + Stationary + Insurance + Financing Costs + Sundries + Misc.
Revised Cost Baseline = Latest Approved Project Budget
Revised Project Estimate = Actual Spent + ETC Direct Cost + ETC Overheads
Any decision taken in the project should be towards minimizing all the above cost components contributing to Revised Project Estimates, such that the above referred constraints always holds good...
i.e Revised Project Estimate <= Revised Cost Baseline There is no Shortcut to Cost Control, BUT only Skill and Experience to see the Complete Picture referred above can result in successful Cost Control...!!!
By saying REVISED COST BASELINE, I am trying to stress on the FACT that no PROJECT is free from SCOPE CHANGES in due course.
Hence any Approved SCOPE Change should be simultaneously accompanied with REBASELINING OF COST which is nothing but REVISED COST BASELINE...!!!
Once there is an APPROVED SCOPE CHANGE, the ORIGINAL COST BASELINE is IMMATERIAL and OUTDATED.
If there is no approved scope change then
REVISED COST BASELINE = ORIGINAL COST BASELINE...!!
Hence any Approved SCOPE Change should be simultaneously accompanied with REBASELINING OF COST which is nothing but REVISED COST BASELINE...!!!
Once there is an APPROVED SCOPE CHANGE, the ORIGINAL COST BASELINE is IMMATERIAL and OUTDATED.
If there is no approved scope change then
REVISED COST BASELINE = ORIGINAL COST BASELINE...!!
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