[Safran Software Solutions] Practical Application of RP 57R-09

RP 57R-09 lays out the steps to perform an integrated cost and schedule risk analysis effectively. The requirement of the RP is that you start with a cost loaded schedule to conduct the analysis. Cost loading a schedule (ie one which includes time independent costs) is a time-consuming process for those who normally build a resource loaded schedule (one that is only loaded with time dependent costs). Adding time independent costs to a schedule usually requires additional activities and constraints be added to the schedule to place those costs, which compromises the schedule. Changes to either the schedule or cost estimate can require extensive rework and reconciliation of the cost loaded schedule.

A practical approach to resolve this issue and speed model development is to build a risk model that includes linked cost and schedule modules. The costs which are time-dependent (labor and rented equipment) can be linked to those activities which drive the costs while the time independent costs (materials and placed equipment) can be modeled without linkage to the schedule. This allows concurrent modeling of cost and schedule and the analysis of Joint Confidence Level (JCL) without the requirement to build the cost loaded schedule. It also speeds model development and analysis because the cost and schedule models can be completed and analyzed independently or jointly, the latter allowing the impact of schedule on cost to be calculated by exclusion.

This presentation will describe the challenges of developing the cost loaded schedule, the advantages of the combined model approach and the results obtained.