Modeling Indirect Costs in ALICE

When evaluating different schedule scenarios to pick the optimal solution, cost is typically a major factor. With ALICE, users can model both direct costs (ex. crews, equipment, materials) and indirect or overhead costs. We define indirect costs as costs that are incurred based on the duration of the project, and not tied to any specific construction work.

With the Indirect Cost feature you can:

  • Factor in costs related to the duration of your project, such as trailer rentals, electricity, security, or back-office staff.
  • Make better cost-benefit decisions by understanding the true cost impact of a faster or slower schedule.
  • Compare different schedules based on the total costs, including direct and indirect costs.
  • See a breakdown of the costs to understand what drives the total cost of a project.

In this article we will describe how to input indirect costs into ALICE and compare different solutions on the explore page based on the total cost. 

Adding Indirect Costs to a Project in ALICE

  1. Open the Plan page
  2. Navigate to the Resources tab
  3. Go to the Indirect Costs section and input the cost in the format of a daily flat rate.
  4. Users may add multiple different indirect costs.

Indirect costs can also be modified or removed from the Resources tab.

How Indirect Costs are Calculated 

Individual indirect Cost

For each indirect cost, the flat daily rate is multiplied by the total calendar day duration of the project to calculate the individual indirect cost. For example, an indirect cost with a $1,000 daily rate on a project with a duration of 500 days will have a total indirect cost of $500,000.

Total indirect cost

The sum of all individual indirect costs.

Total cost

The sum of all direct costs + total indirect cost. If the idle cost calculation is enabled for crews or equipment, idle costs for those resources will be added into the sum as well.

Cost Calculations on the Explore Page

After indirect costs have been added, the total cost of every generated schedule will include the indirect and the direct costs. On the explore page, solutions will be plotted based on the total cost.

When clicking on a solution, there is a cost breakdown view where the total cost, direct, indirect and (if applicable) idle costs are displayed.

The cost breakdown is visible when the user clicks a solution on the Explore page.

Cost breakdown also appears on the Analytics view of the Analyze page.

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