With ALICE, project teams can rapidly explore the impact of different scenarios on project duration and cost. In this article you will learn about the different types of cost that can be calculated in ALICE and how to use the cost calculation features to make data-driven decisions about your projects.
In this article you will learn about:
- Cost Calculations
- Direct Cost
- Indirect Cost (Overhead)
- Idle Cost
- Analyzing Cost Data
- Cost-over-time Curve on the Analyze Page
Cost Calculations
Every schedule in ALICE will show a total cost figure, which is the sum of three components: Direct Cost, Indirect (Overhead) Cost, and Idle Cost.
- Direct Costs reflect equipment, labor and materials directly utilized in the schedule [details]
- Indirect (Overhead) Costs are costs that are incurred based on the duration of the project, and not tied to any specific construction activity [details]
- Idle Cost is the cost of having a resource (crew or equipment) on-site waiting for work. Idle cost can be optionally omitted from the total cost calculation. [details]
Direct Cost
Direct Cost for Labor and Equipment
For Labor and Equipment, Direct Cost is calculated as:
- Direct Cost = Hourly Cost x Hours Used Productively
Where Hourly Cost is the cost per hour of the resource and Hours Used Productively are the hours spent doing work rather than waiting (time spent waiting is calculated as Idle cost).
Direct Cost For Material
For Consumable Material
Direct Cost is incurred at the start of every activity that requires this material.
No Cost is incurred at the start or end of any activity that supplies this material.
For Reusable Material
Direct Cost is incurred equal to the cost of a single resource multiplied by the number actually used by tasks that “require” the resource only.
Example:
- if on days 1,2,3,4,5,6 the utilization is 0,3,2,0,2,4, then the costs incurred will be 0,3,0,0,0,1 (assuming the unit cost is 1) on the respective days.
- That is because on day 2 you will buy 3 units that you can reuse on days 3,4,5 but on day 6 you need 4 units and you had already bought 3, so you need to buy one more.
- No Cost is incurred by tasks that supply that resource.
Indirect Cost (Overhead)
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 section, we will describe how to input indirect costs into ALICE and compare different solutions on the explore page based on the total cost, inclusive of indirect costs.
Indirect Cost Calculation Details
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.
Adding Indirect Costs to a Project in ALICE
- Open the Plan page
- Navigate to the Resources tab
- Go to the Indirect Costs section and input the cost in the format of a daily flat rate.
- Users may add multiple different indirect costs.
Indirect costs can also be modified or removed from the Resources tab.
For a more hands-on experience, navigate through the player for an interactive walk-through, or if you prefer a more detailed approach, scroll down for a step-by-step guide:
Add Indirect Cost:
- On the Plan page, go to Resources, located on the upper-right side of the page
- Under the Indirect Costs section, click + Add Cost
- Enter the following data:
- Name
- Daily Flat Rate / Cost
- Click Create Indirect Cost to complete the action and exit from Resources
- Click Re-Schedule to recalculate the schedule, and then Solutions to enter the Explore page
- On the Explore page, click + Create New Scenario, define the scenario name, and click Run Scenario
- Select the new dot to open the scenario summary
- Navigate to the Cost Breakdown section to review the Total Indirect Cost
NOTE: Total Indirect Cost is calculated by the Daily flat rate/cost multiplied by the project's Total Calendar Days
Viewing Indirect Cost on the Explore and Analyze 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.
When comparing two or more schedules, ALICE will show the difference between the indirect costs across the schedules.
Cost breakdown also appears on the Analytics view of the Analyze page.
Idle Cost
Idle cost is the cost of having a resource (crew or equipment) on-site waiting for work. Idle cost can be a useful way to measure the efficiency of a schedule. However, some users prefer to omit Idle cost from their cost calculations because it does not reflect an actual cost in the same way that Direct and Indirect costs do.
Idle cost calculations can be disabled for each crew or piece equipment from the resources tab by toggling the Idle cost slider.
It’s important to note that the resource is considered on site the moment it is first needed, and considered off site right after completing the last activity it is needed for.
The easiest way to visualize this is through the graphic below:
So the formula for idle cost becomes:
- Idle Cost = (Time on Site - Time Spent Working Productively) x Hourly Cost
Idle Cost for Crews vs Equipment
Since Crews only spend their working days on-site, but equipment stays there overnight, we need to make the differentiation when calculating Time on Site.
- For Crews, Time on Site only considers the working hours within a Crew’s calendar.
- For Equipment, Time on Site is 24 hours & 7 days a week cumulative.
Therefore it is very common to have a high idle cost for Equipment even when the schedule is efficient. This is because crews may only be working (and using the equipment) for 8 hours every 24.
Analyzing Cost Data
Costs can be viewed from the explore page by clicking on a schedule dot and selecting "Cost Breakdown". A summary of total costs and a more detailed breakdown of costs by category is automatically calculated. Hover over any of the"i" icons for more details about the calculation.
When comparing two schedules, ALICE will represent the cost differences between the two schedules, summed up and also broken out by cost categories:
Cost can also be viewed from the Analyze page within the analytics section.
Cost-over-time Curve on the Analyze Page
The Cost-over-time curve provides a cumulative tally of “as-planned” costs spent over time for any given schedule.
The curve includes multiple lines:
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Total (black)
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Labor (red)
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Idle Labor (purple)
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Equipment (green)
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Material (blue)
The tool-tip indicator breaks those costs down even further to:
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Labor |
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Equipment |
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Material |
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Cost-over-time CSV Export
While all costs are cumulative in the curve and tooltip, the CSV export provides a day by day utilization that is not cumulative.
The columns represent each day, and the rows represent each cost code/category/group.
The cost groups are as follows:
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For each Crew separately |
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For each Equipment (includes cranes) separately: |
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For Materials |
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Cost Totals section:
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Labor Cost totals by Subcontractor |
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| Labor Cost totals (all crews from all subs summed up) |
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| Equipment Cost totals |
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| Material Cost totals: |
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Project Total |
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