Probability in Action

    My example is from a work experience I had estimating a maintenance action for cost and duration. This is done by taking the base line scope of the job or requirements and matching them with the required timeline to determine what inputs and outputs can be expected accomplishing the task. 

Lets call this job X. the first thing we do is to go into our database and pull history on job X and see if we have done this work before. Once we have the history it may look something like this.

        #1` Job X.      20 hours.       2 heads.         2 days 

        #2 Job X.       15 hours.       2 heads          2 days

        #3 Job X.       24 hours        1 head            2 days

Now there are many variable that play into accomplishing job X. some of these variables may include but are not limited to:

        Mechanic experience/proficiency level (1, 2, and 3) 

        Number of Mechanics (4)

        Job environment/location

        Concurrent work being done

        Availability of parts and tooling

Assessing the data, this job took 2 days no matter the duration or head count. So it is automatically safe to say it will take 2 days to complete no matter what. 

The really tricky part is assessing the cost of the job. To do this you must factor in the amount of hours it will take, the number of heads it will take and additional cost of materials if needed. 

There are also variables within these variables such a how much does each mechanic make per hour. 

Lest say the customer agrees with getting Job X done in 2 days. What are we going to charge them for this scope of work? 

On #1 1 mechanic makes $20 per hour and the 2nd makes $15 per hour for a total of $350

On #2  Both mechanics make $15 per hour for a total of $225

On #3 the mechanic makes $25 per hour for a total of $600

lets say #3 had other work being done concurrently so only 1 person was able to do the job and he was the most experienced mechanic on the job site. 

This time we have no concurrent work so the most viable and cost effective way is to perform the job as #1. and bid $350 for labor. 

Now lets say the customer wants to get the job done in 1 day. 

We are in new territory now. This is when the triple constraint comes into play. The triple constraint is time, cost, and quality. you can only ever have 2 of the three but never all at the same time. In this situation the customer must be willing to pay for increased cost to gain time. 

In this case we would have to double the head count to half the time since there are no other constraints in play. this works well and is the simplest way to go about it. However, there are variations in pay that must be counted for. 

In order to do this, we must use all available mechanics to accomplish the job. 

4 mechanics at 2x$15 per hour 1x$20 per hour and 1x$25 per hour. cutting the duration to 10 hours simultaneously. This brings the estimate to $750 not including materials. 

Include a list of any sources you found useful to better understand the concept.

Staff, R. (2020, April 28). How to Calculate Construction Labor Cost. Retrieved October 27, 2020, from https://www.rhumbix.com/how-to-calculate-construction-labor-cost/

Lorek, S., About the Author Sarah is the Lead Content Strategist for Trimble Buildings, Sarah is the Lead Content Strategist for Trimble Buildings, Twitter, F., Linkedin, F., Website, V., & Lorek, M. (2020, April 26). Ways to Understand Labor Costs In Your Estimates. Retrieved October 27, 2020, from https://constructible.trimble.com/construction-industry/ways-to-understand-labor-costs-in-your-estimate