Re: Best way to represent material and equipment purchases

Thanks Steve for the detailed reply.

I'm obviously not that well versed in MS Project, and after spending a few
days reviewing a couple of MSP books I have, I now realize these were pretty
basic questions. I understand better now how to handle them (and
differences between work and material resources, etc.). Fortunately in my
case the most of the materials and equipment will be going with the final
deliverable so I don't need to worry about depreciation. Something to
think about though.

Thanks again. -Pat


"Steve House [Project MVP]" <sjhouse.remove.this@xxxxxxxxxxxxxxxxxxx> wrote
in message news:u5NWX60MGHA.720@xxxxxxxxxxxxxxxxxxxxxxx
Resources are not tasks - task are activites performed that create
something. Resources are the assets required to do that thing. Items
that are purchased and physically incorporated into the project's
deliverables or items such as fuel that are used up in the creating of the
deliverables are material resources. MS Project doesn't attempt to track
when you purchase them - it looks at when you consume them and attributes
only the cost of the actual amount of the resource that is consumed to
that task where it is used up. The idea is that you might purchase 1 ton
of coal but if you only used half of it, you could send the remainder back
to the vendor and get a refund. Now that may not be really true, but the
budgeting process pretends that it is. And it's really not so
far-fetched - since you can use any remaining for other things, you have
actually only "spent" that portion of the actual purchase cost that is
used up - the rest is an asset sitting in storage, banked for future use
as desired. In a manner of speaking, the money it cost was simply money
moved from one bank account into another, not really spent at all since
you still possess its full value. The full purchase price of tools such
as the multimeter that you purchase for the work resources to use are not
part of the project budget either - they are capital assets acquired by
the firm and can be used for other projects besides the one going on when
they were purchased. As a result, their cost to your project is only that
portion of their depreciation that accrues as a direct result of project
work being done with them and you handle that in the budget just as if
they were people and it is an hourly "wage" paid to employ them.

So to use your example:
Resources
1: Digital multimeter - lifespan 3 years, cost $40. Depreciation $13.33
per year, estimated usage 100 hours per year, cost per hour $0.1333.
Entered as work resource "earning" $0.1333 per hour.
Copper Wire - 10lb@$60 = $6 per lb. Entered as material resource with
material label "pounds" and std rate of $6.
Bracket - $25. Entered as material resource, material label "each" and
std rate $25

Task Test Component X - duration 3 days (say)

Resources assigned and cost - Digital meter, 24 hours at $0.1333 per hour,
cost $3.20 - the meter costs more but unless you throw it away at the end
of the task or install it as a permanent part of Component X, only $3.20
of its actual cost is spent doing THIS specific task's work in this
specific project - Wire 10lb@$6 cost $60 - bracket 1 each @$25 - total
cost accruing to the project budget on the dates the work is done, $88.20.

If you need to track purchases made during the project, a better place to
do it is in Excel. Remember Project's costing features are a cost-of-work
estimating program, not an accounting program.

HTH

--
Steve House [MVP]
MS Project Trainer & Consultant
Visit http://www.mvps.org/project/faqs.htm for the FAQs



"Pat" <pkelecy at insightbb dot com> wrote in message
news:u9swuzLMGHA.2916@xxxxxxxxxxxxxxxxxxxxxxx
What is the best (or easiest) way to represent material and equipment
purchases in project plan (MS Project 2003), particularly if I later want
to generate a summary report listing all of these?

For example, say I have task, "Test component X" that requires that I
purchase (a) digital multimeter from vendor A for $40, (b) 10 lbs of
copper wire from vendor B for $60, (c) support bracket from vendor C for
$25. Right now I just list each material item as if it were a task and
enter its cost as Fixed Cost (I added a column to the task *** for
this). This works from the standpoint of capturing the purchase and its
cost, but if I want to generate a report listing only such material and
equipment purchases I can't (or don't know how) to do that.

Is there a better way? Should I create a resource called "Equipment
Purchase" and assign that to each material and equipment "task"? What if
I have labors hours as well as equipment purchases together? Since I
know this is a common issue, I imagine there are some better ways of
doing this.

Thanks for any help with this. I appreciate it.

Pat







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