In the Middle east in all projects there is a requirement of getting a detailed cost loading exercise done by properly assigning he weighted distributed bill values to the individual CPM activities. The benefits that arise by doing this cost loading right and in details are:
1. Value of Work Done upto the reporting period is attained as soon as you get the progress update on the cpm per the agreed frequency of updates.
2. Cash Flow requirements needed for the forth comming months for the Client for necessary arrangements
3. What if analysis : As Contractor, if you want to target say 2 Million USD instead of 1.5 Million USD from the expected Spread Forecast, you can conduct a what if analysis by getting portion of work sections planned for forthcomming months for which you get the necessary additional resource requirements also from the loaded resource histogram spreads
4. As a Contractor it is important to compare - How much was supposed to be done (Planned Value) to How much has been done (Earned Value) to get the Schedule Variance and then further as contractor getting the job done in itself is not enough, to get it done at a profit (how much has been spent to get the earned value- Actual Cost) is more important, Cost Variance calculation followed by the Forecasts on Estimate to Complete, Estimate at Completion, and Expected Variance at Completion can all be possible only following a detailed comprehensive cost loading exercise. It helps to get the Cost Loading exercise to be done with due care and in good detail.
Further while making progress updates one aspect mostly overlooked is getting a redundancy check done on the relationships so that the forecasts depict the true works forthcomming in remaining time spread.
The Lookahead need be as true as possible for the forecast estimates on remaining work, resource and earning forecast to make real sense and the forecast spread analysis be done properly.
