When you estimate an individual cost for a project or program, you are often not sure of the exact amount. For example, a cost estimate of $1000 might be better represented as 'somewhere between $800 and $1200'.
When you deal with expenses such as labor hours, you may have to deal not only with uncertainty in the number of hours but also in the price you pay per hour. 200 hours at $82 per hour, for example, might in reality be something like '200 hours +/-10% at an hourly rate somewhere in the range $80 to $85'.
Mandrel provides the ability to attach variances, i.e. plus-or-minus extensions, to each cost element and each unit price. Every such quantity is stored in Mandrel as three separate quantities:
- mid-range value
- high-range increment
- low-range decrement
When you come to report on bottom-line costs, the results can be significantly different depending on whether you use mid-range, high-range or low-range values. You can show bottom-line mid-range costs, worst case costs and best case costs all in the same report.
Confidence Levels
When entering cost variances for a particular cost element, you can either insert the variance limits manually, or you can select a pre-defined confidence level, such as low or medium, which will cause pre-defined variance limits to be inserted automatically. Mandrel provides a default set of confidence levels plus facilities to define your own.
