Best way to represent material and equipment purchases

[Pat]

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 sheet 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

 

[Jan De Messemaeker]

Hi,

Make a custom filter based on fixed cost>0
Project, Filtered for..., more filters, new
Fixed Cost --- is greater than -- 0
HTH

 

[Pat]

Thanks for the suggestion. I'll look into it. -Pat

 

[Steve House [Project MVP]]

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

 

[Pat]

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