CIMT 310 PLANT LAYOUT and MATERIAL HANDLING s1

IET 51500 FACILITIES PLANNING and MANAGEMENT PROBLEM SET #1 – FALL 2015 STRATEGIC PLANNING – MANPOWER ANALYSIS

DUE DATE: Tuesday September 8th

ABSTRACT: Strategic planning for a facilities management department is often a complex activity and involves several aspects of analysis. One area required is determining and budgeting for manpower. This problem set investigates the effects of changes related to manpower resources. The sensitivity of the project plan for manpower will also be studied.

DATA SET

The data set is shown on an Excel® spreadsheet which details the estimated time required for a facilities project categorized by manpower type in a professional organization such as engineering or architectural firm.  Compensation rates including fringe benefits and other indirect costs are listed at the top of the spreadsheet at the ‘Billing Rate’.  Time for each category of employee is itemized by tasks or activities identified in the overall project plan.  The estimated cost for the project is totaled at the bottom of the spreadsheet.  The contract with the client has been established and listed as the ‘Contract Total Project Budget’ and the potential profit or loss to the professional firm has been determined at the top of the spreadsheet.

ASSIGNMENT

Determine the effect to profit and loss for each of the following scenarios. Treat each scenario has independent and discrete (i.e. changes in scenario 1 do not apply in scenario 2). 1. An increase in the firm’s health insurance due to new requirements associated with the Affordable Healthcare Act has resulted in a 20% increase in the billing rate for all six categories of manpower. 2. The firm’s principle, in a cost cutting move, has decided to eliminate the Junior Planner position. Work formerly assigned to the Junior Planners will be evenly split between the Senior Planner and Draftsperson manpower categories. Since the Draftsperson category will assume more responsibility, their billing rate will increase to $75.

DISCUSSION QUESTIONS

Discuss the sensitivity of the budget to a change in an underlying assumption. Discuss both: 1. Unplanned events (scenario 1) 2. Planned changes (scenario 2).