How to Calculate Asking Rate?

What is Asking Rate?

Hi, Ashik.

I assume that what you mean by Asking Rate is the equivalent of what it means in cricket: how productive do you have to be to meet the goal?

The formula that might help you is an earned value formula: To Complete Performance Index, or TCPI:

TCPI  = (BAC – EV) / (BAC – AC)

{[budget at completion minus earned value] divided by [budget at completion minus actual cost to date] or, in US DOD terms, [BAC – BCWP] / [BAC – ACWP]}.

If budget = $1,500K, earned value = $875K and actual cost = $1,200K (so that CPI = .73), what must our CPI be the rest of the way to finish on budget at $1,500K?

TPCI  = ($1,500 - $875) / ($1,500 - $1,200)

        = ($625 / $300)

        = 2.08 

Think that if we've been working at .73 CPI so far, we can meet budget by working at 2.08 the rest of the way?

Fraternally in project management,

Steve the Bajan

Hi Stephen

I always have doubts about using cost to evaluate progress - you may have heard of my "Gold taps theorem".

A better basis is resource hours extracted from the budget.

its good to see the Aussies getting some lessons in how to play properly.

Best regards

Mike Testro

Mike, once again we are in violent agreement:

Actual resource hours vs. planned resource hours ("CPI-labour") eliminates several of the distortions (purchased items, "free" overtime of exempt employees, delay of cost disbursement) that afflict total budget tracking.  In general, whatever resources are important and "limited" on a project (fuel, water, malaria pills, battery power, or whatever) should be progressed. And a CPI (or CPI-labour, or CPI-malaria pills) dip is often a leading indicator of schedule delay. We stay on schedule for a while by our fingernails, by exceeding budget, but ultimately even that won't suffice...

It's good to see Australia struggle at cricket.  (And better to see Windies finally on the rise! England were just too good for them this summer, but wait a couple of years...)

Fraternally in project management,

Steve the Bajan