Management Training Construction Professionals For: Tutorial

Management Training
for
Construction Professionals
Tutorial
Construction Industry Simulations Ltd.
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Introduction
The tutorial describes in detail the various features of the MERIT simulation.
All the examples are fictional, and not related to any data used elsewhere.
You can navigate through the tutorial by using :-

buttons for movement through the presentation
buttons to load specific topics
Demo buttons for self-paced demonstrations of topic
Hotspot hotspots to display further information.
The mouse, and not the keyboard, should be used at all times.
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Main Menu
Choose from one of the following options
Forming a Company Strategy
Entering Decisions
Measuring Performance
Obtaining Information
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Forming a Company Strategy - 1 Company Strategy
Wellisnow
InItsetting
very look
the
easy at antake
to example
objectives athereof setting
are many
short-term and
view reviewing
questions
to running company
that
theneed
company strategy.
to bebyanswered, includingfor
making decisions :-
After a thorough review, the following key objectives are set for the next year :-
the current period only, without looking at the wider picture. Whilst this hit and miss
We
What
havelevel
approach may
been of growth
prove
given the would
successful,
task of werunning
like
it is to aachieve
unlikely to ?bethat
company as effective
has been as formulating
operating for aayear
long-term
(the
Howaim
To
History),arefor
strategy westeady,
for
and isgoing
the toprofitable
consideredimprove
company, to the
based
be value
inupon
growth, the
a sound of position
the
increasingcompany
companys ? from
byobjectives.
turnover
both 11m (last
the industry period
and of the
its board of
What year)
History
directors.
levelsto of44m
company
in theoverhead
next year are we likely
through to need prequalification
increasing to achieve our objectives ?
for new work, and
How are we
Decisions
competitive
made going to look
in the
tendering. afterperiod
current the interests
often have of an
theimpact
shareholders
in future ? periods, and in
How are we
different
The areasgoingof to
theimprove relationships
companys activities, with
and our clients
to make isthe ? most effective use of the
Tostatus of the company/market whenfrom we take
4.5mcontrol :-11%)
improve the value of the company to 5m (by through improved company

companys resources long-term planning is essential.
profits and making better use of the companys assets.
There
The are many is
company other
valued areas that also
at around need
4.5m, andtohas
be considered,
a share priceand of creating
0.9. a long-term
For
To example,
strategy
Sinceensure
the thatthecompany
is acompany
complex efforts
task. of
started the Marketing
Indeed,
overheads,
from strategy Department
will
especially
scratch, have
the Head
turnover was may
to be enable
periodically
Office,
only thereviewed,
QHSE
generated company
and
in toperiod
lastsince
theMeasurement theof
prequalify
objectives
departments,
the tofor
first year, date
are a staffed
and large
may job
this have in period
been
wassufficiently
valued at5.around
The
unattainable
to company
manage forwith
11m. anydecide
number
the to tender for the
of reasons,
increasing suchjob,
turnover. which is
as :-
costed
A smallingross
period 6, and
profit ofa0.8%
bid iswas
submitted
made oninthe period
work7.progressed.
If the bid Unfortunately
is successful, the jobwas
there will an
To
not improve
Thestart the
until companys share price.
operating
Companys
loss ofperiod
future
1%, due8.market
If it then
mainly to runs for
forecasts
overhead fivenot
were
costs periods,
asvery it shouldwas
the accurate,
company complete
and in period 12.
the anticipated
being established inIn
growth
other
areas
the
words,
have
Tofirst
build on
year amaterialised
notand decision
improve
without anyon where to
existing
revenue target
client
being marketing effort in period 5 has had an affect
relationships.
earned.
up until
Increased
The period
company 12, and
competition
order beyond
book has ifvery
forced
looks retentions
healthy,are
margins repaid
towith
be oncetothe
reduced
a forward job completes.
secure
workload work
of around 19m, and an
Jobs haveprofit
anticipated
been lostof 1m.to competitors with better client relations
A year later, how
The overall value of newdid we perform against the objectives that were set ?
In order to decide upon the work in the market
companys seemsand
objectives, stable
whatbetween 90m and 120m.
can be realistically achieved
A number of satisfactory relationships were established with clients.
over a period of time, there needs to be a detailed analysis of :-
The environment in which the company is operating
Based
Theonstrengths
the information information
and weaknesses of given above, and
the business as ita stands
detailed review of your company
reports
The and the
likely market, weinmust
competition decide upon the companys strategy for the next year.
the future
Keep Clicking Anywhere on the screen to advance the demo
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Objective
To aim for steady, profitable growth, increasing turnover from 11m (last period of the
History) to 44m in the next year through increasing prequalification for new work, and
competitive tendering.
By examining the Financial Report, we can see that

the turnover (measured value) in periods 5-8 was as
follows :-
Period Turnover (m)

5 10.5
6 10.2
7 12.5
8 14.4
47.6
We aimed for 44m, so we reached our target.
The level of turnover is related to :-

Bidding The current work in progress
Having prequalified for and costed jobs, to increase
Estimating turnover it isessential that some
The success of the of the jobs are successfully
prequalifcation and procurement
Prequalification
tendered for at the bidding stage. In periods 5-8, 100% (estimating and bidding) areas of the business,
the thewhich
By employing more marketing staff,and directing resources intoofthe
themarket
jobs prequalified
sectors thatforappeared
were costed,
to begiving
growing,
companys share companyonthe opportunity towell now
bid for asexamine in more as
many contracts detail.
possible.
As we can seeof thethe
from total market increased
Performance Statistics,average over periods
during periods 5-8,
5-8 the although
company there
bid for 5was a disappointing
of the 6 jobs that it result
was
in period 8.
able to, and won 4, which was the key factor in the large increase in company turnover during the second year.
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Objective
To improve the value of the company from 4.5m to 5m through improved company profits, and
making better use of the companys assets.
By the end period 8, and the start of period 9, the overall value of the company had increased from 4.5m (at the end
of period 4) to 6m, representing an annual increase inline with the original objective.
Operating Profit
An increase
Investments in company value is the
In achieved
Historythrough a number
the company of means
made :-
an operating loss (before tax & interest).
Good job
Investments inand
otheroverhead
concerns
Capital Employed management
had two to
positivegenerate
results a
:- operating profit (profitable growth), and increase cash-flow.
Utilising the companys capital
If the companys capital base
However, to
baseinsecure and
periods
(plant, progress
5-8 the loss
equipment, more work.
was turned
buildings etc) is into
beinga profit,
utilisedthrough
(capitalaemployed),
combination of good
An Making effective
excellent average use of the companys
return of progression,
through contract 4.4%
job and assets,
per overhead
period
then on such as identifying
management.
investments
there good
was made,
is more chance investment
of thewhich
company opportunities
was making profit.the yield a better
far morea than that
return than
equivalent thefrom
return bankthe
offers,
bankorofinvestments
around 1.3%that percan secure reduced job costs.
period.
The profit
In the History, only 25% of thewould have
capital base fed directly
was intobut
utilised, thethis
cash account, improving
substantially increasedthe to companys
83% value.
Well now
Overall buildexamine
costs these
were areas
reduced to
by see
0.23%which
by ones contributed
investing
during periods 5-8 as more work was secured. in to
appropriatethe increase
companies in company
e.g., value
investments ininthe last year.
Robinson Pipelines Plc reduced material costs on Water & Sewage contracts.
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Objective
To ensure that company overheads, especially the Head Office, QHSE and Measurement
departments, are staffed sufficiently to manage with the increasing turnover.
Clearly the Head Office Department was adequately staffed, at 100% of the required
level to manage the companys turnover.
Similarly, the QHSE and Measurement Departments, whose staffing is dependent upon
the companys turnover, were equally adequately staffed.
We have succeeded in our objective of maintaining sufficient staffing levels in the

Head Office, QHSE and Measurement Departments.
Looking at the Head Office Department as an example. The benchmark (last period of the History, period
4) staffing was 3 staff could cope with around 11m of turnover per period, or 3.7m per person.
Turnover per period fluctuated a lot during periods 5-8, and the staffing levels were adjusted accordingly.
It would appear at first glance that Head Office staffing levels were sufficient, but this can be verified by
referring to the Performance Statistics.
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Objective
To improve the companys share price.
Gearing
Future
Company Ratio
Profitability
Dividend
Value
There arePayments
2 sources of interactive
The
The gearing ratio of athe company is
Althoughcompanys
there
Ininformation Future
was
the Historythat profitability
slight
(periods fall
enable 1 into 4) a(forward
a measure
period
a detailed 6, in of
dividend of
its debt1.5%
margin)
general liability,
wasand
fluctuated
there is 0 unless
asignificantly the cash
in period
periods account
5-8,
breakdownwas wasofsteady
the
paid increase
factors
each in(6%
affecting theper
is overdrawn.
having both a price
positive andundertaken
negative affect
company annum),
sharevalue in periods
which to kept
be the :-had on
5-8,shareholders
which a
industry confidence
positivecontent.
affect and the
on industry companys
confidence in share
the
During the History the cash account was toinalways
price,
company, as canand
The be seen
this
Financial would by the
havecomments
Details, helped
accessed from in
the
increase
credit,
External and
the company the gearing
Performance
share ratio was
Review. 0dividend
throughout.
Intheperiods 5-8price.
Financial the
Decisions
level ofScreen. was
Since there was never any change
maintained, which continued to keep the in the ratio,
there was Theno impact onPerformance
the company share price.
shareholders
External content. Review,
compiled each period by a consultant
However, in periods 6 to 8the thedividend
cash account
However,
hired by the
although
company. was went
into overdraft,
sufficientfinancing
to keep the other activities (capital
shareholders content,
base expansion and investments), and the
it would not have had any noticeable affect
gearingon ratio
the increased. During these
Summary share price, so what did periods
?
The companys share price did rise during periods industry
5-8, in line confidence
with company (asstrategy,
a result butof gearing)
there were
The company share price at the end of period 4 was 1. declined, and this would have had a negative
factors that both contributed to and hindered this rise.
affect on the share price.
By the end of period 8, the share price had risen to 1.71, meeting the original objective.
Dividend had no affect, since the level paid was just enough to keep the shareholders happy.
Changes
Well now look ininmore
Company Value,
depth at on areas
the key the whole, had a positive
that influenced affect,price
the share and was:- the main reason for the
overall rise in share price.
Changes
Dividend in Forward
payments Profitability had mixed affects.
to shareholders
Changes in Gearing
Changes in company value had a negative affect.
Changes in company future profitability
Although
Changes there were
in company mixed
debt burdenaffects, the positive
(gearing ratio) affects had a slightly greater impact than the negative
affects, and this accounted for the rise in the share price.
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Objective
To build on and improve existing client relationships.
At the end of period 4, when we took control

of the company the following relationships
were already in place.
Relationships have improved in two ways :-
Looking in particular at the relationship with Dales Water Services Ltd, Where theretowas
its not hard seeno relationship,
why a such as
Overall, the companys
fairly good relationship has been formed :-client satisfaction rating has risen steadily each period,
with Kegworth Airport, with whom there is
further proof that the companys objectives have been now met with regardrelationship..
a satisfactory to client
relationships.
1 job was procured with a competitive bid, and was then managed very well, resulting in it being
completed on time. Where a relationship existed already, such
Well now look at how we have managed to improve the relationships
as such ? a satisfactory relationship
as turning
with the Dales Water Services Ltd into a
good one.
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Overall, in reviewing our performance against the original strategy, we have done well, and
in many areas have achieved the objectives for the year.
We nearly reached our turnover target, improved our company value as required, our
overhead departments were adequately staffed, and share price and client relationships
improved.
In summary it is possible to manage a company without any clear strategy in place.

However, this would require a very reactive approach to running the business, which could
create untold problems as unforeseen and unconsidered circumstances cause havoc across
the organisation.
A clear, well-considered strategy will not guarantee success, but it does give the company
the best opportunity to grow profitably within the confines of the market in which it is
operating.
However, a strategy is not set in stone, and needs to be regularly reviewed and updated to
take advantage of a continuously changing environment.
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Decision Entry Entering Decisions
The decisions to be entered each period are split by business function.

Choose from the list below for a detailed description of each function.
Financial
Overheads
Estimating
Bidding
Personnel
Construction
The order in which decisions are processed Main Quit

The order in which decisions are processed Entering Decisions
The decisions are processed in the order in which they appear on screen :-
Current Period
Financial Management of company assets and looking after shareholder interests.
Overheads Departmental staffing levels adjusted, and prequalification for new jobs
that have become available.
Estimating Jobs for which estimating time has been allocated are costed.
Bidding Bids are submitted, and contracts awarded.
Personnel Project managers allocated to on-going jobs.
Construction On-going jobs progressed in line with labour and site cost decisions.
Keep Clicking Anywhere

The Demo
on is
the
now
screen
complete
to advance the demo
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Financial Decisions Entering Decisions
The role of the Financial Manager is to :-

Look after the shareholders interests
Make the best use of the Companys assets to try and increase the Companys value
Entering Decisions Factors affecting share price Overdraft Limit Main Quit
Entering Financial Decisions - 1 Entering Decisions
Itsthe
One of period 5, and the Financial
key responsibilities Manager
of the needs
Financial to make
Manager review
is to the financial
look after the interests of
the companys
structureshareholders.
of the company, and decide upon any changes that need to be made.
The Company was originally funded from a share (equity) issue of 5,000,000 shares of value 1, with an equity value of
Dividend
5,000,000.
Dividends are taxable payments declared by a company's board of directors and given to its shareholders, normally
quarterly.
After theThey provide
History an incentive
the share to ownatstock
price stands 1.03,inand
stable companies
the equity valueeven if they are
at 5,150,000 not experiencing
(5,000,000 x 1.03).much growth.
The dividend
The paid is
share price to influenced
shareholders
byisaone of the
number ofkey factors
factors :- that affects the company share price :-
Insufficient dividend
Paying dividend, willisdisappoint
which under thethe shareholders
control and reduce
of the Financial the share price.
Manager
Sufficient
Changesdividend will of
in the value keep
the the shareholders content, with no change in the share price.
Company
The
Ample dividend
dividend payment
will make comes
the out of the cash
shareholders
The future profitability of the Company account,
very happy, and increase the share price.
and the value of the company
The debt burden of the Company is temporarily reduced.
The affect on share price is determined by the % of the companys equity that is paid as a dividend.
Sinceofperiod
Clues as to the affects of different levels 1 the
dividend arecompany
availablehas paid dividend
by examining of happened
what 1.5% of equity
in theevery period,
History, and
using thethis has
Financial Details and Consultants kept the shareholders content, as we can see from the Consultants Report.
Report.
In period 5 well continue to pay dividend at this level.

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Key Point Keep Clicking Anywhere on the screen to advance the demo
As the share price changes, so does the equity value of the company, and paying the same level of dividend in
consecutive periods will have a different affect on share price as the % of equity changes. Main Quit
The
Capital
An other
Base
Theincrease
Investments
value of inmain
thecompany responsibility
Company value
at anycantime of
beisachieved the through
measured Financial :-
by its assets. Manager
After paying isdividend
to make theythe
consistbest
of :- use of the
Companys
Some
The coreadditional
assets
business points
toCompany
to note
of the try:-
and increase
is procuring andthe Companys
progressing value.
contracts, and if done successfully the Company will report
Operating
Cash
a healthy
in the Profit
operating
bank (622,185)
profit, and increase the Companys value.
Generating
Any changes
This can either antooperating
theincapital
be credit, base
profit
or in alsoincreases
which affectwhen
overdraft, thethe
cash cash
it is account.
account.aThis
considered can There
liability. be achieved through good
is an overdraft limit job and overhead
defined in the
management,
However,
Companythere andwhich is responsibility
are alternative
Financial ways of
Information. of increasing
other people, the and
valuetheofFinancial
the Company,Manager suchhasas no direct impact
by investing upon
in other this.
concerns, which
may
If theorcapital base is being underutilised,
may not be construction-related. it may be appropriate to reduce it to raise cash for other uses, such as
further
Making
Capital investments
effective
Base or reducing
use
(3,900,934) an overdraft.
of the companys assets
Thiscan
We is the
seeresponsibility
that the company
companys of the currently
investment Financial
in plant, Manager,
has andfacilities,
an investments
equipment, a number of choices
of 52,750 andetc,
buildings are
103,800 available
which in AGT:-Design
determines theServices Ltd and
level of work that the
Robinson
There are
company can limitations
Pipelines
undertake. on the changes
Plc respectively. to the capital base each period, defined in the Company and Financial
Information.
Using cash to increase the Capital Base and support further growth.
There
Sellingareoff2 aways
Investments % of of
theincreasing
(156,550) Capital Base to raise cash,
the companys which
value may investments,
through be desirable ifand thewell
cashexamine
accounteach
is in overdraft, or if the
one in turn.
Capital
The companys
The capital
Basebase depreciates
is not
cash being byina other
% each
fully utilised.
investment year, aswhich
concerns, shownmay in the
notCompany and Financial Information.
be construction-related.
Using cash to invest further in other companies who offer a better return than can be obtained from the bank, or who
may be able to reduce costs on jobs in progress.
The company is currently valued at 4,679,669.
Well now look at these options in more detail.
Capital Base
The level of future turnover/workload that can be undertaken is limited by the size of the companys capital base, as shown
on the Workload Limits screen (accessed from the Bidding Screen).
The capital base of 3.9m can support between 35m and 43m of workload. Since the current forward workload is only 18m,
there is still plenty of scope for winning more work. However, once the companys bidding decisions have been made,
there may need to be a reassessment of the size of the capital base to decide if an increase is required.
At this point in time, since bidding decisions have not been made, and since there is plenty of unused capital base, well
leave it unchanged.
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Some additional points to note about investments :-

Investment Returns
Using
Any increases of reductions
cash to invest further ininother
investments
companiesaffect
canthe cash
yield We
account.
a better nowthan
return have anbe
can investment
obtained of 102,750
from in
the bank.
AGT Design Services Ltd.
Use
Theretheare limitations
Change buttonon the :-
to determine look in more detail at the current investment.
Increase in a single investment that can be made each period, depending If AGTon Design Services
the size Ltd had been performing badly,
of the concern
The additional
The numberinvestment comes out
of investments thatofcan
the be
cash account,
held time moneywe
but since
at any one iscould
beinghave reduced the investment.
moved between
The limitations assets,
are shownthe value
in the of the company
Company is unchanged.
and Financial Information.
In addition to the current investments, there are also a
However,
There isaffects of the changes
no limitation on the companys
on the reduction that can bevalue
madewill felt duringselection
be investment.
to an the periodof other companies that can be invested in,
when cash account interest is calculated, and investment returns are known. and these can be analysed using the Add button.
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Key Point
Any investment returns change the value of the investments, and not the cash account.
For each available concern, the following information is given :-
Bearing in mind that the bank offers a credit rate return The
of investment
0.375% per periodprofile(1.5% per annum),
describes AGT Design Services Ltd
the concern.
have offered a far better return in the last 2 periods of The
overPast
5% per period.
Performance gives the % return given in previous periods to all
investors, and details any monies we may have invested.
Since we have plenty of spare cash, and bearing in mind the excellent opportunity the investment offers, well increase
our investment by the maximum allowed this period Taking (50,000).into account the potential returns from the concerns, and the bank
rates on offer each period for the cash account, we must make a decision
---------------------------------------------------------------------------------------------------------------------------------------------------------------------
about whether or not its worth investing any cash in any of the available
Key Point opportunities.
Each investment has a number of key properties :-
The size (small, medium or large) determines the amount that canand
The Company be invested
Financial each period, asshows
Information defined in at
that thepresent
Company the bank
and Financial Information. offers a credit rate return of 0.375% per period (1.5% per annum). Well be
The form is the type of investment, either a loan orlooking shares.toLoans
better(debentures)
this from anyoffer a higherHowever,
investment. return than shares,
there are nowith the
returns on shares being linked to dividend payments.opportunities that seem to do so, and most have performed quite poorly
over previous periods, so well not add to our investment portfolio at the
moment.
Main Quit
Build Cost
Finding anSavings Due To
investment Investmentsthat offers a good return, and build cost savings due to the
opportunity
As well as investing in other companies to yield a better return than can be obtained from the bank, there is potentially an
companys sector-based workload, is not always possible, and often a compromise has to be reached
even more build
The actual lucrative
cost reason
savings for investment
gained throughopportunity.
investments can be gauged in a number of ways :-
as to which benefit is more desirable.
If When
enoughusing
moneytheisChange
investedbutton
in particular
to alterconcerns, build
a particular costs may
investment the be reduced
past on work
performance in progress
shows the in specific sectors due
For
to example,
preferential
savings an investment
rates
by sector. opportunity
on materials, plant may arise
etc e.g., investing in anthat offers
asphalt substantial
company build
would reduce cost
build costssavings
for any in the
Transport
Transport
work being sector,
undertaken.
The Investment in which
The
History Report the
concerns company
offering
gives a detailedare
these very of
benefits
account active.
are However,
suppliers
all savings of some the investment returns may not be
commodity
by all investments. to the construction industry,
and only where the investment is a loan.
very good, but the cost-saving benefit outweighs the risk of the investment itself not performing
very well.
Well use the Add button to look at some available investments.
All the decisions made by the Financial Manager have an affect on the cash account, and it
may go into overdraft, or it may already be in overdraft from the last period.
The
ThisCompany and concern
is not a great Financial Information
if the shows
money from that for
the cash a smallis company
account we wouldinneed
used productively otherto invest at least
100,000 to obtain
areas, but there ispreferential
an overdraftrates, andaswe
limit, could expect
defined build costand
in the Company savings of atInformation.
Financial least 0.3%.
Bear
When in the
mindoverdraft
that although
limit isaexceeded,
minimum of all100,000 is required,
efforts must any to
be made single
reduceinvestment in a period
the overdraft cannot exceed
to below
50,000,
thelookingso it would
limit, which take at least 2 periods to gain any build cost savings from the investment.
By at themay involve
various :-
opportunities Mockridge & Sons Joinery Ltd immediately stand out. They
supply joinery products to clients in the Building & Commercial Sector, and if we were undertaking work in
------------------------------------------------------------------------------------------------------------------------------------------------------
Not paying anyinvested
dividendininthem,
the current period
that sector, and we could obtain preferential rates on joinery supplies and reduce our
Key
Pointoff part of the Capital Base
Selling
build costs.
The larger the
Reducing investment concern the greater the build cost savings on offer, but the more that has to be invested
investments
to secure the savings. Also, theLtd%arebuild cost savings rises as more is would
invested, up to toa point.
Mockridge & Sons Joinery a small company so how much we need invest to obtain the
preferential rates ?
The Demo is now complete

Main Quit
Overhead Decisions Entering Decisions
Overheads are the non-contract based support services required to enable the company to
win and progress work.
They consist of 5 key departments (Marketing, Estimating, Head Office, QHSE and
Measurement) and other non-departmental overheads (such as idle labour and idle project
managers).
Entering Decisions Market Sectors The Job Period Main Quit

Entering Overhead Decisions Entering Decisions
The Overhead Manager is responsible for decisions related to the departments, namely :-
Setting the staffing levels of the Departments
Directing marketing effort into the 5 market sectors
The non-departmental overheads are the responsibility of other managers.
Choose from the list below for detailed demonstrations.
Marketing Department
Estimating Department
Head Office, QHSE and Measurement Departments
Non-Departmental Overheads
Main Quit
Entering Overhead Marketing Decisions - 1 Entering Decisions
Consider
The
The Past
There the following
Marketing
are Performance
currently buttonsituation.
2 Department
marketing shows are
the
staff, and %the
the of thefirst
split the step
ofoverall marketon the
that the ladder to winning
company has prequalifiedand
for inprogressing
past periods.
contracts.
marketing effort between the 5 market sectors is presently as
Its
Based
shown,the
uponbeginning
with the majority
the of
last year,
ofandperiodbeing5,
assuming
effort and
the the
marketing
directed Overhead
into the Manager
effort was directed needs
into sectors to decide
in which there was upon
somethe new staffing
work,
company was only able to prequalify for a maximum of about 20% of the overall market with 2 marketing staff.
level
The for the Marketing
marketing
Building & Commercial staff
sector.seek Department,
out and enables and into thewhich
companysectors the staffs
to prequalify for efforts are to bethat
new contracts
directed.
become
The companysavailable, which
strategy is thegrowth,
for steady company
and to may
achievethen decide
this more work to
will try
need and
to be win through
prequalified for, sothewell increase the
procurement
staffing level by theprocess.
maximum allowed, 2 (the limit is shown in the Company and Financial Information).
The value and number of jobs that the company can prequalify for in any period is governed
by a number of factors :-
The value and number of jobs available (size of the market)

The number of staff in the Marketing Department
Where the marketing effort is directed (5 potential sectors of work)
Whether or not the company are experts in a particular sector
The relationship with clients who announce the new contracts

Main Quit
The additional marketing

Market Analysis staff displays
button will have little
the affect if forecast
companys they do not direct
of the theirtrend
market efforts
forDeciding
the next into
year.which
The accuracy
sectors toofdirect
the forecast
the
depends
into the market
upon the
sectors
size of
in which
the marketing
there is department.
new work. companys marketing effort is primarily
governed by where the work is likely to be,
Although
To determine
decisions
wherehave
the new
to bework
madeis, about
well use
intothe
which
Market
sectors
Analysis
to direct
button.
the marketing but effort
there
in period
are other
5, the
considerations.
% change in each
sector is limited to + or - 10, as defined in the Company and Financial Information, since wholesale changes cannot be made
in one period. For example, the company may be basing
their marketing strategy on working closely
The change limitation makes it imperative that as well as the short-term, the long-term is considered when reviewing marketing
with particular clients. In this scenario they
strategy.
will need to know how future work is likely to
Based on the information about the likely market split in period 5, and also looking to be thesplit by client.
long-term, the overhead manager
decides to concentrate on the Water & Sewage, Transport and Building & Commercial sectors. The Transport sector in particular
appears to be improving from period 7 onwards. The Marketing Analysis display enables
the forecast future workload to be split by :-
Value of work (the default)

Type of work (build only, design & build)
Number of jobs
Clients
all of which could have a bearing on where

to direct the marketing effort.
The overall value of the market appears to be steady at around 100m in the next year
or so, except for the significant increase in period 6. Providing the marketing effort is
directed sensibly, the additional marketing staff being employed should ensure the
company prequalifies for a bigger share of the overall market value in the near future.
Main Quit
Client Relationships
Experts
Having set
in the staffingand
a Sector level,Prequalification
and directed the marketing effort into different job sectors, the company will be able to
prequalify
If
Client
the companys
Relationships
for a number
average
playofamarketing
jobs
role that
in prequalifying
come
effort onto
in a sector
the
for market
work
exceeds
in in
two
the
aways
particular
period.
:- %, then the company are deemed to be
experts in the sector, and will prequalify for more work in the sector than anticipated.
Ifaddition,
In the relationship
the value
is an
of work
improving
prequalified
one, and foratcan
leastbeatinfluenced
a certain level,
by other
the company
factors :- may prequalify for a job that would have
beenMarketing
The unattainable, as shown
Analysis in the
Report External
places a * Performance
against the sectorsReview.
in which the company is an expert.
If the company are experts in a particular sector(s)
If
The
therelationship
relationshipwith
is aclients
deteriorating
who announce
one, thenthethere
new contracts
is a chance the client will not allow prequalification, regardless of the
effort being put into the particular job sector.
Well now look at each one in turn.

Main Quit
Entering Overhead Estimating Decisions Entering Decisions
There
Consider
The
19any
If man arethe
Estimating
weeks
changes currently
of
hadfollowing
staff
estimating
been 3time
made estimating
situation.
price
tohas the of
the been
level staff,
jobs
allocatedthat each
acrossthe working
company
3 jobs, and since12have
weeks
the per time
prequalified
estimating period, representing
for,
available with
is 24 man costing
weeks 36
estimating
decisions
estimating
(all the companys man
being
staff, theownweeks
made
changes available.
on
staff) there
would the
is noEstimating
have problem
been Screen.
fulfilling the estimating requirements with the current level of staff, and no
Its the beginning
immediately
additional staff
transferred
need toto of
be period
the
employed.
Estimating5, andScreen.the Overhead Manager needs to decide upon the staffing
level
To
The seefor if the
Overhead 36 manEstimating
weeks is
Manager Department.
issufficient
concernedto notfulfil
withthe whichestimating
jobs to requirements,
price, but withwell the need
number to look
of
------------------------------------------------------------------------------------------------------------------------------------------------------------------------
at the estimating
estimating
Key Point
decisions
staff needed tothat
fulfilhave the been
estimatingmade. requirements.
If theman-weeks
If more companyhad dobeen
not allocated
have enough man
than were weeksunless
available, available
somethingto was
fulfil their
done, someestimating
estimates would not be
requirements (Estimating Screen), the number of estimating staff needs to be increased by
completed. In this scenario jobs would be costed in job number order until the estimating resource ran out, after which point
some jobs would not be costed accurately.
either employing more company staff, or using agency staff.
To overcome any shortfall, there are 2 choices :-
Employ more companys staff, bearing in mind that there is a limit on the number of new company staff that can be employed
each period, as defined in the Company and Financial Information. New company staff also incur a recruitment & training
cost in their first period.
Employ agency staff for the current period only. Agency staff attract a higher salary than company staff.
Its normally more cost-effective to increase the companys own staff rather than use agency staff.
Keep Clicking Anywhere on is

The Demo the screen
now to advance the demo
complete
Main Quit
Entering Overhead Other Dept Decisions - 1 Entering Decisions
Consider
The
We
Period
The staff
now4, know
the
principal in
the
for these
following
that
lastthe
setting departments
period
the situation.
3 staff
staffing of the
level can
perform
History,
applies handle tasks
set
8.4mthe
related
ofbenchmark
to all 3 departments, turnover.
so wellto the staffing/turnover
companys
concentrate ongoing
on the Head levels
jobs :-i.e.,
Office Department.
theperiod
number of staff 3instaff,
each department could support the level of turnover without
Its
ToHead
This see
the ifOffice
beginning
wethis staffing
staff
currently of
haveperiod
deallevel with
5,iscompany
all and
sufficient
buying,
the Overhead
accounting
staff we
and noneed Manager
agencyand
to determine
IT issues.
staff. needsthe to decide
likely turnover
upon thethis staffing
impairing performance.
levels
period.
How dofor the Head
we know if 3 staffOffice,
will be ableQHSE and the
to manage Measurement Departments.
companys turnover this period ?
QHSE staff deal with quality, health & safety and environmental issues.
We
To canthis
answer see that we
question 3 must
staff firstcan
assess cope
the with
level of8.4m ofthat
turnover turnover,
each person orcan
2.8m perand
support, person.
to do thisThis is to
we need the
To do this we need to refer to the decisions made on the Construction Screen.
benchmark
Measurement
use for staff
the Past Performance all future
(quantity
button. staffing levels for
surveyors) the Head
ensure that moneyOfficeisDepartment.
recovered from the client.
The task of the Overhead Manager is to ensure that the level of staff in each
department each period is able to manage the companys ongoing jobs without any
deterioration in the performance of the jobs.
Well now look at an example of how to set the appropriate staffing levels.

Main Quit
Entering Overhead Other Dept Decisions - 2 Entering Decisions
The
Wethe
Since
On
staffing
havestaff seen
3Construction levels
that
can handle
screen,
for
the
8.4m, the
and
and
QHSE
appropriate
the turnover
assuming
and Measurement
is staffing
likely
appropriate levels
to be around
labour inDepartments
8.6m,
allocations the Head
we have
have been
areofdetermined
Office,
a shortfall QHSE
Head and
Office in and
staff, theneed
same
to takemanner,
made, on an
Measurement
the extrabased
Departments
anticipated uponforbenchmark
staff.turnover theare linked
period staffing
to the
is calculated levels:-and turnover.
companys
as follows anticipated turnover levels.
Having
To
(Total performed
overcome
Labour the
On shortfall,the necessary
there
Site * value perare
man period)analysis,
2 choices :- 1 extra person is required in each department.
But what
Employ morehappens
companys ifstaff,
we get our
bearing calculations
in mind that there iswrong,
a limit on and the staffing
the number levels
of new company are
staff thatnot
can be
sufficient to cope with the turnover in a period ?
This equates
employed eachto :-
period, as defined in the Company and Financial Information (3 for Head Office). New company staff also
Job
incur 1: (27 x 80,258)
a recruitment = 2.2m
& training cost in their first period.
Job 2: (95 x 27,086) = 2.6m
Understaffing
Employ agency staff offorthe departments
the current period only.can have
Agency staffserious affects
attract a higher salaryacross all jobs
than company staff. being
etc
progressed,
Total:
Since the companynamely :-to increase
is looking 8.6m turnover in the next year, its more cost-effective in the long run to increase the
companys own staff rather than use agency staff, so well employ an additional 1 company staff, which is within the limitations
for new staff.
Head Office, an increase in job costs (build costs)
QHSE, an increase in job costs (build and risk costs)
Measurement, a reduction in measured value (turnover)
Understaffing is a false economy. It might reduce overhead costs, but can significantly
reduce job profits, resulting in reduced operating profits for the company.
The value per man period is shown on

Conversely, excess staffing
the Job levels
Details (for job 2),can reduce
and is :- costs and increase measured value, and
the benefits can far outweigh the additional staffing costs, but only up to a point.
(original bid / total man periods)

Main Quit
Entering Overhead Non Dept Decisions Entering Decisions
As
Idlewell as Pool
Project
Labour the (Construction
Managerdepartmental
Pool (Personneloverheads, there are a number of non-departmental overheads
Screen)Screen)
Management
Project
The managers
companys ownemployed by labourers
site-based the company
whowho
are are
not not currently
currently allocated
allocated to on-going
to an an on-going
job job
are are
heldheld in
in the
for which
the Idle
Idle
decisions
Project
Labour
are
Manager Pool.
Pool.
made in other areas, namely :-
Idle
They canproject
be placed
Idle Labourers
managers
incur there
a costifwhilst
:- (Personnel Screen)
they are in the idle pool, so it normally makes sense to either pay them off,
or allocate them to appropriate contracts, which is the responsibility of the Construction Manager.
AIdle labour
job has pool and
just finished, (Construction Management
the project manager Screen)
is placed in the pool until the company decides what to
do with him a decision is made to deliberately keep excess labour in the idle pool. This may happen if the
Sometimes
The project
company managerto
is expecting has
winbeen recruited from job,
a labour-intensive the market
and its for use on
cheaper toapay
future
themcontract, and
for being theincompany
idle the short-
Well
term, take
does not want
rather atobrief
than risk look
incurlosing
high attoeach
them
training one.
a rival.in
costs employing new staff in the future.
Project managers must be paid their salary whilst they are in the idle pool, so it makes sense to try and
allocate them to appropriate contracts, which is the responsibility of the Personnel Manager.

The Demo the screen
complete
Main Quit
Estimating Decisions Entering Decisions
The Companys marketing effort last period will have enabled the Company to prequalify for
a number of jobs, which are shown on the estimating screen.
If the Company intends to bid for a job, the Estimating Manager must decide how much
effort (man weeks) to put into pricing the job, which involves estimating costs and
associated risks.
It is important to devote the necessary resources to produce accurate estimates, creating

high confidence in the estimate, and enabling more informed and competitive bidding.
Entering Decisions Estimating Accuracy Main Quit

Entering Estimating decisions - 1 Entering Decisions
The Estimating
Its period Manager
5, and must
after the now decide
company how many
prequalified forman-weeks
3 new jobsoflast
estimating time need
period, the
Estimating
to be allocated
Manager
to produce
needs to
an decide
accurate
which
estimate
of theofjobs,
the costs
if any,and
to price.
risk involved in the
completion of job 38 ?
The Estimating Manager needs to consider two factors in determining the number of man-weeks to allocate to the estimate.
The Estimating Manager is particularly interested in job 38, which has the following features :-
The anticipated estimating
Build cost
Onlyrequired to the
produce an accurate estimate,
forwhich
It is a traditional is based uponnot
thethe
jobdesign
size. In this case
job, where contractor is responsible the build only, and
it is 0.11% of the approximate value, or 3,300
It has an approximate value of 3,000,000
The job It is classified
involves theas one of high of
strengthening complexity, requiring between 10 and 20% additional estimating cost. The Estimating
a canal tunnel
Manager decides
The Estimating
The client to add
Manager the full 20%,
mustWaterways or 660
now decide how many man-weeks of estimating time the 3,960 equates to ?
is English
The job is categorised as a Water & Sewage (sector 5) contract
Thus, the
The Companycombined estimating cost is 3,960, which
that should guarantee
costshigh confidence thatAllowing
the estimate will be accurate.
The joband Financial
is classified asInformation shows
medium complexity an estimator 27,000 per annum. for 4 weeks annual
leave, this equates to 563 per week (27,000 / 48).

Based upon these calculations, the estimating cost of 3,960 is equivalent to 7.03 weeks (3,960 / 563), which the Estimating
Manager decides to round down to 7 weeks.
Main Quit
Entering Estimating decisions - 2 Entering Decisions
Allocating
In line
Key with
Points thetheappropriate
companys level strategy
of resources
for growth, willthere
Because the
instilEstimating
are high confidence
currently Manager
3 estimating in
staffalso
inthe
thedecides
accuracyto
department of
this
If there is a shortfall in estimating manpower available,period,
some jobs
all ofwill
thenot
companys
being given
owntheir
staff,full
there
allocated
are 24estimating
man weeks of
the
cost
time,estimates,
orjobs 35 &and
even worse, 36,be:-giving
not plenty
costed at all. of choiceestimating
for submitting
time available.bids next period.
Enable
Since more
jobs are competitive
costed bidsany
in job number order, to shortfall
be tendered.
7 man
will weeks
affect have now
the higher been allocated,
numbered jobs. leaving plenty of resources for
further costing of other jobs.
Enhance
The client satisfaction.
company are not able to bid for jobs that are not costed.
Allocating insufficient resources will result in low confidence. This will not please the
Client, and the Company may not be allowed to bid for the job. Even if bidding is
permitted :-
The estimates may be too low, resulting in a low bid. If the job is won a loss would
probably be made on the job since the true costs are far higher than expected.
The estimates may be too high, resulting in a high bid. This would almost certainly mean
After the estimating decisions have been made, 23 man weeks have been allocated, still leaving 1 week of unused
theestimating
job is time.
not won.
Although the extra 1 week is a wasted resource, the anticipated steady growth should ensure there is no wastage in the
future. Indeed, an increase in estimating staff may be required in the following periods.
Estimating is only the first stage of the 2-stage procurement process. The bidding takes
Any increase in estimating staff takes place on the Overhead Screen, and is covered in more detail in the Overheads
place nextsection.
Decision period, when the results of the estimating are known.

Main Quit
Bidding Decisions Entering Decisions
Each period the company is given a number of jobs for which a bid can be entered. These are
the jobs that the previous period the Estimating Manager allocated estimating resources to.
Entering Decisions Sequential Tendering Will we win the job ?

Choosing Consultants Job Risk Main Quit
Bidding for a job - 1 Entering Decisions
For
Design
Theeither& Build
Company typeareof able
job the estimated
to bid for jobsbuild
that cost
werehas already
costed been
by the calculatedDepartment
Estimating by the
Estimating
You,
last the contractor,
period, Department,
providinghas and
responsibility
that forclient
the designfelt
for
& build
both
the jobs
the the
Companydesign
estimated
put and thedesign
enough build. cost
effort into has
the also been
determined.
estimating. These cannot be changed.
For Design & Build jobs a bid consists of :-
If you intend
There are two totypes
bid for of ajobs
job,that
you now need to enter
the Company thefor
can bid remaining
:- elements.
The estimated build and design costs
There are more elements required for a design & build job, but the elements to be
Build Only
considered
An design
The allocatedinclude all those
hasconsultant
already toinproduce
been a bid for
produced a build-only
the
fordesign job.
the Client, Hence,
and you, thewellcontractor,
concentrate ononly
are how to
form the bidfor
responsible forthe
a design
build.& build job.
Oncost; to cover additional costs not included in the build cost, consisting of :-
For Build
(+) Site
Onlysupport
jobs a bidcosts
consists of :-
(+) Contingency for risk
The (+) Project manager
estimated build cost costs (salary and recruitment charges)
(-) A negative element to represent anticipated savings on the build cost from the
design to
Oncost; produced by the consultant.
cover additional costs not Passing
includedsome saving
in the buildonto
cost,the client makes
consisting of :- the bid
far
(+)more
Sitecompetitive
support costs
(+) Contingency for risk
Markup (margin);manager
(+) Project the profitcoststo (salary
hopefully
andberecruitment
made on thecharges)
job
Markup (margin); the profit to hopefully be made on the job

Main Quit
Bidding for a job 2 Entering Decisions
Lets assume
The Jobthat
A consultant needs to the Company
be allocated
Details button decides
to produce
can be used tothebid for job 29, a Design & Build job. How is the bid
the design.
to display
formulated ? compiled
information
The Allocate Consultant
by the estimators about job 29.
button can be used to display a list of all available consultants, and an appropriate consultant for the
job can be found by reviewing the profiles of each consultant, and matching the consultants experience to the job sector.
This is the key data to be used in determining the final
bid.
The choice of consultant can impact on both the build and design costs. Good consultants produce designs that save on
the build cost, but they charge more for the design.
The saving in build cost that can be achieved by allocating the best possible consultant for the job is given in the Company and
Financial Information.
For job 34, a Building & Commercial contract, consultant 14, Chester Consultants have been chosen due to their expertise in
the Building & Commercial sector.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
KeyBased
Point upon using a reasonable consultant designer, the estimated design cost was calculated as 11% of the build
The estimators deduced that the estimated build cost would be 9,733,391 for the job. This is automatically incorporated
Thecost.
list ofAsavailable
with the consultants
build cost, changes
this each period
is automatically due to some
incorporated consultants
into the bid, being unavailable.
on-cost The reasons for unavailability
andalthough thesubcontractors
provides a mechanism for
into the bid, and cannot be altered. It covers the labour, plant, materials specialist needed to complete
are adjusting
displayed using the Unavailable button on the Allocate Consultants Screen, and a typical reason is too much current
the job. the estimate if a better designer can be found.
workload.
Theirconfidence
confidenceininthe theestimate
estimated design cost washigh,extremely high, sinceenough
they devoted enough timetotocomplete
completeaathorough
Their was extremely since they devoted time(man weeks)
thorough estimate.
estimate, and consequently the true cost should be close to the estimate.
A Y must be entered to indicate that a bid is to be submitted.
If a job is won, the true design cost will be charged, which will vary from the estimate depending upon both the
--------------------------------------------------------------------------------------------------------------------------------------------------------------------
accuracy of the estimate, and the choice of consultant to produce the design. Consultants without the required expertise
Key Point
Iffor
thethe
jobjob do not charge the full design cost,
thebut exceptional
neverconsultants will charge more. the build costs when the job
is won, the true build cost, which company sees, will be used to calculate
is progressed.
If a team wins a d&b job the design cost will be payable pro-rata over the planned duration of the job. If the job
finishes early the remaining design cost is paid in full.
Main Quit
Build-cost savings due to the quality of the design

A good consultant will reduce the true build costs by producing a
quality design, and we are informed that the saving can be up to
3% of the build cost.
We can pass some of this opportunity for saving money onto

the client by reducing the on-cost. This will make the bid more
competitive.
Risk For job 29, since we chose a seemingly very suitable consultant,
At the estimating stage, an assessment was made of the potential who risks
we deem that could
to be occur
one ofon thethe jobincausing
best monetary
the sector, we canlosses
possibly
Project Manager Costs
to the company. The risk has two elements :- save the full 3% on the build costs.
An allowance is made in the bid for the costs of recruiting and paying a project manager to oversee the job for its planned
duration.
The likelihood of the risk occurring (risk level), classified as No, But Low,
how much Medium or High,
should and alsothe
we reduce expressed
on-cost as by a? % chance
of happening. The Oncost is an additional allowance added to a bid to cover the contract
Project
The managers
severity (cost)varyif thein risk
experience
hits, which andissalary, and and
expressed
costs over the
as achoice
%You
above of
thean
of the appropriate
build
build cost.design
and project
costs.manager for a job can have serious
should always assume that rival bidders will try and allocate a
consequence on the progress of the job.
good consultant, although not the very best, and will pass on a
An allowance
Site for the risk cost needs to be made
For ato
Costmanager details (salary etc) can be found on the Personnel cover
Design the
and company
Build
around job1%ifthe
the riskanticipated
ofOncost
the occurs.
covers :-build cost saving onto the client,
Project Screen, and the Company and Financial Information
Site Costs pay for the supportastaff making thea rival
and services required to administer site. bid more competitive.
Forshows
job 29thethecost
riskoflevel
recruiting project
is high, and hasmanager.
(+) Site
a 40-50% chance
Costof occurring.
IfThe
the Companys
risk hits there will be a 1.3%
estimators addition
determine the
the to (+) build
estimated cost,oforsite
Contingency
level 0.013
for cost
Well Riskx required.
pass 9,733,391
on 1.5% =i.e.,
This 126,534.
0.015
will notxbe9,733,391
the true cost. The todegree of
Job 29 is a 3-period job, and well anticipate recruiting
(+) Project an excellent
manager project
costs manager whose annual salary is likely be about
inaccuracy
60,000. is governed by the amount of effort put into producing the estimate.
We could cover ourselves for the full 1.3% of the risk cost,
(-) Design but Ifthis
savings oncould
the make
the build
consultant our bid uncompetitive
costs
manages the anticipated (too3%
high.
build cost saving,
The company never sees the true thenestimate
we will havewhenmade an additional 1.5% in profit. Any saving
OurThe
Well cover
oncost
project has now
manager
ourselves for
been
allowance
45% of is cost,
determined
the
andforhas
:-risk cost,
To orjobto
enter
rely onistheir
29,
theand
56,940, On-Cost
which use1.5%
makes the ourEnter
bid
making
On-Cost
far more
bidding decisions,
button.
competitive, but does
and deciding
provide some
how
much to allow for the
automatically site costtointhe
transferred theBidding
bid. Screen. below will reduce any profit that is made on the job.
cover if the risk occurs.
Salary: 45,000 (for the 3 periods of the job)
For Job 34, the
Recruitment estimated
Charge/ site cost
bonuses (15% is 1,946,676
of annual salary): 9,000
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------
Key Point
Since
Total:confidence
Assuming 54,000 in the estimate is very high, the estimate should be close to the true cost, so well allow 1,947,250 in the bid,
adding a small % on job,
we win the if thefor
to allow risk does not inaccuracy.
estimating occur then the extra risk becomes profit, or margin, made on the job.
Conversely, if the risk hits it will eat into job profits, although this will be offset by the risk contingency were building into the
bid.
Main Quit
The key part of the companys bidding strategy is deciding which jobs to try and win, but
there are other factors that impact upon the decision process :-
Sequential Tendering can be used to dynamically alter mark-ups as bids are submitted.
The size of the companys capital base controls the level of work that can be
undertaken, and its important to use the workload limits button to determine if the capital
base needs to be altered to fit in with the companys bidding requirements.
ToThere
What
determineisthe
level of a limit
mark-ups ontorival
mark-up
are the number
be applied,
bidders likelyof
a number ongoing
to apply
of factors
? Basedjobs
need tothe
upon be company
or company
taken can :-support
intorequirements,
account at any
and potential time,
rival bids, as
defined in the the
When determining company
mark-up, and financial
the level that mayinformation.
be setwell
by enter
rival bidders
a markupneeds
of 5.5%,
to beconcluding
consideredthat
The bid has now been set for job 29.
very
any
carefully.
rival bid may not
Covering other company costs be lower. This should also generate enough profit to contribute to
The profit made
Assuming similaracross
estimated
all jobs
design/build
should at costs
least cover
and on-cost,
the paying
company
setting
off related
the
too aforementioned
highcosts After
a mark-up
not entering
covered
could
companyin the
make
the on-cost,
costs.
the the bid is
bid uncompetitive,
andThe
individual nature
not give
jobs, ofasthe
thesuch
Company :- acompanys relationship
chance of winning the job. with the clientsautomatically
Well know next period with whom
whether or not the bids
we have
updated by theare
won the being
job.
system
The markup applied to a bid is one of the companys most critical
submitted. If bids are very close, a job can be won
decisions, andoris loss on client
theinmargin, or profit,relationship.
to be mark-up
made by of theany
jobrival
--------------------------------------------------------------------------------- over and
Company
In the early overheads
years, the Company and Financial Information gives some help determining the likely
Increasing
bidder, in thisthe
case
company
the computer.
capital base
We are told that 5% may above
Key the
winpoint
a costs.for medium-sized jobs, which job 29 is, since this
tender
Paying
is the minimum
dividend mark-up
to shareholders The company
that would likely to be submitted by any rival bidder. incur a cost for each bid submitted, depending
Itupon
is entered
the size as of
a %,
theand
job.isThe
added
coststo are
the defined
combined Design, Build and
in the
Once the bids have been submitted, whether On-Cost. or not the company is successful is dependant
If the
In theprofit
final over
yearsallwejobs
cannot
progressed
be so certain
does not
of the
coverrival bids,company
these additional
since there and financial
company
are morecosts,information.
companies
then thelikely to be bidding, and the
both on could
company
computer the becomes
rival quality
suffer of cashflow
serious
morethe bids themselves,
competitive,
problems. and
so setting the level of outside influences,
mark-up becomes and it wont be till next
far harder.
period that the bidding results are known.

Main Quit
Sequential Tendering Entering Decisions
Sequential Tendering is a mechanism for varying markups during the bidding process,
depending upon how many jobs have been won and/or lost.
Consider the following situation where bids have been submitted for jobs 25,
If we lost job 25, then it would be important to wins jobs 29.
and 29.
Lets suppose that we would be satisfied with winning job 25, and that winning job 29 would be a bonus.
We can transmit this thinking into the bidding process by indicating
The bids are submitted in job number order.
If thisIf was
we lose job 25
the real then and
world, the markups for subsequent
we had won that
job, ifwin
we
If we we
mightjobs
lose
job, 1will
try
thejob
and bethen
adjusted
for
foraall
extract
markup as
higher
job follows
subsequent
29 be:-increased
margin
will jobs
from(in
jobthis
29.case
by 1% tojobs 29)
6.5%,
the markup should be decreased by 1%, giving us a better chance of
If the bids wereenabling additional
submitted margin
in the real to be
world, thenearned.
the markups for job 29 may
for job 29 from 5.5 down
We can transmit our strategy into to 4.5
the bidding winning
process the
by other jobs.
indicating that if we win a job then for all subsequent jobs,
be adjusted depending on whether or not job 25 was won.
in this case job 29, the markup should be increased by 1%.
In each case the margin to be earned will be reduced, the chances of winning the jobs is better.
Sequential Tendering provides a means for simulating this bidding strategy,
and enables the markup of jobs to be varied depending upon the result of
previous submissions.
Well switch on sequential tendering by clicking on the check box.

The Demo
on is
the
now
screen
complete
to advance the demo
Main Quit
Personnel Management Decisions Entering Decisions
All on-going contracts require a project manager to oversee the job, and each period the
Personnel Manager needs to make decisions about who the company should employ.
Employing the most appropriate person can noticeably improve the progress of the job, and
conversely the wrong person can adversely affect progress.
Entering Decisions Project manager Information Project manager performance Main Quit
Entering Personnel Decisions - 1 Entering Decisions
At
Projectthe start
managers ofbe period
areidle 7incurred
the
concerned be companywith employs
the overall thejobs,following
off the planning andproject managers
co-ordination to:-
withof arecruit
project
If possible aBrock
A Search
Since Phrase
there is and
can
nobody Gouda
entered should
to narrow placed
down on
the suitable
list. on-going and there are 2 jobs beginning this period that
fromdo
There are number ofin the
charges pool suitable
for for jobs
recruiting, 41 and
paying 42, Water & Sewage
Brocks profile contracts,
and well have
past history the company

not
the
from
and Brock
have
market
relocating and
i.e.,
inception theGouda
a project manager
available
project to in the idle
:-project
completion
managers. pool that
managers
aimed at have signed upGoudas
meeting the with a recruitment
clients
indicate agency.
requirements
profile
a lot ofand past
experience andand
history with ensuring
the
expertise company
in the
The key
to Job
finding
41, the
a Water
right &person
Sewage is to
contract
is to review the profile (or cv), which covers both work and personal details, both of &

which
Project
completion
may
Starting Job
be
with
Managers
on
important.
42,
job a time,
Water
41, a &
Water
12,
within
Sewage
&
55,
Sewage
26
cost
contract
job,
on
and
we
jobsto
first
24,the
the
select
28 and
required
job by
29 respectively
indicates
Building
quality
clicking on
experience
&
the
Commercial
standards.
appropriate
and expertise
sector,
line,
but
and then
in
not the
in
use
Transport
the Water
the
These are shown in the Company and Financial Information. sector.
Sewage sector.
Recruit button to choose from the available project managers.
OnBut close
how examination
suitable are of all
they
suitable
for theproject
jobs ?managers, it appears that Davis is we
the ideal choice forTransport
job 41, our Water & Sewage
A
contract.project manager with well-matched experience for
Since
Sincea particular
we dont
donthave
haveany type
any of
Building job
&work will handle
in the
Commercial pipeline,
work in
well payoff Gouda
the pipeline, using the
well payoff Brockpayoff
usingbutton
the payoff button.
available
We can determine resources morebyefficiently,
their suitability using the Details whilst
button.a project manager with inappropriate
We experience
can use the Select will button
impairto contract efficiency.
identify our choice.
------------------------------------------------------------------------------------------------------------------------------------------------------------------
Key Project
Point Managers employed by the company are either :-
Each period, the Unavailable button can be used to show details of project managers who are unavailable for a number of
In including
reasons, the idle:- pool awaiting a placement on site; once a job finishes the project manager on
They may be off work due to illness
Ifsite is placed
they have previouslyin resigned
the idle from pool. Idle project
the company, they maymanagers
bear a grudgestill and behave to be
unwilling paid,
to work for so its far
us again for amore
while
cost-effective to have them working on site than doing nothing.
Allocated to a specific on-going job
The Personnel Manager needs to make decisions about :-
Which idle project managers to payoff

Allocating suitable project managers to on-going jobs, especially those that dont
currently have one, or have a poorly-performing one. The project manager can come from
the idle pool, another job or from the the market (a list of available ones who have
registered with recruitment
For job agencies)
42, another Water & Sewage contract, Project
Manager 2 (Ahmed) was chosen from the available list,
based on a lot of previous experience in the sector.
Main Quit
Entering Personnel Decisions - 2 Entering Decisions
Project
But
Eachhow Manager
job now
do We
wehas
can
know Resignations
aincrease
project
the affects
manager
the performance
that different level
levels
of theofproject
bonusmanagers
have on performance
for the period by
? paying them a bonus.
Project Managers can resign from the company for two reasons :-
allocated.
The clues lie This
in the
is aProject
% of their
Manager
salaryHistory,
for the period
which shows
(quarterly
in thesalary).
level of bonus paid for each period a project
manager
However,has allocating
worked in foritself
the company
may not (on be site), and the affects.
Good to
enough project
secure the managers
services of whose
projectaverage bonus over the time they are on a particular job is below a
certain
Bearing
managersinlevel
mind may
selected
the from resign
information because
the market, they
given,initthis
look likedoa 4%
notbonus
feel they
shouldare being
improve adequately
performance rewarded.
noticeably. If we pay
too
casemuch
19 and
bonus,
2, andit may
we maybe money
have to down
offerthe them
drain, because there comes a point when the performance does not
The
improve
a top performing
cash incentive
no matter tohow
secure muchproject
their
bonus managers
services.
is can is
paid; the trick betopoached by rival companies regardless of the level of
find the level.
bonus they are paid.
Since
We can4%check
appears
if this
toisresult
the case
in a noticeable
using the improvement, well give all the project managers a bonus of 5% each,
to
Golden
hopefully
Helloconsiderably
button. boost performance.
In either case, once a project manager has resigned they cannot be re-employed next period. In
The top project managers i.e., those with experience and expertise in one or more sectors, can command golden hellos to
addition, project managers who resigned due to feeling unrewarded may bear a grudge, and many not
attract them to particular companies.
be available for some time in the future.
The golden hello could be in the form of perks, such as special pension rights, share schemes, medical insurance etc. In this
scenario the perk is in the form of a cash incentive, which incorporates all of the above and more.
You are given clues as to the likely incentive required. If the incentive required is None then no further action need be taken.
The incentive, if needed, could be higher or lower than what is suggested. It all depends on how much you want to recruit that
consultant.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Key Point
If we dont offer enough incentive, and our offer is rejected, well be allocated an unnamed agency project manager for the
period, whose performance is average, and whose annual cost is shown in the Company and Financial Information.

Main Quit
Construction Management Decisions Entering Decisions
The task of the Construction Manager is to progress the jobs that have been awarded to
the company by :-
Ensuring the workforce (labour) on the sites is sufficient to progress jobs in line with
the companys strategy for job completion.
Providing enough site support to keep the jobs running smoothly.
The profits made each period on jobs progressed are paid straight into the cash account.
Entering Decisions Key Points Main Quit

Entering Construction Management Decisions - 1 Entering Decisions
Due
The
When
At to
The
theConstruction
Consider the the
deciding
end requirements
upon the Manager
offollowing
Construction
the last ofbemust
each
situation.
strategy to
Manager
period, andfirst
used forindividual
begins byensure
completing
available job,
jobsthat
looking
at the
ait
at is each
number
Key likelyjobthat
has
of different
beginning
the
point labour of one
sufficient
of two
scenarios
requirements
period situations
labour
for:-jobto29.
are normally
7, were enable
may
used :-
have
them
Its
Try to
48and tocomplete
men
the beprogress
inresolved
start the
of in:-
idle
allperiod
jobs line
labour
on 7, with
and
time pool
the company
companystrategy.
The default labour requirements for each on-going job are
has 5 on-going jobs :-
the levels from the end of the last period.
229
Try
There
An
and
Job men
overall
are
20 is on
complete
two
in ongoing
all
labour
its
jobs
types
3 jobs
earlier
nd shortfall;
of
period (229
than
labour
but
the
new
has are
planned
that
a the be
recruits
can
planned companys
duration (e.g.,
used
into
duration the
:-
of own
complete
4
aoperatives;
3-period job in 0
companys
periods own are subcontractors)
2 periods)
workforce or
A mixture of the above
However, the default levels are unlikely to be the required
subcontractors
If we
Job take
28 is the
may
in itscombined
2nd
have idle
period
to be taken
labour
but has
on,site-based
and
a planned
or jobsones
duration
may even
labour,
of for
4idle
periods
be
thedelayed
company in has
the ashort-term.
current
In all cases the Construction Manager needs to assess the labour requirements each period for eachsite
The companys own labour; available either in the labour pool or on
the current period.
job based upon the
workforce
beingof
ASubcontract
labour 277
surplus; men. being
labour
nd jobs couldused be overmanned
on site to aim at early completion, or labour may have
Job 29 is in its 2 and final planned period and needs to be completed this period
strategy used.
to be released.
Jobs labour
Planned 38 andlevels
43 were
each won last
period wereperiod, and are
determined in their
during first period.
the estimating stage in order for the job to complete on time,
and they can be used as guidelines in setting the labour levels for whichever completion scenario is chosen.
To complete a job early it is possible to overman above the planned levels. Overmanning limits are given in the Company and
Financial Information, and are sector-based.

Main Quit
One
To
The set important
Performance
the point tolevel
grasp foristhethe29useweofneed
the Own Labour Transfers
The(planned
2 boxes.
transfers tolabour
the idle labour pool are added to the pool,
Period 7 isnew labour
the second tab shows
period job
of percentage
job 29, of
and itstofinal
the
adjustjob the
completed
planned own and
period. subcontract v actual) required this period.
leaving 50 men in the pool.
When the own labour level is set%forof ausing
job, the number may varywasfromahead
the level onplanned
site last %period.
the The difference (increase
At
Having
Theretheareend
lookedof period
at
currently the836relative
the
of actual
the merits
companys the job
own either
completed
the companys
operatives (green)
on site, butownthelabour of
plannedorthe
subcontractors,
requirement iscomplete
100. Construction
(red), Manager
or decrease) must be sourced from the own labour transfers. ThisIf possible,
can involve
well
a number
utilise the
of options.
men, who are costing the company
indicating
has decided thatitsthe
more
jobcost-effective
was ahead ofin schedule.
the long-term to try and use the companys own labour.
lying idle, on other jobs.
Normally, allocating slightly above the planned level each period is sufficient to complete a job on time.
If more own labour is required on site the options are :-
Bearing
For job 29,
thiswell
in mind,
reduceto complete
the own labour the jobfrom
in period
83 to 7,81we by could
transferring
allocatethe lesssurplus
than the(2)planned
to the idle
labour
labour
level
pool.
of 54.
Transfer labour to site from the idle labour pool (from ILP)
(Enter the details directly into the table, or Double click to open an input
However, since this is the final planned period of the job, we should take a closer look at how the job hasbox)
Take on new recruits
But how do we
progressed determine
to date, in order thetoexactmakelabour
sure we level ?
allocate sufficient labour complete the job, and as efficiently as
A combination of both
--------------------------------------------------------------------------------------------------------------------------------------------------------------------
possible.
Key Point
Conversely, if less owntolabour is required on own
site, labour
the options are to :-
The
Due choice
to a numberof whether
of factors usethethe jobcompanys
may be behind/ahead or
ofsubcontractors is dependant
schedule, and require on alabour
more/less number of factors,
than planned.and is
Transfer excess labour to the idle labour pool (to ILP)
discussed in a separate demo.
Pay
Using somethe ofJobtheDetails
workforce off and focusing on the Procurement tab, the planned % of the job that should have been
button,
We can use the Job Details button to investigate further.
Use a combination of both
completed at the end of its first period was 40%.
Since there are
However, a number
using of potential
information from theoptions, you must
Job Progress balance
tab, theseen
it can be labour movements
that the actualon % the jobjob
of the using the own at
completed labour
the end of
transfers
its thirdboxes.
period Failure to do the
was 51.3%; so will
job cause an of
is ahead error to be displayed,
schedule and
(as we also no further
deduced changes
earlier from can be made analysis).
the graphical until the line is
balanced.
Since there is 48.7% of the job left to complete, well allocate 49% of the total labour (166 man periods), which allows for any
Subcontract
productivity labour changes are much simpler, and are automatically handled by the computer, by either taking on or laying
reductions.
off as required.
Hence, well allocate 81 men (49% of 199) to job 29.
The planned allocation was 100 men, which although guaranteeing to complete the job, would have completed the job a lot
earlier in the period, which would have the following detrimental affects :-
Labour is still retained until the end of the period, incurring additional labour costs
Labour could be utilised other jobs, where it may be more productively used
Main Quit
Having
The
After
Attention
Key Point
Companynow
Construction
The making now the established
turnslabour
and Manager
toFinancial
joballocation
43, which the
now labour
sets
decisions
was
Information won the
for requirements
lastlabour
each
period,
indicates job, levels
thatthere
and
it hence
may for
foristhe
be eachfirst on-going
itsother
ainsurplus ofon-going
planned
labour job,
jobs
period.
left the
in the :-next
byidle pool.task isthe
If this is to
case, there are a number of options :-
allocate
takes 2 there
Where
Inand Setting site
weeks
labour
ansupport
is (a sixth
overall to
of alabour
levels in
period)ensure
to traininathe
shortfall
line with
the jobs
recruit,run
newperiod,
planned
so smoothly.
labour levels where jobs are NOT in their final planned
a line with company strategy, we
the wish to trybyand complete
newtherecruit
intention
is only
is to5/6bridge
effective. shortfall taking on the job on time, so well allocate the planned labour level of 56 men
period,
toLeave
new and
the recruits
job.
them
Theintrying
planned
the pool
rather tolabour
than use
for usethe
use nextcompanys
levels period,
were determined
subcontractors, own
if they arelabour.
this likely
at the
to be
estimating
required stage.
Use the Number of men to Layoff This Period to layoff as much of the surplus as possible prior to any labour allocations
strategy
To allow may not well
for this, be possible
employ due 53 newto themen limit on theof 44),
(instead
Setting
However,
Instead of labour
there
transferring
are levels
only men
12 by
men
to examining
the
leftidle
in the
labour
idle the % pool.
jobsite,
progressthemto date where jobs so are
weINare their final3 choices
plannedto
onlabour
pool
in afrom Anpay
additionalstraight
44 menoff are
from
needed,
site faced with
which should
number of new giverecruits
us effectively
that can44 bemantaken periods, as
period,
period,
make-up
required.
as and using
theinshortfall
defined the
the Company:- companys
and Financial own Information.
labour.
Underallocate this period, which will put the job behind schedule, but attempt to catch-up later
The limit can
For 20,vary each period.
Takejobson some 28
New and 38
recruits theintolabour
our own levels werewho
workforce, setareasnot
follows.
so effective in their first period whilst they are being trained
Use subcontractors, who are fully effective, but cost incur an additional premium
For period 7, only 53 new recruits are required, which is
lower than the limit, and so subcontractors are not
Since company strategy is to employ our own operatives, and we dont want any jobs to fall behind schedule, well take-on and
required.
train some new recruits, but is 44 enough bearing in mind they are not fully effective in their first period ?
Main Quit
Site costs
Eachlabour
The
payrequires
man period
and site
for the support
cost decisions
6,495 site
have
staff
costnow
to enable
and
been made
services
the productivity
that are
for all the companys
needed
of the workforce
on-going
to be
jobs.
to run a site.
maintained i.e., there will be no
reduction or improvement in the normal levels of output.
When a bid was placed for a job, the on-cost figure included an amount for the site costs to
At first glance it appears that efficient use was made of the companys existing own labour, since the idle labour is empty,
be
Thispaid
and some during
will be theestimated
subcontractors
the original lifetime jobof
used on site 15 the
cost
were contract,
divided
replaced.
by the based
However,
total numberonofthe
it wont be estimated
labour
untilperiods
next period level
required
that for of
a full site
theanalysiscost
durationcan
of the
be job.
required.
undertaken of just how well the jobs were progressed this period.
For 110 man periods we require 110 x 6,495 = 714,450 which well round up to 715,000.
Each period
For job 20, thethelabourcompany
allocation must decide
for the period hashow much
been set site
to 110 men.cost to allocate to the job, depending
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------
It should
Key Point be noted that the ratio of 7,933 is only an estimate of the real ratio, and how accurate our estimate is depends on the
uponWell
level the
of now level
Any profits (orof
What
In the level
same setway
estimating the of
site
losses)
labour
level
effort,
cost
that for
and the
should
labour
generated
allocated,
other
confidence
levels jobs
weare
from set using
infor irrespective
thethe
theinitially
jobs
the
estimate.
set
will 110
betosame
men ofcompanys
technique.
? to the
the levels
added that
whether
were present
the labour is the companys own or
cash account at the end of period. Hopefully,
subcontractors.
on site
overall at the
there willend
be aofprofit
the previous period,
that will help so the amount
to increase of moneyvalue.
the companys to be allocated
ForThe
job 20, we have extremely high confidence in
for site administration is assumed to be the same as last period. set
Job Details button can be used to display the estimate,
information to so
help wellthe
pay thecost
site calculated
level. amount of 715,000.
Instead of paying
However, the calculated
the levels of site costlevel, there are
last period areaunlikely
number to
of be
alternative strategies,
the required which each has a number of drawbacks :-
level for
this period, unless there has been no change in labour levels on site.
Pay less site cost.
This may appear to save money, but adverse affects on the productivity of the labour on the site will reduce overall value, and
delay the job, and the cost will outweigh the benefit.
Pay additional site cost

This will cost more, but will marginally improve the site productivity of the labour and the progress of the job. However, the cost
will almost certainly outweigh the benefit.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Key Point
Whilst a job is within its original duration, a minimum level of site cost is required to keep the site operational, based upon the
planned labour for the period. This minimum amount will always be incurred, even if a job is deliberately delayed e.g., no
labour allocated for the period.

Main Quit
Measuring Performance Measuring Performance
Performance Indicators
External Performance Review
Performance Statistics
Main Quit
Performance Indicators Measuring Performance
The success of a team in managing their company is measured by the changes in 10 key
performance indicators :-
Turnover Contract Completion
Gross Profit to Turnover ratio Forward Workload
Operating Profit to Turnover ratio Forward Margin
Company Value Share Price
Capital Employed Client Satisfaction
The indicators are weighted according to their variability, totalling a 1000 at the start of
the early years.
As the early years progress the value of each indicator will change, highlighting
improvements or deteriorations in that area, but the overall total will be the measure by
which the ultimate progress of the company is determined.
Calculating Performance Indicators Main Quit

External Performance Review Measuring Performance
An external performance review (EPR) is carried out each period by an external consultant,
and is an essential aid in managing the company successfully.
The consultant looks in detail at all areas of the companys business, especially where there
may be problems, and compiles an appropriate report.
Provides a detailed analysis of all bids

entered for the selected period.
The nature is either :-

P if the comment is positive
N if the comment is negative
U if the comment is unclassified
Further Information Main Quit

Performance Statistics Measuring Performance
Company Performance Statistics provide a detailed set of statistics relating to all aspects
of the companys activities, and can be used to identify strengths and weaknesses, and
explain the rise and fall of particular performance indicators.
The use of Performance Statistics Main Quit

Obtaining Information Obtaining Information
Company and Financial Information

Job Analyser
Bidding Analyser
Interactive Information
Reports
Main Quit
Company and Financial Information Obtaining Information
Company and financial information parameters define the environment in which the
company is operating.
Most remain fixed for the time you are managing the Company but some can vary from
period to period, such as the prevalent interest rates.
Click on a hotspot for further information.
Main Quit
Job Analyser Obtaining Information
The Job Analyser is the gateway to detailed information about any of the jobs that the
company has prequalified for.
All Jobs can be displayed, or they can be filtered dependant upon their current status,
as show.
Main Quit
Bidding Analyser Obtaining Information
The Bidding Analyser, available from the External Performance Review screen, displays
the companys bidding results for a period.
Each job is examined in turn to see why it was won or lost, taking into account the various
factors that affect the bidding, such as cumulative workload and the size of the companys
capital base.
Main Quit
Job Analysis Details Obtaining Information
Depending upon the job status, different types of information is displayed :-
Information Availability
General Always
Procurement Estimating & Bidding stage onwards
Graphical Performance Job in Progress onwards
Job Progress Job in Progress onwards
Main Quit
Interactive Information Obtaining Information
Interactive information is available in a number of formats to provide details of the

status of the company, as shown below.
Graphical Information
Such as the past, current and
future forecast of the value of
work in each market sector
Tabular Information
Such as financial details
period by period.
Main Quit
The Report Options Obtaining Information
You can select multiple reports. Click on the hotspots for more information.
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Decision Form Options Obtaining Information
Sometimes it is more suitable to enter the decisions for a period on printed forms prior to
using the team module interface.
In this case, multiple decision forms can be generated by clicking on the Decision Forms tab.
Decision Forms can be

generated that are either :-
Blank; to allow entry of
decisions
Completed; all decisions
entered for the period
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Bidding Report Obtaining Information
The Bidding Report shows the outcome of the bidding that took place in a particular period.
Different Bidding Reports exist for the early and final years, as illustrated below.
Early Years (company specific)

All jobs bid for by a particular company are shown, along with the rival bid (computer),
and if the job is not won the reason is given.
Final Years (all jobs bid for in the period)

All jobs bid for in the period by any company are shown, along with the winning company
and bid, and the rival bids.
Companies 1 and 2 also bid
for job 43, but their bids
were not successful.
There is no direct link from

the companies to the bids,
so company 1 could have
Since no team/company number submitted either of the two
is given, the computer-simulated bids shown.
company won job 43.
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Job Details/Progress Report Obtaining Information
The Job Details Report displays comprehensive information about jobs that the company
prequalified for, including estimating and bidding details.
The Job Progress Report displays progress information on a period by period basis for
each job awarded to the company.
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Retention Report Obtaining Information
The Retention Report gives a detailed breakdown for each job progressed of any monies
withheld and repaid by the client.
A % of the measured value each period

is withheld by the client until the job is The retention is repaid by the client in
completed. two equal instalments in :-
The period the job is completed
Two periods after completion
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Forward Workload and Margin Report Obtaining Information
The Forward Workload and Margin Report gives a snapshot of the remaining workload
(turnover) and margin on any on-going jobs.
The companys capital base can only support a certain level of forward workload
(turnover), so the value at the beginning of the period can have a significant bearing on
the companys ability to win work.
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Idle Project Manager Pool Report Obtaining Information
The Idle Project Manager Pool Report gives a snapshot of the companys current idle
project managers.
Projects Managers can be held in the idle pool for use on future contracts, provided
they are not kept idle for too long, since they still have to be paid.
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Project Manager Details Report Obtaining Information
The Project Manager Details Report shows all the possible project managers that can be used
by the Company. Some will already be employed, but many will be awaiting employment.
The profile provides clues to the project managers expertise The employment status indicates whether the project
in each market sector, and should enable project managers to manager is :-
be allocated to appropriate jobs. Currently employed by the company (on site or idle)
Employed by another company, and unavailable (final
Having a project manager on site with the appropriate skills can years only)
improve the progress of a job, but conversely progress can be In the market, and available
hindered by a poor project manager.
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Project Manager History Report Obtaining Information
The Project Manager History Report gives a detailed account of which jobs a project manager
was used on each period, along with performance information.
The project managers basic performance is shown each period, along with the effects of :-
Time spent with the company

Any bonus paid in the period
The distance of the job from the companys head office
Taking over from another project manager at the beginning of the period, if that was the case
which result in the overall performance.
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Consultant Details Report Obtaining Information
This Consultant Details Report shows all of the consultants that can be used by the
Company. Some will already be being used on design & build jobs, but there may be many
others who have not been used to date.
The company profile provides clues to the consultants expertise in each market
The availability status indicates
sector, and should enable consultants to be allocated to appropriate design and build
whether the consultant is
jobs. currently available for use.
Employing a consultant with the appropriate skills can improve the design, and save
on the build costs, albeit at a higher design fee. Conversely build costs can be far
higher by using a poorer consultant, but there may be a lower design fee.
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Consultant History Report Obtaining Information
For each design & build job on which a consultant is used, the report gives an indication
of the consultants impact on the :-
build cost, which is affected by their expertise in the job sector, and innovative
qualities. The % change in build costs is also shown
design cost; which is affected by their expertise in the job sector
In the example show, Crawford & Partners were the best consultants used.
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Client Relationships Report Obtaining Information
The Client Relationships Report (Summary) describes the current state of the companys
relationship with each Client, and gives details of the value of work won, and at what
markup.
The Client Relationships History expands upon the summary, showing how the relationship
was arrived at.
The relationship depends on a number of factors relating to each job that the
company prequalified for with the client, such as :-
the quality of the estimate
how competitive the bid was
how the job was progressed
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Financial Report Obtaining Information
The Financial Report shows the period by period financial structure of the Company.
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Investment Opportunities Report Obtaining Information
The Investment Opportunities Report shows all the possible investment opportunities
available at the current time along with past performance information for each one.
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Investment History Report Obtaining Information
The Investment History Report shows all the concerns that the company has invested in
to date, along with the % returns and any build costs savings earned.
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Overhead Report Obtaining Information
The Overhead Report gives a period by period breakdown of the staffing levels and costs
in each overhead department, including unproductive staff, along with other overhead
costs.
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Marketing Analysis Report Obtaining Information
The Marketing Analysis Report provides the Overhead manager with detailed information
about the past, present and future market trends, along with the value of work prequalified
for to date.
The information enables informed decisions to be made about marketing strategy, in terms of
where marketing effort needs to be directed, and the size of the marketing department
needed to achieve the required prequalification targets.
The size of the past, present and future market is The value of work prequalified for each period is
shown, along with sector breakdowns. The current and shown, along with the amount of marketing effort (dept
future periods are estimated, with the accuracy of the size), and where the effort was directed (by sector).
estimates depending upon the size of the marketing
department.
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Risk Analysis Report Obtaining Information
The Risk Analysis Report provides a detailed analysis of the affect risk has had on the
company, up to the current point in time.
The report shows, for each job secured, the :-

Risk contingency included at the procurement stage
The total risk cost incurred to date on the job, along with influencing factors
There is also an overall summary.
Ideally, the company would be hoping that the overall risk contingency would exceed the
total adjusted risk cost, providing additional profit across jobs progressed.
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Period of the Game Glossary
Each round of the simulation is known as a period, which represents 3 trading months, or
one quarter.
The periods fall into three distinct phases :-
Historical Year
This covers periods 1 to 4, and is used to establish the history of the company before
you take over its management.
The Early Years

You take over the management in period 5, and run the company for a number of periods,
normally 8 (2 trading years). During this time the company is competing against a
computer-simulated company for any jobs that are available.
The Final Years

At the end of the early years the leading companies will be invited to compete against
each other and the computer-simulated company in the final years, which normally last
another 6 periods (1 more trading years). During this time the competition will be for
both jobs and people, such as project managers and consultants.
Based on the three phases the game period can be any value from 5 onwards, normally
finishing at 18.
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Overdraft Limit Glossary
The
Consider
amounttheof
following
money thatexample. The
can be warningfrom
borrowed message hasisnow
the bank not disappeared,
unlimited, andand thethe cash account
overdraft limit isbalance is below the
overdraft
shown in the Company and Financial Information. limit.
Its period 8, and after decisions were processed last period the companys overdraft has
The
reached
overdraft
1,318,122,
limit iswhich
fixed, has ------------------------------------------------------------------------------------------------------------------------------
andexceeded
does not vary
the limit
fromofperiod
1,000,000.
to period.
As a result, a warning
message is displayed. Key Points
But what happens if the overdraft limit
If all is
possible
exceeded measures
? have been taken, and the cash account balance still exceeds the
As soon as the Financial Decisions overdraft
Screenlimit, then no
is closed further warning
a critical action needs to be taken,
message appears.and the user is not prevented from
The message informs the Financial moving
Managerto another
that allscreen.
possible measures need to be taken to
The cash account can go above the overdraft limit when decisions are processed, but during
reduce the overdraft to below the limit.
the following period all possible measures need to be taken to reduce the balance to below the
The Financial Manager decides the overdraft limit. to take is to reduce the capital base by
best action
400,000.

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Factors that affect Share Price Glossary
The companys share price is one of the key performanceDividend

Gearing
indicators
Ratiopayments in measuring the
success or failure of the company, with a rising share
The price
Company
Future
Considerfinal
Changes
signifying
Value
Profitability
the following
Dividends factor
in the
example,
areaffecting
taxable
value
increasing
where
payments
of the share
thethe
a
declared
price
company is by a
from
Another
company is in
company's factor
period that
5.
board ofaffects
directors share
and price
given toisitsthe
industry confidence in the fortunes of the Company.changes
period
future to in the gearing
period also
profitability
ratio.
affect
(forwardthe share
margin)price.
of
shareholders, normally quarterly. They provide the
company,
To analyse which
the share is based
price upon
history wethe companys
Thean Gearing
incentive to own
Ratio stock
is the ratio of thecan
in stable use :-
companies
companys
The share price is influenced by :- Ifwork
the
borrowings
aFinancial
company
in
even if they
depressing
progress.
(cash
value
are account falls in
not experiencing
effectbutton
on
a period,
overdraft)
share price
much
toas
it will
its
have
growth.
assets
The(cash
Dividendaccount Details
paymentsin credit, arecapitalfrom
based the and
upon
base Financial
the current
Screen shareholder
At
sharethe end
price. and industry confidence
of periods 1 and 2, whilst the falls.
The level of Dividend paid to the shareholders Information investments,
Conversely, ifand
the indicates
value the debt
increases thenburden of
company fromwas the being established,
Consultants Reportthere were no
the company.
confidence will If improve,
there is no and cash account
ongoing
The equityjobs, of and
the hence
company nothe
at share
forward
any time price
margin.is the
The value of the company overdraft,
will increase. the gearing ratio is 0.
The shareoverall price
sharetrend for the
value i.e.,first
the 4number
periodsofhas shares in
The future profitability of the company As
However,
beenIfacirculation
fluctuating
thecangearing
be
successful
seen
one.increases
multiplied
ratio the
tendering
by the the
trend has
in
current period
company
been
price3will
for
per
theendbeof
Summary secured
share. some profitable work, and by the
viewed asfall,
being vulnerable to both interest rate
Theofdebt
Each burden
the 4 factors :- (gearing ratio) of the company value
Wellrises,
now to
the period
look in theadversely
more
and itsinability
forward
detail affecting
margin
at
to serviceandwhy wasindustry
this
its having
debts
standing
has been
from
at a
its
confidence
the case.healthy
There is1,410, the
level421.
a flows. company,
of This dropped
dividend, measured slightly aas ina % of
future
negative profit
affect on Consequently,
the share price, this
as will have a
Dividend payments period
depressing
4.
the equity, at effectwhich on the share
share does not in
indicated
priceConversely,
price.
Changes in company value the Consultants
change. Paying Report.
if the gearing ratio moredecreasesthan the thenequilibrium
the company level
Changes in future profitability The
will fluctuating
cause the changes
share price arerise,
to reflected
but in theless
paying
will be viewed as being more financially sound,
Changes in gearing changes
willthe notinbe
be share industry confidence
well received by the in the company,
shareholders,
and price will increase.
which
and the had priceboth positive
will fall. (dramatic
have different levels of impact upon the company share price. It may be,improvement)
for example, that andthe share price
negative (not helped)
As can be seen, there was no cash account
rises even though 3 of the factors have negative affects, but the positive affects
affect of
Dividend onthe the4th factor
companys hasshare
the price. have been
overdraft inpayments
periods 1-4, of 1.5%
and the of equity
gearing ratio
greatest impact. made each period, and no theaffect
affecton has
rose remained at 0, with thebeenshare
Shareholders are content with the level of
price.
Careful examination is needed of the company data to determine whichdividend factors have paid, hadimplying
which affects,
no change to the share
and to what level. price.
If dividend has had little affect on the share

price, what about other factors ?
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Company Value Glossary
The value of the Company at any time is measured by its assets and liabilities, which
consist of :-
Cash in the bank. This can either be in credit (an asset) or in overdraft (a liability).
There is an overdraft limit.
Capital Base. This is the companys investment in plant, equipment, buildings etc, which
determine the level of work that the company can undertake.
Investments. The companys cash investment in other concerns, which may not be
construction-related.
The value is increased by :-

Generating an operating profit through the companys activities, which goes into the
cash account
Good investments
The value is reduced by :-

Dividend payments to shareholders
Making an operating loss through the companys activities, which comes out of the cash
account
Depreciation of the capital base
Poor investments
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Cash Account Glossary
The Company has one bank account, known as the Cash Account.
The Cash Account can be in two states :-
In Credit, when it is considered an asset

In Overdraft, when it is considered a liability. There is an overdraft limit defined in the
Company and Financial Information.
The Cash Account is increased by :-
The company generating an operating profit

Selling off a % of the capital base
Selling investments
The Cash Account is reduced by :-
Dividend payments to shareholders

The company making an operating loss
Increasing the capital base
Increasing investments
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Dividend Glossary
The dividend paid to shareholders each period is one of the key factors that affects the
share price of the company.
The dividend paid is expressed as a % of the equity of the company.
The equity of the company at any time is the overall share value i.e., the number of shares
in circulation multiplied by the current price per share.
The dividend % of equity can be :-

Insufficient to satisfy the shareholders, which will reduce the share price
Sufficient to satisfy the shareholders, which will have a no effect on the share price
More than sufficient to satisfy the shareholders, which increase the share price
The External Performance Review gives an indication of how the shareholders felt about
the level of dividend paid in a particular period.
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Profit Definitions Glossary
Gross Profit
Gross profit is the difference between measured value and total costs across all jobs
progressed.
It is a measure of how profitable the companys jobs have been.
On some reports, such as the Company profit and Cashflow Report, retentions paid and
withheld by the client are also taken into account.
Operating Profit
Operating profit is gross profit less other company costs/revenues, and is a measure of
the overall profitability of the Company.
The other company costs/revenues are :-
Overheads (cost)
Corporation Tax (cost)
Credit interest from the Cash Account (revenue)
Overdraft interest from the Cash Account (cost)
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The Capital Base Glossary
Defined
The capital base is the companys investment in plant, equipment, buildings etc, which determine the
level of work that the company can undertake.
Increasing
Changes to the capital base are the responsibility of the Financial Manager.
It can be increased from cash reserves in order to support further growth. There are limitations on the
increase possible each period.
The Workload Limitations button on the Bidding Screen gives an indication of when an increase may be
necessary.
Reducing
The capital base can be Reduced to raise cash, which may be desirable if money is needed for other
things, or it is not being fully utilised. There are limitations on the % of the Capital Base that can be
sold off each period.
Depreciation
Each period the Capital Base depreciates by a %, reducing the overall value of the Company. This occurs
at the end of the period.
Measuring Usage
One of the key company performance indicators is Capital Employed, which measures how well the
Capital Base is being utilised over a period of time.
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Investments Glossary
The core business of the Company is procuring and progressing contracts, and if done successfully the
Company will report a healthy operating profit, and increase the Companys value.
However, there are alternative ways of increasing the value of the Company, such as by investing in
other concerns, which may or may not be construction-related. Such investments can :-
Offer a better return than can be obtained from the bank.

Offer a competitive advantage for work in progress e.g., investing enough money in a tarmac company
would reduce build costs for Transport jobs as preferable material rates would be obtained.
Each period a number of new investment opportunities may arise, adding to the list of available
investments, and for each one some key information is given to help in making investment decisions :-
The investment profile describes the concern.
The Past Performance gives the % return given in previous periods to all investors, and details any
money the Company invested, and any build cost savings gained.
There are limitations to any investments made, described in the company and financial information :-
The increase in a single investment each period cannot exceed a given amount, depending upon the size
of the investment concern.
Depending upon the size of the concern, there is a minimum level of investment required to gain build
cost savings, and a minimum potential % saving.
The number of investments that can be held at any one time is fixed.
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Gearing Ratio Glossary
The Gearing Ratio is the ratio of the companys borrowings (cash account overdraft) to its
assets (cash account in credit, capital base and investments), and indicates the debt burden
of the company.
If there is no cash account overdraft, the gearing ratio is 0.
Changes in the Gearing Ratio have an impact on the Company share price :-
If the gearing ratio increases the company will be viewed as being vulnerable to both
interest rate rises, and its ability to service its debts from its future profit flows.
Consequently, this will have a depressing effect on share price.
Conversely, if the gearing ratio decreases then the company will be viewed as being more
financially sound, and the share price will increase.
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Corporation Tax Glossary
Corporation Tax is calculated on the companys Operating Profit each period before tax
and interest (Gross Profit Overheads) each period, less any Capital Allowances accrued by
the company; details of the rate are shown in the company and financial information.
If the company makes an Operating Loss, then no Corporation Tax is paid, and any capital
allowances are carried forward to future periods.
Capital Allowances are acquired by investing in the companys capital base, and are
calculated on a written down basis; the rate of writing down allowances is given in the
company and financial information.
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Calculating Capital Allowances Glossary
Consider the following example where a company

If
Capital isAllowances
in period
an Operating Lossareis6, and
made,
the the
then
result Financial
any Report is
CapitalinAllowances
of investment the
companys
accrued willcapital
be carried
baseforward
i.e., anytoinvestment
future periods.
can be used as tax
being reviewed for period 5. relief to offset the affects of corporation tax.
In period 5 the company invested 421,996 in their capital base.
The Capital Writing Down Allowance (given in the Company &

Financial Information) is 25% per annum, or 6.25% per
period.
In other words 6.25% of the 421,996 could be used as capital

allowance in period 5, or 45,186.
The remaining balance (421,996 45,186) would be similarly

written off in the same way in future periods.
The Company made an Operating Profit before tax & interest of

639,849 in period 5.
Corporation Tax at 28% was paid on the 639,849 less Capital

Allowances of 45,186.
But how was the Capital Allowance figure determined ?

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Interest Rates Glossary
The prevalent interest rates each period are defined in the Company and Financial
Information.
Cash Account interest is earned/paid on the Cash Account balance at the beginning of the
period.
Cash Account Credit Interest Cash Account Overdraft Interest

If the Cash Account is in credit, interest If the Cash Account is overdrawn,
is earned at the annual rate shown. interest is paid at the annual rate shown.
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Overhead Staff Glossary
Overheads are the non-contract based support services required to enable the company
to win and progress work.
They consist of :-
5 key departments; Marketing, Estimating, Head Office, QHSE and Measurement.
Non-departmental overheads, such as idle labour and project managers, who are not
assigned to jobs being progressed.
The staff in each department can be either :-

The companys own staff
Agency staff
and are subject to costs and limitations shown in the company and financial information :-
Costs
Company staff incur an annual salary per person.
Agency staff incur an annual cost per person, which is higher than for company staff.
For new company staff, the recruitment and training cost per person expressed as a %
of the annual salary. Agency staff incur no recruitment/training cost.
Limitations
There is a cap on the number of new company staff that can be employed in a period.
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Market Sectors Glossary
The
All value of work actually prequalified for each period can be obtained from the marketing
Atjobs
Having belong
any point into
identified one
time of
thethe 5 sectors
marketing
market trend,:-department are
the value of ablethe
work to company
:- is able to prequalify
performance analysis.
for depends upon :-
Industrial
Accurately determine the
Building Forecast the future trend of the market, the
The pastand Commercial
marketing effort applied, based upon the number
value of work accuracy of theofdata
staff in the
based department.
upon As
the marketing
Transport
the department
Energyavailable ingrows
each more work can be identified,
sector effort, or up to a point.
number of staff in the department
Water and Sewage
Where the marketing effort is directed. If effort is directed into sectors with no
work, then jobs will not be identified, so it is vital that resources are used as efficiently
It
asispossible.
the role of the marketing department to identify jobs that the company can
prequalify for in each of the sectors.
Whether or not the company are experts in a particular sector. If enough effort is
But how do they
consistently identify
directed in one
into which sectors sector,
particular work will be available
then ?
they will become experts in the
sector, and prequalify for more work than might be expected
The relationship with clients. The company may not be able to prequalify for a job if
the relationship with the client is deteriorating. Conversely, an improving relationship may
secure additional prequalification

The Demo
The market trend for periods 1 to 4 is
on is
accurate, since the data for the past is the
now
screen
The complete to for
market trend advance
the current the demo
readily available. period onwards is a forecast.
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The Job Period Glossary
Close
The
You
The
The
In
Work examination
can
company
company
see
company
period
started now
were
is managed
where
of interested
the the
prequalifed
7 theincompany
period jobover
8,for
putjob
details
andainin
aaperiod
job
the number
bidding
in
bidshows
job becomes
for
of
period
for
was the
thegame
5.the
breakdown
relevant,
Thejob,
completed
job, periods.
jobso
which the
inhadsince
of
wasYou
its estimating
thetakeover
period
costs
aplanned
planned
successful. 1and
manager
of
thelabour
the
duration
duration, management
job
4of 4manning
is
periods.
periods,
period
allocated
actually
in period
by period
finishing period.
resources
5,period
in and8Since
could
of11.the
tothe
be
cost
game,
in
job
the
charge
was
and work
aperiod
until
4-period
in period
period
2 ofjob,
the
6.18,the
job
if your
breakdown
is period
company 9 is
ofgiven
isthe
involved
game
for the
etc.
in both
1 , 2nd
st
the
,
3 Early
rd
and 4andperiods
th
Final Years.
of the job.
During this time a number of jobs will become available in the market, and you will
prequalify, bid for and hopefully win a number of them.
You will begin progressing the jobs won in one of the game periods between 5 and 18,
and the jobs can last from 2 to 5 job periods. It is important then to grasp the concept
of the period of a job, as distinct from the game period.
The following example should illustrate the difference.
Prequalify
for the
job
Estimating
Company bids
resources
successfully
allocated
The job is progressed to completion

Period
5 6 7 8 11
Period 1 of the job . Period 4 of the job

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Job Details Glossary
Job Number Value

Approximate
A unique
The numbercost
anticipated thatof
identifies a job, ranging
the job rounded to thefrom 1 (earliest
nearest million.jobs) onwards.
Period Offered
Complexity
The
How period in the
complex which the company
construction of prequalified for to
the job is likely thebe;
job.
grade as low, medium high complexity.
Type
Description
There
A briefare two typesofofwhat
description job :-
the job entails.
BO (Build Only); traditional type of job where the client is responsible for the design, and the
contractor
Duration is only responsible for the build. A bill of quantities is available to the contractor for use
during the estimating
The duration process.
of the job in periods (2 to 5).
DB (Design and Build); the contractor has responsibility for both the design and build.
Total Labour Manning
Sector
The total number of man periods required to complete the job.
Each job falls into one of 5 market sectors :-
Location and Distance from Head Office
1. Industrial
Where the job is physically located, and its distance (in miles) from the companys head office.
2. Building and Commercial
3. Transport
Client
4.
TheEnergy
public or private-sector organisation for whom the job is being carried out.
5. Water and Sewage
Size
A job can either be small, medium or large, depending upon the value of the job.

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Estimating Accuracy Glossary
InThe
How
How company
period
accurate
accurateis5 the
isthe prequalifies
Estimating
theestimate
estimate?? for a number
Manager mustof jobs as
decide howa result of the effort
much estimating of the
effort to allocate
toMarketing Department.
the following jobs.
The
Theaccuracy
accuracyisisbased
basedupon
uponthe
thenormal
normaldistribution
distributionshown.
shown.
If
IfIfwe theassume
weagain
assumeCompany
that the intends
thattrue
the costs
true costs torepresented
are bid
are for abyjob,
represented 100%, the
thenjob costs need to be determined
by 100%, in order
then
thetoestimate
enable
the estimateagenerated
sensible
generated willbid
will be to be insubmitted.
somewhere
be somewhere the
in shaded
the shadedThis
area, is done by allocating man-weeks
area, of
between
betweenabout
about9599 and
and 105%
101% of of the
the true
true cost.
cost.
estimating time to the job, and enough resources need to be allocated to produce an
Ofaccurate
Of course,
course,the estimate.
theestimate
estimatecould
couldbe
behigher
higherororlower
lowerthan
thanthan
thanthe
thetrue
cost.
true In
cost,
either
butcase,
at least
wewe
dohave
not have
confidence
confidence
that that
it will
it will
be close.
be close.
The Estimating Manager must decide how many man-weeks to allocate, and in doing so
needs to consider two factors :-
The anticipated estimating cost for the size of the job

The additional estimating cost arising from the complexity of the job
If enough estimating effort is allocated an accurate estimate will be produced, but less
than
Aboutthe
95 required effort will
About result in poorer estimates.
105
TheThe
Estimating Manager
Estimating is very
Manager interested
is not in job in
so interested 35, and
job 36, and
decides to allocate 8 weeks of estimating time.
decides to allocate only 3 weeks of estimator time to produce
But About
how 99accurate is an accurate
About 101 estimate, and conversely how inaccurate is a poor
the estimate.
estimate ? Based on the anticipated cost, and allowing for the job
complexity,
7 weeks8are
weeks should be enough
for an time to produce an so the
actually required accurate estimate,
accurate estimate.
estimate will not be accurate.
The following example will demonstrate these points.

The Demo
on is
the
now
screen
complete
to advance the demo
Main Quit
Choosing the right designer Glossary
One
Consider
If of the
the the
keyfollowing
company decisions
wins theexample.
when bidding
job then the for a design
design & build
produced job is the
by Chester choice of the
Consultants should
consultant
ensure significant
to producesaving
the on
design.
the build costs, although they may be charged a slightly
higher
The company
design fee
is submitting
than anticipated.
a bid forHowever,
design & the
buildsavings
job 29,should
a medium-sized
easily outweigh
building
the&
But
additional
commercial
why is the
design
contract.
decision
costs.so important ? Consultant no 5, Crane & Moore Design
Services, have been allocated to produce the
ASome
consultant
of thewho has expertise
anticipated in designing
reduction the type
in build costs due of work
design.in question can produce
to the quality of the design can be
designs
passed that
onto can
the significantly
client by including
reducepart
theof
build
thecosts,
savingwhich
as Their
a negative
incompany
turn can amount
improve
profile in the
indicates the
thaton-
profit
they have
margin
cost, making
on the the
job.bid more competitive. Additional profitawould still be made
lot of experience on the
in the building & job,
since only part of the expected saving is being passed onto the client.
commercial sector, and they appear to be an
ideal choice.
There are a number of consultants available, and there is no restriction on the number of
design
The reduction
& build jobs
in build
a particular
cost possible
consultant
for thecanbest
workpossible
on atThey
any
designer
onealso
have time,
for
beenbut
the
usedfinding
job is shown
before, thewe
and
consultant
in the Company
whoseandexperience
Financial matches
Information.
the type of work iscan not always
look easy.
at their past performance by using
the History button.
Crane & Moore Design Services were used on job 1, and their
expertise reduced the overall build cost on the job by 2.47%, quite
a saving.
Design costs were higher as they charged a higher than average fee,
but the build cost saving would have more than compensated for this.
Clearly Crane & Moore Design Services are worth using again.

The Demo
on is
the
now
screen
complete
to advance the demo
Main Quit
Design Fee Glossary
Whilst tendering for a Design & Build job the company :-
Estimates the likely design costs, based on average designer

Approaches an external consultant to produce the design, should the job be awarded
If the job is won, the consultant completes the design and charges a design fee, which is
payable pro-rata over the planned duration of the job.
The design fee is subject to variation from the original estimate depending upon :-
The accuracy of the original estimate

The expertise of the consultant in the sector of work with which the job is associated.
A top consultant would charge a higher design fee (but save on the build costs), but one
without the required expertise for the job do not charge the full design fee, although
additional build costs can be incurred from inferior designs.
Main Quit
Risk Glossary
AtAs
Letswesuppose
the have seen,
estimating the setting
thestage,
Company of thetorisk
an assessment
decides bidcontingency
wasScenario
made
for the 2:of
Scenario
Consider job.
Full
job 3:
cancontingency
potential
risk
Some
25,
have significant
risk risks occurring
contingency
a small-sized Transport
effects
on a job
contract.
on that
bothcause
could a companys
monetarychances
lossesof to winning a contract,
the company.
Scenario
If theIffull
some and
1:
cost
No subsequent
ofofthe
risk
therisk
contingency
riskcost
is added margins
is added
to the
to the
oncostand
oncost
thencashflows
then
there
there
is less
is a
If no risk contingency is added to the oncost then there is a good
if
If the
thejob
riskisoccurs
awarded
theand progressed.
additional chance
cost incurred fair of
chance
chance could
The job the
is company
of the
have
classified
of the company company
aswinning
serious
having the
winning
Low
winning the job since
affectsthe
risk. job,
their
job since their and
bid
onsome,
thethey
would have
bid would be be
higherpartly
than covered
competitors themselves
who may in case
have the
included
risk occurs. but not full,
The likelihood
cashflow of the
of the risk occurring
Company, unless an(risk level)
allowance The Company and Financial Information reveals that foror
lower
risk is
thanclassified
made
contingency.
their
during
competitorsas None,
the
who Low,
bidding
have Medium
stage
included some
torisk
low-risk
If
High, a job
and is
alsobeing progressed,
expressed as a
provide contingency for the risk.% and risk
chance costs
of are
contingency.
happening.
Since
contracts incurred,
there
there is a
is a the
5-20%
5-20% costs
chance
chance of can
the
the be
risk
risk reduced
occurring,
will occur atit by be
may
some :-
However,
reasonable
ififthey to
are
cover
awarded
20%contract,
the
ofofthe
contract,
therisk cost,
andorthe
28,718.
risk occurs
point
However, during the
they doprogressing
win the job.
and the risk occurs the the

The Employing
severity a good
(cost) ifproject
the
riskriskmanager,
hits who will
is expressed be able to identify and theaddress
additional cost will have been covered, and will not affect the job
the
The contingency for forms part of the Ifas
If itoncost, arisk
%
and ofthere
the estimated
are 3haspossiblebuild cost.
scenarios
additional cost could seriously affect job profits, and :-adversely
margin.If does,
the the
risk there will
occurs,
does be
theacompany
not3.5%
occuraddition
the totofind
margin build
would
thecost,
be or
other
significantly
80% of
potential effects of
for the contingency. the risk. Conversely, employing
affect
improved.
the
the
risk
cashflowa
cost, poor
or
0.035 x 4,102,691 = 143,594
of theproject
114,876,
company.
which manager
eats into the may
margin.
increases the risk costs. However, if the risk does not occur then the 28,718 is
additional margin.
A good labour relations policy, using the companys own labour in preference to
subcontractors and not laying off own labour. Conversely, a poor labour relations policy,
with reliance on subcontractors and laying off own labour, can increase the risk costs.
Having a well-staffed QHSE Dept.
Conversely, risk costs can be increased if the above factors are not adequate.

The Demo
on is
the
now
screen
complete
to advance the demo
Main Quit
Build Cost Glossary
The build cost covers all the labour, plant, material and subcontract costs incurred during
the completion of a job.
During the tendering stage the company estimated the build costs, the degree of
inaccuracy being governed by the amount of effort put into producing the estimate.
However, once the job commences the true build costs are generated, which should be
very close to the estimated costs providing that there is high confidence in the accuracy
of the estimate.
The company never sees the true build cost, although they can be deduced from careful
examination of the job progress report.
The build costs incurred each period depend upon the level of labour allocated to the
site.
Main Quit
Site Staff Cost Glossary
Site costs pay for the support staff and services required to administer a site.
During the tendering stage estimates were made of the level of site cost required for the
job, the degree of inaccuracy being governed by the amount of effort put into producing
the estimate.
Once the job is undertaken the true level of site cost needs to be paid, which should be
close to the estimated cost if there was high confidence in the estimate produced.
Unlike build costs, which are automatically generated by the level of labour used on site,
site costs have to be allocated by the construction manager each period. The level of site
cost should be sufficient to administer the labour allocated to the site.
Paying insufficient site costs can have severe adverse affects on the productivity of the
labour on site, reducing the progress of the job.
Paying additional site cost over and above the required levels can marginally improve the
productivity, but the benefit is offset by the additional cost.
Main Quit
Successful Tendering - 1 Glossary
Based
The
The
ItsCompany
current
periodupon
current
lower 8, Factors
forward
and
and the
forward
upper
the companys
workload
workload
thresholds
company of is
29.2m
has strategy
29.2m,
can
bid comprises
be
and
for if the4for
3raised
jobs. 3for growth,
on-going
bids
the were
current
jobs. Ifaperiod
to be number
the
won 3 the ofwould
by affect bidsbemay
:- be submitted in a
period,
Company
submitted
using morebut
bids growth,
ofarethere
the are
successful,
companysandthe
acash
successful
number
number
reservesof of
to tendering,
factors
on-going
increasejobsthethat
is be
would limited
capital can
base.affect
7, still by :-the companys ability to secure
well
Will
short Job
ofthe
59:
thecompany
8.6m
upper (cumulative
limitbeofable
12. to
workload
support37.8m)winning the 3 jobs, on top of any existing workload ?
the
Using
contracts
Job 60:
cash
8.5mreserves
? in this way
(cumulative workload
is the46.3m)
responsibility of the Financial Manager.
The
Well
However,
Job 61:
use size
in4.8m
future
the of theLimits
(cumulative
periods
Workload companys
the workload
choice capital
of 51.1m)
to find jobs
out. to tenderbase. Clients
for could well be will not accept a bid from the company
affected
These
by if
thethey tendering
on-goingfeel thatfactors
the company
job limitation. fall into does2 categories
not have the :- resources to complete the job.
However, the workload limitations will affect the bidding as follows :-

Company
JobsThe number
59 could factors,
of jobs
be secured such
sinceinthe
as
progress.
the sizeworkload
cumulative If
ofthe
thewould
company
companys has
not exceedcapital
too
the many
base
lower job commitments,
threshold of 38.4m.
clients
Job-specific
If jobs 59 will reject
and 60 factors,
are won,a companys
job 61such asbid
cannot bethebecause
won price submitted
since the they feel that the company upper
cumulative workload would exceed the will not be able
threshold. If the to
lower threshold was exceeded, but not the upper threshold, the job could only be won, price permitting, if the relationship with
manage further contracts efficiently.
the client is at least fairly good, as defined in the Company and Financial Information.
Well look at each set in turn.
The companys capital base of 4.3m can
support future workload :-
Up to 38.4m without any problems

Between 38.4 and 47m if client relationships
are at a particular level
But definitely not beyond 47m.
---------------------------------------------------------------
Key Point
future workload is defined as the companys
current forward workload (before any jobs are
progressed in the period), plus any jobs won in
the period.
Main Quit
Successful Tendering - 2 Glossary
Job-Specific Factors
In the early years the company Client
is always bidding against a computer-simulated rival
High Bidding
Relationship
If the Client
company. does not immediately reject thebidcompanys
If the companys is within bidthe%
too faraabove
certain because
of the
rival rival
bid, of
the company
bid, contractfactors,
thewill
client is
thenHigh
job-specific
Bidding factors may prevent the
reject theto
awarded the Company
companys
company
bid on from
if they
the havebeing
grounds
a betterawarded
of price. the contract.
client relationship than the rival
company.
In the final years the company bids against both the computer-simulated rival company
These canother
and the be summarised as :- are
companies that Theinvolved
companysthe clientfinal years,
relationship so the
is based on acompetition is such
number of factors, far as :-
more fierce.
The price submitted The quality of previous tenders submitted to the client
How well the company has managed previous contracts with the client
The relationship with the job client
In either case there is some competition.
Rival Bid
Consider the following example in the Early Years.
Note that your rivals improve their relationships with each client as each
detail.The rival bid is as
so shown
Well look at them in more period passes, bidding for a job with a client with whom you have not
formed a reasonable relationship might prove unsuccessful if the bids are
very close.
Safe area
Job Secured If the companys bid falls outside the other ranges, then the job will definitely
be won.
Low Bidding
If the companys bid is too far below the rival bid, the client will reject
the companys bid on the grounds of low bidding, believing that the
Low Bidding quality of the work will be undermined because the company cannot
possibly complete the project without cutting costs.
Main Quit
Submitting a Bid for a Job Glossary
The bid (or planned value) to be submitted to the client consists of :-
The margin to be made by the job, expressed as a percentage of the

sum of the Build, Design and Oncost.
Mark-Up It is one of the companys critical decisions because it affects the
jobs gross profit.
The gross profit is required to fund the company related costs not
covered in the individual jobs, such as head office overheads,
increases to the company capital base and paying dividend to
shareholders.
An additional allowance to cover costs not covered by the estimated

build and design costs, which should include :-
On-Cost (+) Site costs
(+) Contingency for Risk
(+) Project Manager Costs
(-) an allowance to represent the anticipated savings on the build
cost due to the design produced by the consultant
As estimated
deduced by theand
estimators. It (D&B
cannot beonly)
altered
Estimated Build The build design costs jobs are determined
during bidding.
by the estimators.
Cost,Design Cost and
Consultant designer
They cannot be altered during bidding.
Main Quit
Mark-Up that may secure a job Glossary
The markup, or margin included in a submitted bid is one of the companys critical decisions
because it affects the jobs gross profit. The gross profits on all jobs are required to fund
the company related costs not covered in the individual jobs, such as company overheads
and dividend payments to shareholders.
Considerable care is required at the bidding stage in coming to a decision on mark-up, and
assuming that the oncosts are set at appropriate levels, what level of mark-up would be
likely to secure a job ?
This information is given in the Company

and Financial Information, by job size.
The mark-up given is the minimum that the computer (rival company) is likely to include in
its bid, and a useful benchmark in the Early Years for setting mark-ups.
However, bear in mind that :-

The level given may not be higher enough to satisfy the long-term profit requirements
of the Company, and a higher level may be needed
In the Final Years other companies, as well as the computer, are bidding for the same
job, and their mark-up strategy is unknown. Indeed, lower margins may be entered to try
and secure work in a more competitive environment.
Main Quit
Rival Bid Glossary
In both the early and final years there is always competition for the available jobs from a computer-
simulated company.
In the early years the computer is the only rival, but in the final years the other competing teams
provide tendering competition, and securing work becomes far harder.
The computer bid has certain characteristics :-
It is based on accurate estimates of build and design costs.
The oncost element includes :-

Sufficient site costs, adequate risk contingency and allowance for a reasonable project manager
(including salary and recruitment charges)
If the job is design & build, then it is assumed that the consultant allocated will produce a design
that reduces the build costs, and some of the reduction is passed onto the client by taking money
off the the oncost. The reduction can be up to 1% of the estimated build cost.
The markup is at least at the level shown in the Company and Financial Information, dependent upon
the size of the job
Bearing in mind these factors the computer bid is always competitive, and acts as a stabilising
influence on the bidding process i.e., bids submitted with markups that are too high will be rejected by
the client in favour of the computer-simulated company. Conversely bids that are much lower than the
computer bid will also be rejected, since the client does not believe you can produce a quality job at
the price suggested.
Main Quit
Forward Workload and Margin Glossary
The forward workload (or potential turnover) on a job is the remaining value to be
recovered from the present time until the job has been completed.
If a job is 40% complete then a further 60% of the jobs value, the submitted bid, has
not not yet been recovered from the client, and forms the forward workload.
In this scenario 60% of the jobs true remaining cost has not been incurred, and the
difference between the remaining value and cost is referred to as the forward margin.
Forward workload and margin are two of the key performance indicators upon which a
companys progress is measured.
Main Quit
Key point for progressing jobs Glossary
Progressing jobs to completion is often a complex task, and the decisions that have to be
made are often the result of the strategies adopted in other areas.
For example, if the company has an aggressive tendering policy, and secures a large
number of profitable new contracts in a particular period, this can cause problems when
it comes to adequately resourcing the new and existing jobs.
More work normally means more labour, and the company may have a significant shortfall
of its own fully-trained labour. This would then require decisions on how to overcome the
shortfall, by taking on new recruits into the companys own direct workforce, or using
subcontractors. An alternative policy may even be to deliberately delay jobs in the short-
term, but this can affect the relationship with the clients.
Some of the key issues are dealt with in the following demos.
Labour used to progress a job

Attempting to complete jobs early
What happens if a job overruns ?
The choice of taking on new recruits or subcontractors to overcome labour shortfalls
The factors that can affect labour relations
Setting varying levels of site administration cost
Main Quit
Labour used to progress a job Glossary
To progress jobs the Construction Manager must allocate labour to the site, and in doing
so there are a number of alternatives available.
Build costs
Both the effective and ineffective labour contribute to the build
The following example should demonstrate
costs. the choices, based upon a job within its planned
Above the overmanning limit
duration. After taking into account the training of new recruits, any labour
As a rough guide, if the effective labour is 30% of the total labour
above the permitted level of overmanning is classed as ineffective
required to complete a job, 30% of the jobs total build costs will be
labour.
Overmanning limit
incurred.
Overmanning Limit Based upon the job sector, and the overmanning limits shown in the
Company
The & Financial
ineffective
Job Progressionlabour incurs Information,
labour costs theonly,
permitted level of effective
which are
labour
incorporated
Its onlythatthecan
in thebebuild
allocated
effective costs.
labour without any detrimental
that contributes affect on performance
to progressing the job.
is as shown.
ThereAs are numerous
a rough guide,other
if the factors
effectivethat can affect
labour is 30%theof overall
the totaljob
labour
The
costs, effective
including
required labour
:-
to complete at this point is the total labour allocated
a job, 30% of the jobs value (original bid) less the
ineffective
should be labour
earnedduefrom to the
thetraining
client. of the companys new recruits.
project manager salary
site administration
However, there are costs
numerous other factors that can affect the
training
measured cost value
for new recruits including :-
recovered,
Planned Labour
risk
Planned Labour The planned
Head
The labour
Office
quality level
and for project
ofQHSE
the theeffort
period was estimated
across
manager theoncompany during
the site
tendering in order to complete a contract
Morale of the companys own labour on time.
The level of site admin allocated
Measurement effort across the company

The Demo
on is
the
now
screen
complete
to advance the demo
Main Quit
Trying to complete a job early Glossary
But
Trying
To
Ifwhat
Consider to
complete happens
acomplete
the job
the planned level ofif38
following athe
job
early thejob,
men Construction
early
which
Construction
was hashas aneeds
number
Manager
a planned
Manager
allocated, the of
duration
to refer
job would attempts
tobenefits
have to
to complete
of sector-based
the 3 periods,
completed verythe
and company,the
is in its
overmanning
early in job
including
final
limits early,
in thebut
planned
given :- is
period.
Company and Financial Information (shown below).
not the able to do
period, with so
the ?following affects (ref: External Performance Review) :-
The
The Job Details
client button
may shows :- for early completion (see below).
For example, consider a pay a
Building bonus
& Commercial job that has a planned duration of 3 periods, and that can be overmanned by
The
up Anplanned
increase % incomplete after
costs as ineffectiveeach period
labour (Procurement
was retained tab).
until the end of period.
This The
to
The
may
35%.companys
Ifoccur
Inefficient if a
own
the Construction
actual %use of work
job labour
is not
Manager
completed
of ineffective that
overmanned
follows
labour to was beingenough,
the overmanning
thatdate
could(Job used
Progress
have been on
or the
ineffective
guidelines,
tab).
used elsewhere. completed
the completionlabour
job can
scheduleresulting
be be
should used
asfrom
on the
follows :-
training
other
Period sites,of new
Planned preventing
recruits
Labour Actualinto
the need
the companys
to take
Labour onworkforce
new recruits,
% overmanning delaysor perhaps
Cumulative theLabour
anticipated
having to progress
use more of the
job.
costly
The subcontractors.
1job was overmanned
57 in its first
77 period to try 35and
% complete the job 77 early, but this strategy was only
The companys
partially
2 adhered to capital
96 assets
in its second 114 (plant,
period due buildings
to staffingetc)
19 % being on
shortfalls used
191 onjobs.
other the job
The can be is that
net result
3 38
Indiverted
thisthe
overall scenario,
elsewhere.
job
--- the job would enter its final planned period ahead of schedule, and the
is ahead of schedule going into the final planned period, and is currently 85.2% complete,
asopposed
Construction
Cashflows to 191
theareplanned
Manager improved % complete
must be very after 2 periods
careful about of setting
80%. the labour level, since the planned
level cannot be relied upon.
The
The Construction
job should complete Manager
a period needs
early, to allocate
securing lessfrom
a bonus than thethe planned level of labour (27 men) in the jobs
client.
final period to enable the job to complete at the end of its final period. If the full 27 men are allocated,
------------------------------------------------------------------------------------------------------------------------------------------------------------------------
the job will complete before the end of the period, and additional labour costs will be incurred until the
Key Point
period end.
Overmanning above the limits results in ineffective labour that does not contribute to the progress of the job, but incurs labour
costs.
Since there is 15% of the job left to complete, the labour level required is 15% of the total labour (135),
or 21 men (rounded up), well short of the planned level of 27.
Early completion of a job means completing at least one period before the end of the planned duration
e.g., if the planned duration is 4 periods, it must be completed in 3 periods or less to obtain the client bonus.
The bonus paid by the client varies depending upon the job size.

The Demo
on is
the
now
screen
complete
to advance the demo
Main Quit
What happens if a job overruns ? Glossary
Consider
Ideally
The JoballDetails
the
jobs
following
progressed
buttonexample.
will:-be completed either early or on time.
shows
The relationship with the client will also have been
affected by the late completion of the job.
Job
However,
The5,planned
planned
if a job
%tocomplete
is
bebadly
a 2-period
managed
after job,each ithas
mayoverrun
period well overrun,
into itswhich
(Procurement third has
tab).period.
several affects :-
In this particular example, the relationship with Railline
The actual % of work completedhas deterioratedto to
date (Job
a poor Progress
one as a results oftab).
Once the period has been
completing
There
A penalty
are currently
will be incurred
53 men on
fromsite,
the but
client
with for
no late
plannedcompletion,
labour asexpressed
a guide,
job 31 late, and it will be hard to procure any furthercompleted,
work the jobwhatas a level
% of of
progress the
tender
labour
The jobisvalue
isrequired
for each
currently to 94.7%
complete
period the
thejob
withcomplete,
the client.joboverruns.
thishas
and periodThis ? can have report
overrun. a severe
showsaffect on the
the penalty
incurred for late completion.
companys cash account, and value.
Resources
There is 5.3%willof be
theneeded
job left totocomplete
complete, theequating
job (labour,to 7.2 project manager,
men (0.053 x 135).site admin),
diverting them from elsewhere.
ToIt
reflects
ensure the badly on the industrys
job completes perception
well allocate 8 men,of andthe company, reflected
appropriate site cost to in the
support
contract
them. completion and client satisfaction key performance indicators used to measure
the progress of the company.
If a job overruns you can allocate as much labour as is required to complete the job, and
If
theanormal
job overruns, it is imperative
overmanning rules do not that the since
apply, Construction
there isManager
no planned allocates
labour as enough labour
a guide.
to complete the job in its first overrunning period.

The Demo
on is
the
now
screen
complete
to advance the demo
Main Quit
Own v Subcontract Labour Glossary
Clearly
In progressing
the decision
Subcontractors
New
Key Point
Recruits: jobs
Training
Site
HiddenCost as
Cost
Costsit to
is always
whether fartomoreemploy cost-effective
new recruitsto oruseusethe subcontractors
companys own is fully-
complex,
trained operatives
and
Subcontractors
A
Even
As
Where
new
well
though
recruit
there
as the
is
the
needsinvolves
training
an
do
new
overall
not since
torecruit
and
need ismany
be labour
trained
site
to be
beingsubcontractors
costs, factors
shortfall
in
trained,
their
trained,
there
first
inand
are
the
andand
period
are
also
period,
isfully
notcosts,
awith :-
number
the ofincluding
effective
effective
the
decision
Company,
from
on
hidden
as
site,
day
to
and
costs
site :-
whether
one.
as
costs
that
a result
to
are
still
employ
hard
need
thereto
to
new
isquantify
be
anrecruits
paid
associated
:-
to cover
or useon
training
them subcontractors
cost.
the job they are is further
allocated complicated
to. by the limit on the number of new recruits that can be
However,
taken
The training
on inthey
a period,
time
do incur
could
asan
defined
extend
additional
in
thetheplanned
subcontract
Company contract
premium,
and time
Financial
resulting
shown Information.
ininthe
penalty
Company
charges,
The limit
andalthough
can
Financial
vary each
this
Information.
could be offset
by The
Cost
Using
Site costs
period. time
allocating more
information
per it in
man
labour than
takes
the
period
levels own
to
Company
vary
above train
labour
from
the new
job torecruits,
& planned
Financial job,
Information
ones.but tend andtothecost
be traininginvolved.
cheaper cost
in per
sectors
new recruit
that are is more
calculated
labour as
In The
Reliance
follows
intensive,
this :-site
example
such costs
on
the subcontractors
thethat
as premium isneed
Transport 3,500 to period
Sector
per be
canpaidaffectwhilst
for each thepeople
moraleare
Subcontractor of being
used. the companys
trained. own labour
Eventually own labour may need to be paid off when work dries up, incurring additional labour payoff charges. The
The additional cost of employing subcontractors.
---------------------------------------------------------------------------------------------------------------------------------------------------------
In The
the example
laying training
off of own time
shown,
is 2the
labour weeks
may site
thencost per man
impact periodrelations,
on labour is 11,575.affecting
The costthe permorale
week isand965 (11,575/12).
productivity For workforce
of the the 2
KeyThe
weeks
across
ThePoint anticipated
training
the company.
cost
for a per
newweekduration
recruit,
is 577
the costof a
(training contract.
is 1,930.
cost per annum / 52)
However,
The
How many
Thesubcontractor
training if periods
there issubcontractors
cost premium
is 1,154 is
(2an overall labour
the
x 577)
same regardless need
onshortfall
theto
job be
upon employed
that
whichthe
they Construction
for.
are used. Manager needs to
address,
The affect two of options
using are subcontractors
available :- on the morale of the companys own labour, which is
---------------------------------------------------------------------------------------------------------------------------------------------------------
covered
Key Point in another demo.
Take-on
The training cost new
is therecruits,
same regardless adding tojobthe
of the upon companys
which the new own labour
recruit is used.
However,
Use subcontractors
it is worth taking the time to determine the most cost-effective approach,
which is often job-dependant, as this can affect the profitability of a contract.
But which option is the most cost-effective ?
In
Togeneral,
answer in
this
thequestion
short-term
we need
the to
choice
compare
can vary,
the costs
but ininvolved
the long-term
in taking
the
oncontinued
one new use
of
recruit
subcontractors
against onewill
subcontractor.
almost certainly prove more costly than taking on and training new
staff, since the subcontract premium has to be paid every period.

The Demo
on is
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now
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Main Quit
Labour Relations Glossary
In
AsThe
178 any
wemost
men period
have
were a Companys
cost-effective
seen,
available the
in Example
the moraletotal
way oflabour
Example
(and 1: affect
good
managing force
productivity)
2:
The poor labour
consists
the
of labour
relations
labour of
ofrelations :-in
force inisaction
theconstruction
the companys companys action
to use the
own labour
management
companys
can
All be
178on
decisions idle own
labour
labour
fully
idle
influencedtrained
labour pool, andlabour,
by
none
:- rather thanrelations
subcontractors. transferred
is reflected in comments in the External Performance Review.to site.
were laid off. Indeed, all 178
Men
178 in
men were the IdleinLabour
available the idle Pool (Own Labour)
For
men
Men
labour example,
were
The %
onAll
pool. 5 theif
used on On-Going
of 50
were companys
On-Going men
Jobs
laid off whenare transferred
own
(Own labour
Labour+ that toisthelaididle
Subcontract offlabour
Labour) pool from job A, then they are
jobs.
immediately
they could have been used on on
utilised job B. No training is required, no men are laid off, and the company
The % of subcontractors used
jobs.
doesperiod
not incur
Each theany additional Manager
Construction costs such asto
has subcontractor
decide how bestpremiums.
to manipulate the labour
If
Inthe
force incompanys
this own
order to the
scenario labourthe
progress
company iswould
more productive,
on-going
be jobs.
perceivedjobs will be
to have progressed
a good quicker, with
labour relations policy,
reduced
and the costs.
moraleConversely, a moreown
of the companys unproductive workforce
labour would be high,will delay greater
ensuring the progress of jobs,
productivity.
and
The result
optionsinavailable
higher costs.
include :-
44 men were laid off from site,
Nowhen
men they
werecould
laid off frombeen
have site.
utilised on other jobs.
For
Thethe Companys
least Own Labour
cost-effective way of managing the labour force is to be constantly hiring and
In either
Laying
laying case,
men
off, off
and the Construction
from
also the Idle
relying Manager
Labour must
Pool
on subcontractors. constantly review the actual progress of
(ILP)
jobs against planned
Transferring levelsthe
men from in order
ILP totojobs,
ensure that the
or from jobslabour
to theallocations
ILP are as required
For
each example,
period.
Taking if a high proportion of the companys own labour
on new recruits onto jobs or laying off labour from jobs is laid off in a period, then
the morale of the remaining own labour (not subcontractors) would be weakened, leading
to reduced
For productivity.
Subcontract Labour In this case the Company would have a poor labour relations
policy.
Taking on or releasing subcontractors
The Construction Manager was able to manipulate the labour force so that :-
The Construction Manager did not manipulate the labour force effectively, and :-
Well
Nonenowof thelook at more
companys detailed
own labour examples
was laid off that illustrate good and bad labour relations.
51 subcontractors were used.
No subcontractors were used
Used 51 subcontracts when men were available in the idle pool, but were paid off
Alloff
idle44labour was redeployed towhom
site could have been used instead of No subcontractors were used.
Laid men from site, some of
subcontractors
The Demo
on is
the
now
screen
complete
to advance the demo
This is an example of good labour relations, and the productivity of the
companys
This own labour
is an example would
of poor be improved.
labour relations, and the productivity of the companys own
labour would be adversely affected.
Main Quit
Different levels of Site Administration Glossary
Allocating
This
Its
Thisperiod
time,
time,the
7,enough
noand
site
actual
themoney
cost
site for Site
Construction
is cost
allocated Administration
allocation
Manager
in an was
attempt
made issave
458,680,
to
the crucial
labour
20% to
money.keep
above thea required
allocationsjob progressing
shown below as the
level. for
productively
companys as possible.
on-going jobs.
The
Theaffects
affectsthis
thistime
timewere
are all
:- negative :-
Well concentrate on job 5, which is in its final planned period
onAtthe95.4%
positive
complete,
side,
The alternatives, boththe
the
of job
job still
whichhasare
not
completed
cancompletedon schedule.
adversely onaffect
time a job, are two-fold :-
The required level of site cost to support the 65 men on site is 382241. This was allocated.
On
Gross
the profit
negative
is down
side, from
and
Paying far too much site more
329,957
cost. worryingly,
This to only
may gross
167,541,
improve profit
siteandwas
further
downanalysis
from
productivity, and 329,957
a would
job mayshow
tobe that
The
258,295
aslightly
minimum
job progress
as level
a direct
ahead of
ofdetails
site
result
cost
for
schedule. ofHowever,
was
the
theperiod
incurred
increased
reveal
the tosite
keep
that
benefitscosts
the
:-
aresite
faroperational
outweighed by the increased
costs,
This
AThe and productivity
healthy can
situation
site gross seriously
would profit
becomeaffect
is
of muchprofit
much
329,957
lower
worse
wasthan
as
made
the
it should
% of additional
have been,site
andcost
labour
increased,
resources
showing
have
that
been the
wasted
Not cost far
paying outweighs
enough the benefits.
The job completed onsite cost.
schedule This reduces site productivity, puts a job behind schedule,
and results
This situationinisinefficient
as serioususe of the labour
as wasting moneyresources
on paying available
too much site cost.
There appear to be no problems with the job.
Well now demonstrate the scenarios outlined.

The Demo the screen
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Main Quit
Job Costs Glossary
The total cost accrued on a job in a particular period can include :-
Design fees
Build costs
Site staff costs
Risk costs if the risk has occurred
Penalty for late completion
Training of new recruits
Labour payoffs
Subcontractor premiums
Agency project manager costs
Project manager salary, recruitment charge, payoff cost, bonus
Main Quit
Labour Costs Glossary
The labour costs relate to costs incurred on or off site. Each one is shown in the
company and financial information
On/Off site costs
On-site costs
Labour payoff rate
Subcontract premium
This is the cost per person of
Subcontractors are 100% productive as soon as they
laying off the Companys own
are taken on by the Construction Manager, and require
labour from either :-
no training. However, using them incurs an additional
cost above the normal labour cost.
The Idle Labour Pool
An On-Going Job
On-site costs Off-site costs
Training costs Annual cost of idle labour

A new recruit needs to be trained in their first period This is the cost of keeping someone idle for a
with the Company, and as a result there is an associated year, and takes into account the redeployment
training time and cost. of the person in other areas.
Main Quit
Penalty for Late Completion of a Job Glossary
If the duration of a job exceeds its planned duration, the company is charged a penalty
for each late period.
The penalty is a percentage of the total planned value (bid entered) for the job; details
are given in the company and financial information.
As well as the monetary cost of completing a job late, there is a serious affect on the
relationship with the client, which is reflected in the overall client satisfaction
performance indicator.
Main Quit
Retention Glossary
Retention is a percentage of the measured value (turnover) achieved on a job in a period

that is retained by the client, until the job is completed.
It is repaid in two equal instalments, in the period when the job is completed and two
periods later.
Details of the percentage retained are shown in the company and financial information.
Main Quit
Percentage of a job completed Glossary
The jobAhas
jobjustwas awarded
completed its 1st with
period,the following
and has bidding
three periods details.on time.
left to complete
The Job Progress screen shows that after 1 period of the job the total value to date is 3,547,934.
This equates to 34.4% of the bid i.e.,
(3,547,934 / 10,291,950) * 100
However, the % complete shown is 34.5%, so why is there a difference ?
The % complete is derived from the Actual amount of the job completed to date.
However, the companys measurement effort has secured an extra 0.1% of value over the period, which is
incorporated in the total value.
The job was won with a bid of 10,291,950

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Main Quit
Measured Value (Turnover) Glossary
For each job awarded to the company, there is a planned value per man period based upon :-
Bid (planned value) submitted by the company / Planned labour manning (number of man-
periods, to complete the job in the planned duration)
Each period, three values are calculated for a job :-
Expected value is the labour on site that contributes to progressing the job (effective
labour) multiplied by the planned value per man period
Actual value is the expected value adjusted to take into account a number of factors
that affect productivity on the job :-
The performance of the project manager allocated to the job
The level of site support (site cost allocated)
The labour relations policy of the company
Measured Value (Turnover) is the actual value adjusted by the measurement effort of
the company for the period.
The measurement effort depends upon how well the companys measurement staff are able
to cope with the turnover in the period across all jobs. The last period of the history
provides the benchmark for determining the appropriate level of staff required.
Main Quit
Bonus for Early Completion of a Job Glossary
The client pays a bonus for early completion of a job.
Early completion of a job means completing at least one period before the end of the
planned duration e.g., if the planned duration is 4 periods, it must be completed in 3
periods or less to obtain the client bonus.
The bonus varies depending upon the size of the job, and is expressed as a percentage of
the tender value (bid entered) for the job; details are given in the company and financial
information.
Main Quit
CFI - Financial Glossary
Main Quit
CFI - Overheads Glossary
Main Quit
CFI - Procurement Glossary
Main Quit
CFI - Construction Glossary
Main Quit
Project Manager Information Glossary
Weighting (never seen)

A unique number that identifies a project
A factor between 1 and 10 that measures performance in each market sector.
manager, ranging from 1 onwards.
This is adjusted further by a number of other factors (time with the company, bonus payments,
taking over from another, job distance from the companys head office) to determine overall
performance on a particular job in a period. Personal and professional qualifications.
Recruitment, Payoff and Relocation charges

Project managers can be :- The annual salary includes wages,
Recruited into the company company car, expenses etc.
Paid off from the company
Moved from job to job within the company A guide to the cash incentive that
may be required to secure the
Each action attracts a cost expressed as a % of annual salary; details are given in the
services company
of the and
project manager.
financial information.
Bonus
A bonus may be paid to the Project Manager on a job, expressed as a % of the salary paid in the
period. This is a one-off payment that does not change the current salary level.
The payment of a bonus will improve performance in the period in which the bonus is paid.
Good project managers who are not paid a regular bonus may resign due to dissatisfaction, and can also
be poached by rival companies. A project manager who has resigned cannot be reappointed by the
company for 2 periods.
Agency Staff Work and personal details to help

Agency staff may be used if the services ofidentify
a particular
suitabilityproject manager
for a particular typecannot
of be secured e.g., if not
Keep Clicking
enough cash incentive is offered.Anywhere
The project
Agency Demo on is the now screen
complete to advance the demo
work. managers incur a cost above normal salary levels, and
their performance is average.
Main Quit
Project Managers Performance - 1 Glossary
The
Project
Well
Project
take
managers
aManager
look at
are
the
History
concerned
factors
indicates
that
withhave
the
howoverall
contributed
well the
planning
project
to Freshwaters
and manager
co-ordination
hasexcellent
managed
of a project
overall
the
companys
from inception
performance
jobs,
level.
and
to completion
shows :- aimed at meeting Tthe clients
Bacon requirements
has managed and
jobs 4, 29 and ensuring
40 since
completion on time, within cost and to the required
period quality standards.
5, all Building & Commercial contracts, and
The basic performance; based on the projecthas managers profile
a excellent basic and overall performance level
for each period.
The overall performance, taking into account a number of performance factors
But how do we know the affect a project manager has had on the performance of the
companys jobs ?

Main Quit
Project Managers Performance - 2 Glossary
Good
Bonus
Time with
Distance project
the Company
from managersHead
the Companys that are not consistently given a reasonable bonus may not only
Office
TheTaking
The over
performance
longer a from
project
of another
the
manager
projectproject
works
managermanager
for can
the Company,
be improved thefor
better
the current
the performance,
period onlyas
by paying aproject
bonus, which isespecially
a % of
To
theresign
The summarise,
distance
Taking
they
salary
gain because
over
for
of the job
from
experience
the the
they
frommain
another
period. do
the
project
and knowledge not
factor
companys
manager feel that
canthey
head affects
are
office
impair
can being
alsoa
performance.
and how the company operates. project
adequately
affect the
The managers
rewarded,
performance
previous performance
of the
project manager but they
manager,
will have is
may
workedthebePast
differently,
those without the necessary experience..
experience
and there willby
poached bein
another
the job
a period of company,
sector. Better
adjustment. regardless of anyare
project managers bonuses paid.
not affected so much.
An
We average
can seeofthat
7%Freshwater
bonus
washas126has
beenbeen
paid with
tothe
Bacon,
the Company
and this 5has
periods,
significantly
and over improved
that andperformance.
Job 50, for example, miles from companys head office, a fair distance, this marginally deteriorated
There
time washas
there a marginal
been an deteriorationininperformance
improvement Period 5 when dueBacon
to took overgained.
experience Job 4 from another manager.
There
performance.
Other are for
reasons additional
paying a bonusfactors
? that can improve performance :-
Time
Paying spent
a bonus with
to good themanagers
project Company will prevent them from resigning. Its the average bonus over all the periods a
Bonus payments
Project Manager has been on a particular job that governs resignations due to disaffection, so its possible to pay a large
Profile
bonus in one period, and none in another period.
Bacons basic performance is very good because of an excellent
and others that can deteriorate performance :- in the Transport sector.
track record
A good project manager, one with the relevant experience for a
Distance of the job from the companysparticular
head office
job, will produce more output from the resources
Taking over available, while a poor project manager will impair contract
from another project manager
efficiency.
Although these can be graded from None to Dramatic for affect, none of them has
anything like the impact as the past experience.
The experience/performance of the project manager can be gauged from :-
Their profile
Their career history with the company

Main Quit
Consultant Details Glossary
Number
A unique number that identifies the consultant, ranging from 1 onwards.
Experience
Company profile which highlights the sectors of expertise of the consultant.
The choice of consultant can impact on both the build and design costs.
Consultants with the appropriate expertise for a particular design and build job will
produce designs that save on the build cost, but they charge more for the design.
The saving in build cost that can be obtained by using the best possible consultant is
defined in the Company and Financial Information.
Consultants with insufficient experience will produce designs that result in higher
than anticipated build costs, although they may be cheaper. However, the savings on
the design cost are no compensation for the higher build costs.
Weighting
A factor between 1 and 5 that measures the experience of the consultant in each
market sector, based on the profile.
Main Quit
Idle Staff Glossary
Idle Labour Pool

Contains the companys own fully-trained workers who are not currently allocated to a job.
Labour can reside in the pool for a number of reasons :-
They may have been deliberately transferred there by the construction manager, and not
reallocated to site
Own labour is automatically transferred to the pool upon completion of a job
It is always more cost-effective to keep the idle labour pool as low as possible, using the
companys own fully-trained staff on contracts that are in progress.
Idle Project Manager Pool

Contains the companys project managers who are currently not allocated to a job.
Project managers can reside in the pool for a number of reasons :-
They may have been deliberately recruited by the personnel manager prior to being used
on site, perhaps to prevent other companies from employing them (final years)
Project Managers are automatically transferred to the pool upon completion of a job
Main Quit
Forming Relationships with Clients Glossary
InEach period
this example, a company
Consider
the number of
theappearsjobs
followingare
to havejobaavailable in the
for relationship
good which market.
thewith NationalThe
company has companys
prequalified.
Transport marketing
based upon :-
effort will determine how many of the jobs the company prequalify for.
The client relationships button (from the main menu) details in words the
Producing good estimates for jobs 20, 33 andtype
78of relationship
(Extremely theestimating
high company confidence)
has with all clients.
Competitive bidding for jobs 20 and 33
Each job job
Completing has20 aonclient,
time, andinmanaging
either itthe public
Clearly, or private
the project
well (good relationship sector,
with and
manager the South for whom
Wales
site support) the work
County Council is to
is currently
be carried
Completing jobout. extremely good.
33 early, and managing it well (good project manager and site support)
The client is South Wales County Council.
But how can the assumed good relationship be verified ?
As the company tenders for and secures work with
the client a relationship is built up between the two
parties, which can analysed using the client history
button.
The company can influence this relationship in a

number of ways :-
But why is the relationship with the client so important ? positively by :-

Submitting a good tender
Completing
If two companies submit very similar bids for a job company with the the jobwith
best relationship on time
the client is awarded the
contract
negatively by :-
The companys relationships with ALL clients forms one of the key performance
Submitting anindicators
uncompetitive
upon(poor)
whichbid
thefor a job of
progress
the company is measured Managing the job poorly, and completing late
The company may not be able to prequalify for work with a client The Client History button gives a detailed analysis
if the relationship has deteriorated
of the factors affecting the companys relationship with
the client.

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Main Quit
Performance Indicator Definitions Glossary
Turnover
Contract Completion Rate
Value accrued across all jobs progressed.
A measure of the number of jobs
completed early, on time or late.
Gross Profit to Turnover ratio
The ratio of gross profit to turnover across Forward Workload
all jobs progressed; a measure of how
The anticipated remaining workload
profitable the companys jobs have been.
(turnover/value) on jobs still in progress.
Operating Profit to Turnover ratio

Future Margin
The ratio of operating profit to turnover; a
The anticipated profit remaining on jobs
measure of how profitable the company is
still in progress.
after taking into account all operating
factors.
Share Price
Company Value Current market share price.
A measure of the assets of the company.
Client Satisfaction
Capital Employed A measure of how happy the companys
clients are; based on tendering and job
Measures how much of the companys Capital
progression.
Base is being utilised.
Main Quit
Calculating Performance Indicators Glossary
The weighting for each indicator at the end of a period is based on a comparison with the
position at the end of the History year, and there are two types of comparison :-
Trend comparison
Smoothes the calculations over the time the company has been operating.
Applies to Turnover, Gross Profit to Turnover ratio, Operating Profit to Turnover ratio,
Capital Employed, Contract Completion Rate and Client Satisfaction.
Snapshot comparison
Compares the current indicator to the position at the end of the History.
Applies to Company Value, Forward Workload, Forward Margin and Share Price.
Click on the hotspots below for more information about how each indicator is calculated at
the end of period 8.
Main Quit
Calculating PIs - Turnover Glossary
Weexamining
By now needtheto determine what has
Financial Report we happened
first toisturnover
determine
The Company the
now in
up to thewas
turnover
period
endtheof
9, but how(measured
period
value)8.for
Turnover
the History Year (periods 1-4). indicator value of 259 calculated at the end of period 8 ?
The cumulative turnover (measured value) for all 8 periods the company has been
operating
The totals
Historical 56,450,950.
turnover is 8,734,433, and serves as the benchmark for any changes in
turnover in future periods.
To compare fairly this with the Historical benchmark of 8,734,433, which is based upon
one year,
The we need
turnover to work
indicator out theofaverage
weighting 80 at theperend year,of which is 28,225,475
the History (56,450,950 /
is the Performance
2).
indicator benchmark.
The yearly average by the end of period 8 was 3.23 times the value at the end of the
History.
History Year
The turnover (measured value) was :-
This improvement is reflected in a rise in the turnover performance indicator from 80,
the initial weighting, to 259 (80 x 3.23). Period 1: 0
Period 2: 0
Period 3: 0
Period 4: 8,734,433
--------------------
8,734,433

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Main Quit
Calculating PIs Gross Profit to Turnover ratio Glossary
Weexamining
By now needthe
to determine what has
first toisthe
determine
The Company ratio
the
now in up to how
turnover
period 9, but the endtheof
(measured
was period
Gross Profit8.
value) and
to
gross profit values for the History Year (periods
Turnover 1-4).
indicator value of 97 calculated at the end of period 8 ?
For all 8 periods the company has been operating the values were :-
The Historical turnover was 8,734,433
Turnover
The
(measured
Historical value) of
gross profit 56,450,950
407,200
Gross Profit of 3,401,393
The historical gross profit to turnover ratio was .0466 (407,200 / 8,734,433) and serves
The
as gross
the profit to
benchmark turnover
for ratio in
any changes was 0.0603.
the ratio in future periods.
The gross
The ratio at the end of period
profit/turnover 8 wasweighting
indicator 1.29 (0.0603 / 0.0466)
of 75 times
at the end the History
of the value at isthe
theend of
the History. indicator benchmark.
Performance
This improvement is reflected in a rise in the gross History

profitYear
to turnover performance
The values were :-
indicator from 97, the initial weighting, to 105 (75 x 1.29).
Turnover Gross Profit
Period 1: 0 0
Period 2: 0 0
Period 3: 0 0
Period 4: 8,734,433 407,200
---------- --------
8,734,433 407,200

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on is
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now
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Main Quit
Calculating PIs Operating Profit to Turnover ratio Glossary
Weexamining
By now needtheto determine what has
first toisthe
determine
The Company ratio
the
now in up to how
turnover
period 9, but the end theof
(measured
was period
value)
Operating 8.andto
Profit
operating profit values for the HistoryTurnover
Year (periods 1-4).
indicator value of 273 calculated at the end of period 8 ?
For all 8 periods the company had been operating the values were :-
The Historical turnover was 8,734,433
Turnover
The
(measured
Historical value) of
gross profit 56,450,950
58,474
Operating Profit of 1,720,915
The historical operating profit to turnover ratio was 0.0067 (58,474 / 8,734,433) and
The operating
serves profit to turnover
as the benchmark ratio wasin0.034,
for any changes which
the ratio we must
in future now compare to the
periods.
ABSOLUTE (or MODULUS) historical one of 0.0067
The operating profit/turnover indicator weighting of 60 at the end of the History is the
The ratio at the
performance end ofbenchmark.
indicator period 8 was 4.55 times the value at the end of the History.
This improvement is reflected in a rise in the operating

Historyprofit
Year to turnover performance
The values were :-
indicator from 60, the initial weighting, to 273 (60 x 4.55).
Turnover Operating Profit
Period 1: 0 -35,770
Period 2: 0 -66,265
Period 3: 0 -40,428
Period 4: 8,734,433 200,937
---------- -------
8,734,433 58,474

The Demo
on is
the
now
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complete
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Main Quit
Calculating PIs Company Value Glossary
By the end of period 8 the company value was 6,040,712.

The Company is now in period 9, but how was the Company Value
By examining
indicator 154 calculated theofFinancial
at the end period 8 Report
? we first
The value at the end of period 8 was 1.28 times thedetermine
value atthethe company value at the end of the
end of the History
History Year, which was 4,707,343
(4,714,302 / 4,574,778).
This slight improvement was reflected in a rise in the company value performance indicator
from 120, the initial weighting, to 154 (120 x 1.28).

The Demo
on is
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now
screen
complete
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Calculating PIs Capital Employed Glossary
By
At examining
Thethe the
end isofnow
Company inFinancial
period 8 9,
period thebutReport
average
how wecapital
first determine theperiod
employed per average capital
was 54 %.employed per
period
was the during the History
Capital Employed Year
indicator of (periods 1-4).
214 calculated at the end of period 8 ?
The value at the end of period 8 was 2.14 times the value at the end of the History (54 /
This
25.3).equates to 25.3 % (101 / 4), and serves as the benchmark for any changes in the
average in future periods.
The improvement was reflected in a rise in the company value performance indicator from
The
100,capital employed
the initial indicator
weighting, to 214 weighting of 100 at the end of the History is the
(100 x 2.14).
performance indicator benchmark.
Definition
After Bids have been processed, the workload of the company as a % of the upper
threshold of workload that can be undertaken, based upon the companys capital base, is
defined as the capital employed.
History Year
The capital employed figures were :-
Capital Employed
Period 1: 0 %
Period 2: 0 %
Period 3: 45 %
Period 4: 56 %
-----
101 %
The Demo
on is
the
now
screen
complete
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Main Quit
Calculating PIs Contract Completion Glossary
The Company is now in period 9, but how was the

Contract Completion indicator of 200 calculated at
the end of period 8 ?
By examining the Performance Statistics we first determine the

number of jobs completed since the History, and then give them a
weighting :-
Early: 2 jobs x 15 = 30
On Time: 5 jobs x 10 = 50
Late: 0 jobs x 20 = 0
---
80
The total calculated is added to the initial indicator weighting at the end of
the History, 120, to give an indicator of 200 (120 + 80) at the end of
period 8.
Notes
Jobs that are complete late incur a bigger penalty than the gain from
jobs completing early.
The multiplication factors of 15, 10 and 20 may vary for other games.
No jobs can be completed during the History

The Demo
on is
the
now
screen
complete
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Main Quit
Calculating PIs Forward Workload and Margin Glossary
By the
Theend of period
Company is now in8period
the 9,values
but howwere :- Forward
were the
Workload and Margin indicators of 166 and 224 respectively By examining the Financial Report we first determine
calculated at the end of period 8 ? the forward workload and margin values at the end of
Forward Workload of 35,699,384 (2.07 times the valueYear
the History at :-the end of the History)
Forward Margin of 1,738,010 (1.87 times the value at the end of the History)
Forward Workload was 17,253,292
Forward Margin was 930,270
The improvements were reflected in a rise in the performance indicators :-
For forward workload from 80, the initial weighting, to 166 (80 x 2.07)
For forward margin from 120, the initial weighting, to 224 (120 x 1.87)

The Demo
on is
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now
screen
complete
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Calculating PIs Share Price Glossary
ByThe
the end of
Company period
is now 8 the
in period 9, butshare price
how was wasPrice
the Share 1.71.
indicator of 205 calculated at the end of period 8 ? By examining the Financial Report we first determine
the share price value at the end of the History Year,
The value at the end of period 8 was 1.71 times the value
which at the end of the History (1.71
was 1.00. /
1.00).
This slight improvement was reflected in a rise in the company value performance indicator
from 120, the initial weighting, to 205 (120 x 1.71).

The Demo
on is
the
now
screen
complete
to advance the demo
Main Quit
Calculating PIs Client Satisfaction Glossary
Although
The Company theis factors use
now in period in calculating
9, but theSatisfaction
how was the Client client satisfaction values are hidden, the
relative affects,
indicator of from
249 calculated largest
at the to smallest
end of period 8? are :-
Job Progression
Procurement (estimating and bidding)
Prequalification
To gain a feel for the relationship with each client, a textual

description is given.
The description is based upon a numerical value determined by a

number of factors :-
Prequalifying for jobs with the client

How well jobs were costed
How competitive the submitted bids were
How well the jobs were managed
The sum of the numerical values across all clients is calculated for
the relationship changes since the History, and then added to the
performance indicator weighting at the end of the History.
In this example the numerical value during periods 5-8 came to 124.
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This was added to the Historical client satisfaction indicator of 125 to
give an indicator of 249 at the end of period 8.
Main Quit
EPR - Further Information Glossary
The
The external
External consultant
Performance madeReview
a unclassified
report comment
gives brief relating
details to any
of Sitepoints
Cost paid
that on job 41 in
the
A detailed
period 7, for explanation
which further of the external
information consultants
is brief comment is given, and a pointer
external
The
to
external
where management
management
even more consultant
consultant has made
information feels
is areavailable.
a number ofimportant, most of which need no further
available.
comments in relation to the construction management decisions in
explanation.
The more
period 7. detailed explanation can be viewed by clicking on the Further Information button.
However,
But how do wesome
know ifof
thethe points
comments areneed
good orelaborating
bad ? upon, and further information is provided
in such cases.
The answer lies in the nature which is either :-
P if the comment is positive
N if the comment is negative
U if the comment is unclassified

The Demo the screen
complete
Main Quit
The Use of Company Performance Statistics Glossary
Consider the performance indicators of the company after 7 periods.

In the History year the average job profit was 5.0% (of cost).
During the Early Years the company have During the early years, up to the end of period 7, 9.2% profit
tried to invest in other concerns that was accrued, which explains the rise in the gross profit to
provide :- turnover ratio.
A better return than the bank. ---------------------------------------------------------------------------------

Reduce overall build costs in jobs in Key Point
progress e.g., by obtaining better discounts The performance statistics cover the early years and the
on material purchases. history separately, but many of the performance indicators
take into account the full lifecycle of the company. These are
Has the strategy paid off ? specifically the trend-based ones such as turnover, gross
profit to turnover etc.
The performance statistics provide evidence
that it has.
The Contract Completion indicator has risen since the

beginning of the early years.
Since the end of period 4 the Gross Profit to Turnover indicator has increased.
The reason for the rise should be that many of the jobs
This would
completed to appear to indicate
date have done sothat jobs
either have
early or been managed better since the end of
on time.
the History.
To verify our reasoning, we can look at the performance
Again, to
statistics forverify our years.
the early reasoning, we can look at the performance statistics for both the
History and the Early Years.
As suspected, 3 jobs have completed early,
and 2 on time in the Early Years, which
explains why the contract completion
indicator has risen so much.
The Demo the screen
complete
Main Quit

Management Training Construction Professionals For: Tutorial

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Management Training

Construction Industry Simulations Ltd.

You can navigate through the tutorial by using :-

Choose from one of the following options

Forming a Company Strategy

improve the value of the company to 5m (by through improved company

By examining the Financial Report, we can see that

Period Turnover (m)

We aimed for 44m, so we reached our target.

The level of turnover is related to :-

We have succeeded in our objective of maintaining sufficient staffing levels in the

At the end of period 4, when we took control

Relationships have improved in two ways :-

In summary it is possible to manage a company without any clear strategy in place.

The decisions to be entered each period are split by business function.

The order in which decisions are processed Main Quit

Financial Management of company assets and looking after shareholder interests.

Bidding Bids are submitted, and contracts awarded.

Personnel Project managers allocated to on-going jobs.

Keep Clicking Anywhere

The role of the Financial Manager is to :-

In period 5 well continue to pay dividend at this level.

Some additional points to note about investments :-

The Demo is now complete

Entering Decisions Market Sectors The Job Period Main Quit

The non-departmental overheads are the responsibility of other managers.

Choose from the list below for detailed demonstrations.

The value and number of jobs available (size of the market)

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The additional marketing

Value of work (the default)

all of which could have a bearing on where

The Demo is now complete

Keep Clicking Anywhere on is

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The value per man period is shown on

The Demo is now complete

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It is important to devote the necessary resources to produce accurate estimates, creating

Entering Decisions Estimating Accuracy Main Quit

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The Demo is now complete

Entering Decisions Sequential Tendering Will we win the job ?

Markup (margin); the profit to hopefully be made on the job

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Build-cost savings due to the quality of the design

We can pass some of this opportunity for saving money onto

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Well switch on sequential tendering by clicking on the check box.

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The Personnel Manager needs to make decisions about :-

Which idle project managers to payoff

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Entering Decisions Key Points Main Quit

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Pay additional site cost

The Demo is now complete

Choose from one of the following options

External Performance Review

Calculating Performance Indicators Main Quit

Provides a detailed analysis of all bids

The nature is either :-

Further Information Main Quit