Variable Rate Demand has the following disadvantages for projects:
- The optional value may be the bluff, and the agile target end in loss (Jack and Jill)
- A Predicated Delivery of an Agile Project affects Performance (Houdini)
- An emulated delivery method is required for pricing (Red Riding Hood)
- Put and Call Markers get harder to move the weightier the project becomes (Basket)
- Custom Delivery should move to a Leased Production Basis if upgrades required (Lease-Buy)
- When possible the Agile Project should be turned over to production company for Product Build
- BIC should always be written and addressed by layers.
Rule of Thumb: Little Boy Who Lives in the Lane (Put Basket)
The Put Method sets up a demand rate based on scale. This demand rate works into a pool of assets and is the portfolio value of the method. If project assets require purchase of equipment this should be included in the demand cost. The Call Price (Sales Demand) is where the price is determined. The requirements set up by the demand are what differentiates the price and return strategy of the Method. Also, the Put method of layering on a scale of demand can assist in developing project layers. (We have used a standard three levels of demand scale (1,2,3) but that is just for convenience here. Layers (MDL) are based on the weighting of client demand.)
The Basket Method is the simplest, and is based on an aggregation of Demand or a Pool. The Weighted Average Dollars are indicative of how the weighting changes across the type of Demand. However, due to specialized cost and other time value considerations this method will not always work, nor can it always be applied this way in terms of resources. Also the units may vary according to the class such as product splits, but for simplicity was not changed. It may need to be done in layers and then applied in aggregate.
These types of projects can tax resources considerably, and that is why the Resource Planning approach would be better. Also, some strategy needs to be applied for the other concerns related to agile projects, such as:
1. Calling the Bluff by not showing the option card which may forfeit the remainder of the project
The client may believe creating storage is an option when it is not an option to be eliminated.
2. Predicating delivery on the client's demands for scope changes can be the disappearing act for profit
3. Covering all the bases in estimating satisfactory delivery should be stress tested often.
4. As the project becomes weighted either by expanding the scope or complicating deliverables, the markers become more difficult to move and may be bottle-necked. Simplicity should be the hallmark of this method, because you should think in terms of another phase and a different demand pool.
5. The longer the project the more preferred becomes the lease method because the client is leasing your
facility and talent pool (resources are constrained.)
These are just some areas noted from financial observation that harm the payback. Costing and pricing your business and portfolio can be done using modeling techniques. But the best idea for time may be modeling the theory of the build in graphical sequential order. This can be done along with Gantt Planning.
The Basket Method may be a good first look at your agile strategy related to variable demand. Our Fibonacci numbers and other matrices are built into our delivery method using a formulation. This allows us to quickly size and scale our project but there may be reasons that model could change.
We began our discussion of Variable Rate Demand: Components here:
A Game Changer
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