Skip to main content
Cost Overlay on an activity

​
Overview

This guide covers the two estimating-side controls that feed the Monte Carlo engine:
  1. Uncertainty Class assignment, which tells the engine how a duration or a cost varies.
  2. Cost Overlay, which links a cost to a duration so it grows when the work takes longer.
These are set on the Budget Form (Activities and Resource Assignments) and are consumed by the Risk Analysis page when a simulation runs. Location: Estimating > Budget Form, plus the Add/Edit Activity and Edit Resource Assignment modals.

​
Prerequisites

  • Uncertainty Classes must be defined for the project. See Uncertainty Classes.
  • To use the “Apply Uncertainty to Work Package” button, the project’s Basis Code Defaults should be mapped.

​
Assigning an Uncertainty Class

There are two dimensions, set in two places:
  • Schedule (duration) uncertainty is set on the Activity (the Add/Edit Activity modal has an Uncertainty Class dropdown next to the Min, Most Likely, and Max Duration fields).
  • Cost uncertainty is set on the Resource Assignment (the Edit Resource Assignment modal has a Cost Uncertainty Class dropdown).
When an assignment or activity is left unassigned, it can still inherit a class through the cascade (Project, WBS, Work Package, Activity). The cascade is configured on the Risk Analysis page; see Risk Analysis.

​
Apply Uncertainty to Work Package

On the Budget Form, the Apply Uncertainty to Work Package button assigns, to every resource assignment in the selected work package, the class mapped to that assignment’s basis code (from the Basis Code Defaults). Use it to set uncertainty across a whole work package in one step rather than editing assignments individually. Assignments whose basis code has no mapping are left unassigned. The Add/Edit Activity modal also has an Apply Uncertainty Class to All Activities in this Work Package checkbox, which copies the activity’s chosen class to its sibling activities in the same work package.

​
Cost Overlay

Cost Overlay is a flag that ties a cost to a duration. When it is on, the engine scales the cost by the activity’s sampled duration ratio in each Monte Carlo iteration:
So if an activity’s baseline is 10 days and an iteration samples 15 days (a ratio of 1.5), an overlaid 1,000assignmentcontributes1,000 assignment contributes 1,500 in that iteration. A non-overlaid assignment contributes its sampled cost unchanged.

​
When to use it

Use Cost Overlay for level-of-effort, time-driven costs that genuinely grow when work takes longer:
  • Labor and support staff
  • Equipment and facility rentals
  • Anything billed by the period (a project manager’s time, a site trailer)
Do not use it for fixed or quantity-driven costs that cost the same regardless of duration:
  • Fixed-price subcontracts
  • Purchased materials
  • Lump-sum deliverables
Do not flag everything for overlay. Applying Cost Overlay to fixed-price or material costs overstates the correlation between schedule and cost and inflates the contingency. Flag only the costs that truly scale with time. A good test: “if this activity took twice as long, would this cost roughly double?” If not, leave overlay off.

​
Setting it on an Activity

In the Add/Edit Activity modal, check Cost Overlay (cost scales with duration). When on, this becomes the default for every resource assignment on the activity that inherits.

​
Setting it on a Resource Assignment

The Edit Resource Assignment modal has a three-state control: When set to Inherit, the modal shows the resolved state (“Currently: ON (from Activity)” or “Currently: OFF (from Activity)”) so you can see what you would inherit. For an assignment mapped to several activities, inheritance is permissive: if any mapped activity has overlay on, the inheriting assignment overlays. The resolution rule is: an explicit Yes or No on the assignment always wins; otherwise the assignment inherits the activity’s setting.

​
Cost Overlay needs schedule uncertainty to have any effect

Overlay scales cost by the duration ratio, and the duration only varies when the activity has a schedule Uncertainty Class to sample from. If the activity has no schedule uncertainty (the duration is fixed), the ratio is always 1.0 and the overlay has no effect. To make overlay meaningful, assign a schedule Uncertainty Class to the overlaid activities (or let one cascade down to them).

​
Setting it across many items

To see and set overlay across a whole hierarchy at once, use the Cost Overlay column in the Cost and Schedule Uncertainty cascade on the Risk Analysis page. Every activity and resource assignment appears in one tree, with an orange icon on the ones whose cost will stretch and, for inheriting assignments, which activity supplied that; so you can tell which work is level-of-effort before flipping anything. See The Cost Overlay column.

​
How this shows up in analysis

When you run a simulation in Combined or Uncertainty-only mode, overlaid costs scale with their activities’ sampled durations, and the Contingency Decomposition panel reports a separate Cost overlay line showing how much contingency comes from these time-driven costs.