Z94.4 - Cost Engineering & Project Management
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LABOR BURDEN. Taxes and insurances the employer is required to pay by law based on labor payroll, on behalf of or for the benefit of labor. (In the US these are federal old age benefits, federal unemployment insurance tax, state unemployment tax, and workers compensation).
LABOR COST, MANUAL. The salary plus all fringe benefits of construction workers and general labor on construction projects and labor crews in manufacturing or processing areas which can be definitely assigned to one product or process area or cost center.
LABOR COST, NON-MANUAL. In construction, normally refers to field personnel other than crafts and includes field administration and field engineering.
LABOR FACTOR. The ratio between the workhours actually required to perform a task under project conditions and the workhours required to perform an identical task under standard conditions.
LADDERING. A method of showing the logic relationship of a set of several parallel activities with the arrow technique.
LAG. Specified time increment or delay between the start or completion of an activity and the start or completion of a successor activity.
LAG RELATIONSHIP. The four basic types of lag relationships between the start and/or finish of a work item and the start and/or finish of another work item are: 1. Finish to Start, 2. Start to Finish, 3. Finish to Finish, 4. Start to Start
LASPWYRES-TYPE PRICE INDEX (STRICT APPELLATION). A composite index founded on a Constant Basket which is taken from the base period of this index.
LATE FINISH (LF). The latest time an activity may be completed without delaying the project finish date.
LATENT CONDITION. A concealed, hidden, or dormant condition that cannot be observed by a reasonable inspection.
LATEST EVENT TIME (LET). The latest time an event may occur without increasing the project’s scheduled completion date.
LATE START. The latest time at which an activity can start without lengthening the project.
LATEST REVISED ESTIMATE. The sum of the actual incurred costs plus the latest estimate-to-complete for a work package or summary item as currently reviewed and revised, or both (including applicable overhead where direct costs are specified).
LAWS AND REGULATIONS. Laws, rules, regulations, ordinances, codes and/or orders.
LEAD. A PDM constraint introduced before a series of activities to schedule them at a later time.
LEARNING CURVE. A graphic representation of the progress in production effectiveness as time passes. Learning curves are useful planning tools, particularly in the project oriented industries where new products are phased in rather frequently. The basis for the learning curve calculation is the fact that workers will be able to produce the product more quickly after they get used to making it.
LETTER OF CREDIT. A vehicle that is used in lieu of retention and is purchased by the contractor from a bank for a predetermined amount of credit that the owner may draw against in the event of default in acceptance criteria by the contractor. Also applies when an owner establishes a line of credit in a foreign country to provide for payment to suppliers of contractors for goods and services supplied.
LEVEL FINISH SCHEDULE (SF). The date when the activity is scheduled to be completed using the resource allocation process. Level finish is equal to the level start plus duration except when split.
LEVEL FLOAT. The difference between the level finish and the imposed finish date.
LEVELIZED FIXED-CHARGE RATE. The ratio of uniform annual revenue requirements to the initial investment, expressed as a percent.
LEVEL OF EFFORT (LOE). Support effort (eg, vendor liaison) that does not readily lend itself to measurement of discrete accomplishment. It is generally characterized by a uniform rate of activity over a specific period of time.
LEVEL START SCHEDULE (SS). The date the activity is scheduled to begin using the resource allocation process. This date is equal to or later in time than early start.
LEVERAGE (TRADING ON EQUITY). The use of borrowed funds or preferred stock in the intent of employing these senior funds at a rate of return higher than their cost in order to increase the return upon the investment of the residual owners.
LIFE. (l) physical: that period of time after which a machine or facility can no longer be repaired in order to perform it design function properly. (2) service: the period of time that a machine or facility will satisfactorily perform its function without a major overhaul. (See VENTURE LIFE; STUDY PERIOD; ECONOMIC LIFE).
LIFE CYCLE. (See STUDY PERIOD; LIFE).
LIFE-CYCLE COST (LCC) METHOD. A technique of economic evaluation that sums over a given study period the costs of initial investment (less resale value), replacements, operations (including energy use), and maintenance and repair of an investment decision (expressed in present or annual value terms).
LIFO (LAST IN, FIRST OUT). A method of determining the cost of inventory used in a product. In this method, the costs of material are transferred to the product in reverse chronological order. LIFO is used to describe the movement of goods. (See FIFO.)
LINE OF CREDIT. Generally an informal understanding between the borrower and the bank as to the maximum amount of credit that the bank will provide the borrower at any one time.
LINKING PROCEDURE. A procedure by which a “new” series of indexes is connected to an “old” series in a given link period, generally because of a change in baskets. Actually, indexes of the new series with link period as time base are multiplied by the old index for the link period as the given period. (See SPLICING TECHNIQUE).
LOAD FACTOR. (l) a ratio that applies to physical plant or equipment average load/maximum demand, usually expressed as a percentage. It is equivalent to percent of capacity operation if facilities just accommodate the maximum demand; (2) the ratio of average load to maximum load.
LOAD LEVELING. The technique of averaging, to a workable number, the amount or number of people working on a given project or in a given area of a project at a particular point in time. Load leveling is a benefit of most scheduling techniques and is necessary to insure a stable use of resources. Syn: Workpower Leveling.
LOCAL COST. In foreign work, the cost of local labor, equipment taxes, insurance, equipment, and construction materials incorporated in a construction project, with local currencies. This includes the finishing of imported goods using local labor and materials, the cost of transforming imported raw or semi-finished products using local labor and plant facilities and the marketing of locally produced products.
LOCATION FACTOR. An estimating factor used to convert the cost of an identical plant from one location to another. This factor takes into consideration the impact of climatic conditions, local infrastructure, local soil conditions, safety and environmental regulations, taxation and insurance regulations, labor availability and productivity, etc.
LOGICAL RESTRAINT. A dummy arrow or constraint connection that is used as a logical connector but that does not represent actual work items. It is usually represented by a dotted line, and is sometimes called a dummy because it does not represent work. It is an indispensable part of the network concept when using the arrow diagramming method of CPM scheduling.
LOOP. A path in a network closed on itself passing through any node or activity more than once, or, a sequence of activities in the network with no start or end.
LOSS OF PRODUCTIVITY/EFFICIENCY. (See INEFFICIENCY).
LOT BATCH. A definite quantity of some product manufactured under conditions of production that are considered uniform.
LOT SIZE. The number of units in the lot.
LUMP-SUM. The complete in-place cost of a system, a sub-system, a particular item, or an entire project. Lump-sum contracts imply that no additional charges or costs will be assessed against the owner. (See FIXED PRICE CONTRACT).
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