8.

Project Planning: Breakdown Structuring

93
PROJECT

BUILDINGS

TANKS

Project Manager

CTRL ROOM

POWERHOUSE

TURBO GEN.

PIPING

AUXILIARIES

Prj engineer

Procur mng

worker

Fig. 8.5 Example of WBS/OBS allocation matrix for a power station construction project

with a specified number of resources and related estimated work load required to
perform the task.
Figure 8.5 is a simplified depiction of how a WBS and OBS correlate. It is imperative during the monitoring and controlling phase of the construction project that
there is a responsible person for each activity.
To summarize the planning process thus far, we have created the WBS and have
now incorporated a responsible committee or person to each element of the WBS. In
essence, from activities developed in the WBS we have allocated resources through
the OBS.

8.1.3 Cost Breakdown Structure How Much

Now that we have discussed what is going to be accomplished through the WBS
and who is going to perform activities through the OBS, owners and contractors
want to know how much things will cost.
Determining the cost is done through the Cost Breakdown Structure (CBS). The
CBS is a system for dividing a project into hardware elements and sub elements,
functions and sub functions and cost categories. It is a hierarchical structure that
classifies resources into cost accounts, typically labor, materials, and other direct
costs. In addition it represents the economic breakdown of the project into budgets
per work package. This will allow the project manager to track project progress and
expenditure according to planning breakdown of activities and responsibilities.
A CBS includes all direct full cost of labor, material, as well as the so-called
project overhead, which is still a direct cost required to execute the project. Project