Parametric formula or cost estimating relationships in iPE use an Excel-like formula to create expressions such as ( 0.1 * engineering_effort ) or ( number_of_drawings * effort_per_drawing ) or ( 0.02 * equipment_material ). The words or fields in each expression are parameters which are set up as part of a formula.  Parameters can be shared across multiple formulae. There are five types of parameters:

1. Sizing inputs, rates or user input parameters (Q&A responses) managed by company, project, task, estimate, risk, bill of material etc.
2. Base parameters which are calculated based on the result of some other estimates
3. Predicted parameters using predictive analytics or a regression analysis of previous performance history (not  used by P&G)
4. Variables which are calculated based on other parameters
5. Escalation factors which are used to apply inflation to historical costs or to calculate estimates in future money terms

Parametric formula or expressions can be used throughout iPE to make cost estimates smarter. For example:

• Risk cost impacts and contingencies can be calculated based on pre-defined %'s of the base estimate cost
• Direct cost work efforts can be calculated based on duration, number of staff and utilization
• Quality, supervisory, project mgt. and other support costs can be calculated based on a % of estimated labor cost or hours
• Equipment and material costs can be managed based on configurable parameters such as pump flow-rate
• Shipping, buying overhead or duty costs can be calculated based on a selected %'s of the base estimate cost
• Travel costs can be calculated as a % of on-site labor costs.

To use a formula select it from the 'Formula' column of your estimate, as highlighted below. Project-specific formula can also be set up on the fly.

Formulas can depend on or the results from other formula in their base. This is like creating a formula in Excel which refers to a cell which itself is set by another formula in Excel. Unlike Excel, iPE cannot automatically determine the correct sequence to calculate formulae in, so to ensure that these co-dependent formula are computed in the proper sequence, a rank is available, with lower ranked formulae processed first.

Always set rank = 0 for formula which do not depend on the results of any other formula, set rank = 1 for formula which only depend on unranked or rank 0 formula, and rank = 2 for other formula which depend on a rank 1 formula (and so on...)

To create, view or edit your formula go to Master data > Formula (if authorized).

You will see a list of formula defined in your system. You can:

1. Create a new formula using the + button
2. Delete an existing formula using the x button. Note, any places where this formula has been used will stop working so do not delete a formula which is in use, which you can tell from the WHERE-USED tab within each formula
3. Sort or filter on any of the columns or change the columns, to search for your formula
4. Click on the test icon to test or view the formula result
5. Click on the pencil or double-click the row to edit the formula details

Once you open a specific formula you can edit the description, parameters, expression and test-values for parameters used in that formula. Numbers in the list below refer to the screen-image below.

1. Describe your formula in as much detail as necessary. If the formula is specific to a business unit or group then include the business unit or group name in the description. Bear in mind you will only see the first few words of the description when searching for the formula in your estimating application
2. The formula ID or code is automatically generated for you, but you can also change it. Only use numbers and letters, hyphens and underscores, and make sure both the text and the ID or code is unique
   • Formulas can calculate a direct cost such as labor, mgt. or support, or calculate an indirect cost such as fringe, overhead, shipping or duty costs
   • Item cost or price records can of themselves be computed using a formula
   • Formulas can even select a bill of material component or adjust the indentured structure quantity
3. Select a cost element which is appropriate for your formula for when you want to report on your project with indirect costs being on special cost elements
4. The formula result might be an effort (e.g. a labor formula) or a cost (e.g. an other direct cost or an indirect cost formula). It is important to select the correct result output based on the parameters you have chosen in your expression
   • For example if your formula is "2% x software_engineering effort" then the result is a duration or effort
   • Conversely if your formula is "fringe_rate x direct_costs" then the result is clearly a cost
   • Result outputs for duration/effort, true/false (selection), amount with currency and BOM quantity are supported
5. The expression is the heart of your formula and denotes what effort or cost will be calculated. To select a field or parameter within your formula press the = key and choose the correct field from the list of parameters. Otherwise type your expression as you would in Excel. There is no need to put or leave an = sign at the start of the formula. Note that:
   • Any parameters or fields you select will be surrounded by ${ ... } field indicators. Do not delete these (unless you no longer want them in your expression) or edit the parameter names
   • Only basic math operators like + - / * ( and ) are supported, without reverting to a MVEL formula expression. MVEL expressions are more complex and sophisticated even than Excel formulas, and support if statements, loops and step-by-step scripts
   • Enter % parameters as a number e.g. 0.15 for 15%
6. Any parameters which you selected in your formula expression are automatically listed in the table above. Here you can see what type of parameter this is, for example is it a company-wide parameter or an automatically calculated base parameter. Also you can see if it is a duration/effort, a cost or amount with currency, or a number
   • Enter any test values in the test value column of the parameter list to test your formula. These values are saved but they are not used when evaluating the formula within an estimate or when generating the cost model
7. The formula result or the result of swapping parameters in the expression (5) with their test values (6) is displayed
8. You can add a comment on any parameter or click the pencil to view how each parameter is setup
9. You can classify or tag your formula with custom attributes to make it easier to group and import formula-sets in the future.

To test a formula click on (7, above) Test Formula after clicking on the 'Value (Enter to Test)' column and entering test values. The formula result will appear as a message as shown below.