iPE Help

What is a Complexity Factor

Updated on

Explains how a complexity or similar-to factor can be used in labor estimating

Labor estimates are often created for a mixture of non-recurring or engineering labor and manufactured or in-house produced part labor. Ideally labor estimates are copied from a previous proposal or from prior performance history. The deliverable being estimated today is often different to the deliverable which is being referred to and copied, perhaps a new variant of it or incorporating some upgrade or unique customer requirement not considered originally. Complexity factors are used to adjust the new estimate vs. the old.

How does Complexity Factor Work

Complexity is simply the factor by which the historical or reference effort is multiplied to derive the new effort. It is set based on a subjective assessment of the "relative complexity" of the new vs. old deliverable. For example if the old deliverable was a login screen with single factor authentication and the new deliverable is the same login screen but with two factor authentication then the complexity factor might be 25% or 1.25.

Complexity factor is entered as the ratio of old vs. new e.g. 1.25 means "old effort plus 25%" or "old effort times 1.25". Complexity factors can be less than 1 but cannot be 0. If not input or set as 0 then the complexity factor is taken as 1

Examples of Complexity Factors

There are essentially three use-cases for complexity factor in this application:

  1. When copying an estimate from a previous estimate (copy plan) then the complexity is the factor applied to the historical estimate to derive the new effort. It is also called a "similar-to" factor
  2. When copying an estimate from performance history (copy actuals) then the complexity is the factor applied to the actual labor hours recorded to derive the new effort. It is again called a"similar-to" factor
  3. When estimating the cost of a make part the complexity factor is the factor applied to the routing standards for one unit to derive the unit time, by resource, for the new part. It is again called a "similar-to" factor and represents the extra effort or complexity to build the new part vs the old one.

0 Comments

Add your comment

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Previous Article What if my formula result is split between several resources?
Next Article Complexity Factor vs. Similar-to Factor