Skip to Content
author's profile photo Former Member
Former Member

Capital Expenditure


In one of our Power project, at the beginning of Project we have created One WBS Element as Boiler. Under this WBS 5 Boilers of 5 generating units will be received from the supplier. These 5 boilers have separate WBS without any budget assigned to them. Order for 5 boilers is already placed with the supplier using common WBS where total budget for all the 5 boilers is available.

Such 100+ orders have been placed using the common budget mentioned above.

With the current configuration expenditure of all the 5 boilers is hitting to one WBS element for which the budget is assigned.

Now Business requirement has received that the expenditure need to be separated for 5 boilers individually for better control and for MIS.

While creation of this project we have entered following org structure fields which is as follows.

Controlling Area, Company Code, Business Area & Plant.

We need to provide solution for this issue. Kindly suggest.


In the above project we have another scenario i.e. Procurement of cement and steel.

We have created following WBS structure in the above project i.e.

a. Boiler

b. Chimney

c. office building etc

While providing the budget at Boiler, Chimney and office building level we have included cost for cement & steel also.

In actual project scenario Purchase orders are placed for the bulk procurement for the aggregated quantity and issued to the contractors for the consumption. It is not possible to create multiple orders at each WBS level for Cement & steel and consume the same for the above specific activity.

Finance department and the project manager wish/need to monitor the total cost of each boiler (generating unit wise) which should include cost of Boiler equipment + Steel + Cement.

Kindly suggest configuration changes need to be undertaken to provide required solution.


S S Dube

Add a comment
10|10000 characters needed characters exceeded

Assigned Tags

Related questions

1 Answer

  • author's profile photo Former Member
    Former Member
    Posted on Jul 25, 2008 at 07:24 AM

    The following are solutions based on my experience, but there can be other alternatives, which have to be tested and advised to the client.

    Solution to Problem-1

    Assumptions: Rework i.e. reassignement of commitments is accepted by client


    1) Remove the commitements at Boiler WBS.

    2) Redistribute the budget to lower WBS Elements, check wether "BUDG" and "AVAC" status is set for each Boiler.

    3) Reassign the commitments to the lower level WBS Elements.

    Solution to Problem-2

    Assumptions: creation of new cost elements and planning of cost is accepted by client.


    1)In your project u have to plan the cost under the following heads(cost elements) for the WBS Element

    1. Service Cost element

    2 Raw material - Cement

    3 Raw material - Steel.

    2) At the time of purchase provide statistical cost element as invebntory cost element and at the time of issue to the contarctor take it as consumption on the project and issue to the Raw material cost element.

    3) using the standard cost element report project manager can monitor the amount spent on steel/cement for a perticular WBS Element.

    Please let me know any further clarifications.



    Add a comment
    10|10000 characters needed characters exceeded

Before answering

You should only submit an answer when you are proposing a solution to the poster's problem. If you want the poster to clarify the question or provide more information, please leave a comment instead, requesting additional details. When answering, please include specifics, such as step-by-step instructions, context for the solution, and links to useful resources. Also, please make sure that you answer complies with our Rules of Engagement.
You must be Logged in to submit an answer.

Up to 10 attachments (including images) can be used with a maximum of 1.0 MB each and 10.5 MB total.