2. Allocating Resources to the Project
Allocation of physical resources to one or multiple
projects.
At any given time, the firm may have fixed level of
various resources like
- labor-hours of various types of professionals
- machine hours of various types of machinery
- hours of computing time
- specialized locations
The project schedule should be adjusted to
smooth the use of the resources
3. Critical Path Method—Crashing a
Project
Time and cost are interrelated
The faster an activity is completed, the
more it costs
Change the schedule and you change
the budget
Thus many activities can be speeded up
by spending more money
4. What is Crashing / Crunching?
To speed up, or expedite, a project
Of course, the resources to do this must be
available
Crunching a project changes the schedule for
all activities
This will have an impact on schedules for all
the subcontractors
Crunching a project often introduces
unanticipated problems
5. Direct Cost vs. Indirect Cost
Direct cost increases if the activity
duration is to be reduced.
The Indirect cost decreases if the activity
duration is to be reduced.
8. Activity Slopes—Cost per Period for
Crashing
Negative slope: as the time required for a project or task is decreased,
the cost is increased.
9. Crashing the Project
When crashing a project, first task is to
develop a table or graph of the cost of a
project as a function of the project’s various
possible completion dates.
Crash selected activities, one at a time, to
decrease the project duration.
10. Crashing the Project
Two principles:
•Focus on the critical path(s) when trying to
shorten the duration of a project. (Crashing
a non-critical activity will not influence
project duration.)
•When shortening a project’s duration, select
the least expensive way to do it.
20. Risks in Project Crashing
Various external and internal factors may lead project
manager to go for crashing, but it usually affects the
quality of work as the time taken (besides cost) is the
major issue on his mind:
New resources aren't going to be familiar with the tasks
at hand, so they will probably be less productive than
current team members.
Who will guide the new members up the learning curve?
Usually it will be the most productive members of the
team, who could themselves be working to get the task
finished more quickly.
Being available does not equal being qualified. For
example, while outsourcing, one can't be sure that
workers are trained enough to deliver as per expected
standards.
21. Project Fast Tracking
Fast tracking means that the activities that are
normally done in sequence are instead performed
partially in parallel. In other words, Fast tracking is
applied by re-scheduling various activities within the
project to be worked on simultaneously instead of
waiting for each piece to be completed separately.
Fast-tracking always involves risk that could lead to
increased cost and some rework later.
A good rule of thumb is that sequential activities can
sometimes be fast-tracked by up to 33%. In other
words, if you're fast-tracking, you can start the
second of two sequential activities when the first
activity is 66% complete.
22. The Resource Allocation
Problem
As discussed, CPM/PERT ignore resource
utilization and availability
Critical resources can’t be renewed or
inventoried.
Schedules need to be evaluated in terms of
both time and resources (scarce ones)
Time Limited vs. Resource Limited
23. Resource Loading
Resource loading describes the amount
of resources an existing schedule
requires
Gives an understanding of the demands
a project will make of a firm’s resources
26. Resource Leveling
Approach to even out the peaks and
valleys of resource requirements so that
a fixed amount of resources can be
employed over time.
Less hands-on management is required
May be able to use just-in-time inventory
Improves morale
Fewer personnel problems
27. Resource Leveling Continued
When an activity has slack, we can move that
activity to shift its resource usage
May also be possible to alter the sequence of
activities to levelize resources
Small projects can be levelized by hand
Software can levelize resources for larger
projects
Large projects with multiple resources are very
complex to levelize
28. Resource Leveling Steps
Create a project activity network diagram and
mention the duration of the activities
Calculate EOT( earliest occurrence time) for
all the events. This helps in calculation of float/
slack of activities
Develop a time-phased resource loading
diagram
Identify any resource conflicts and begin to
smooth the loading table using slacks
29. Resource Leveling Techniques
1. Shift the start date of an activity within its
slack time
2. Split the activity within its slack time
30. Resource Leveling Example:
Activity Duration Manpower Req.
1-2 6 8
1-3 10 4
1-4 6 9
2-3 10 7
2-4 4 6
3-5 6 17
4-5 6 6
Q: Reduce the peak manpower requirement and smoothen the period
to period resource requirement.
32. Question:
A job requires the following resources:
Six crane operators have been recruited for the
job. How would you manage the job so as to
complete it at the earliest?
33. Constrained Resource Scheduling
Heuristic
Approach
An approach, such as a
rule of thumb, that yields
a good solution that may
or may not be optimal.
Optimization
Approach
An approach, such as
linear programming, that
yields the one best
solution.
34. Heuristic Methods
The only feasible way on large projects
While not optimal, the schedules are very
good
Take the CPM/PERT schedule as a baseline
They sequentially step through the schedule
trying to move resource requirements around
to levelize them
Resources are moved around based on one or
more priority rules
35. Common Priority Rules
As soon as possible
As late as possible
Shortest task first
Most resources first
Minimum slack first
Most critical followers
Most successors
Arbitrary
36. Heuristic Methods Continued
These are just the common ones
There are many more
The heuristic can either start at the
beginning and work forwards
Or it can start at the end and work
backwards
37. Optimization Methods
Finds the one best solution
Uses either linear programming or
enumeration
Not all projects can be optimized
Approaches only work with small to
medium projects
38. Multi-Project Scheduling and
Resource Allocation
Scheduling and resource allocation problems increase
with more than one project
The greater the number of projects, the greater the
problems
One way is to consider each project as part of a much
larger project
However, different projects have different goals so
combining may not make sense
Must also tell us if there are resources to tackle new
projects we are considering
40. Schedule Slippage
The time past a project’s due date when the
project is completed
Slippage may cause penalties
Different projects will have different penalties
Expediting one project can cause others to slip
Taking on a new project can cause existing
projects to slip
41. Resource Utilization
The percentage of a resource that is
actually used
We want a schedule that smoothes out
the dips and peaks of resource utilization
This is especially true of labor, where
hiring and firing is expensive
42. In-Process Inventory
This is the amount of work waiting to be
processed because there is a shortage
of some resource
Similar to WIP in manufacturing
The cost here is holding cost
43. Heuristic Techniques
Multi-projects are too complex for
optimization approaches
Many of the heuristics are extensions of
the ones used for one project
44. Additional Priority Rules
Resource scheduling method
Minimum late finish time
Greatest resource demand
Greatest resource utilization
Most possible jobs
