This document summarizes key concepts around resource allocation and scheduling projects. It discusses allocating human and technical resources to individual or multiple simultaneous projects. The critical path method and crashing projects to expedite them is covered, noting that faster completion incurs higher costs. Crashing changes the schedule and budget for all activities. Resource allocation problems arise from considering both time and resource availability constraints. The resource allocation problem, time vs resource limitations, and resource loading are defined to understand resource demands on a firm. Leveling resources can shift activity timing to smooth resource usage over a project's duration.

1. Chapter 9: Resource Allocation
What is Resource Allocation?
• Allocating resources (human, technical, etc) to
projects
• Use in both individual and multiple, simultaneous
projects
• Relates to scheduling and costs
Critical Path Method—Crashing a Project
• Time and costs are interrelated
• Faster an activity is completed, more is the cost
• Change the schedule and you change the budget
• Thus many activities can be speeded up by
spending more money
What is Crashing?
• 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
Activity Slope
Crash Cost Normal Cost
Crash Time Normal Time
Slope




2. An Example of Two-Time CPM
Activity Slopes—Cost per Period for
Crashing
Crashing the Project

4. Cost-Crash Curve
Fast-Tracking
• Fast-tracking is another way to expedite a project
• Mostly used for construction projects
• Can be used in other projects
• Refers to overlapping design and build phases
• Increases number of change orders
• Increase is not that large
Q. For Given AOA diagram

5. Official Pace
of a Project

6. The Resource Allocation Problem
• CPM/PERT ignore resource utilization and
availability
• With external resources, this may not be a
problem
• It is, however, a concern with internal resources
• Schedules need to be evaluated in terms of both
time and resources
Time Use and Resource Use
• Time limited: A project must be finished by a
certain time
• Resource limited: A project must be finished
without exceeding some specific level of resource
usage
• Overdetermined: when time, cost, and scope are
fixed
• System-constrained: A project requires a fixed
amount of time and resources
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

8. Resource-loading via charts
Rules
1. Create the activity network diagram
2. Produce a table for each activity, the resource
requirements, the duration, early start time,
slack, and late finish time.
3. List the activities in order of increasing slack (or in
order of latest finish time for activities with the same
slack).
4. Draw an initial resource-loading chart with each
activity scheduled at its earliest start time, building it
up following the order shown in step 3. This process
creates a loading chart with the most critical activities
at the bottom and those with the greatest slack on the
top.
5. Rearrange the activities within their slack to create
a profile that is as level as possible within the
guidelines of not changing the duration of activities or
their dependence.
6. Use your judgment to interpret and improve
activity leveling by moving activities with extra
slack in order to “smooth” the resource chart across
the project.

9. After levelling

10. Resource Leveling…
• 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
Another example

11. AOA Network
Modified AOA

12. Resource A
Resource B
H.W. Question

13. Goldratt’s Critical Chain
• Best attack on the resource-constrained
scheduling problem
• Applies his Theory of Constraints to
constrained resource scheduling problem
• Some of the things that help create strong
optimism bias
 Thoughtless optimism (ignore risk)
 Capacity should be equal to demand
 The “Student Syndrome”
 Multitasking to reduce idle time
(multitasking causing delay)
 Assuming network complexity makes
no difference
 Management cutting time to
“motivate” workers
 Game playing (politics)
Do Early Finishes and Late Finishes Cancel Out?
So What?
• The answer is generally “no”
• Why?
• Workers won’t admit to finishing early
• Resources may not be available
Q. What is theory of constraints?
Q. What is student syndrome?
1. Add more resources
2. Reduce multitasking
3. When to release the projects one after another ?
4. Schedule the start based on bottleneck resrouce.
5. Keep project buffer in time and budget