Lecture 12

Resource allocation and resource leveling

Dr.Sawsan Hamzeh
 introduction

 In project management ,we use the term resources to

indicate three main categories : labor (human) ,
materials ,and equipment . Ultimately ,everything is
translated into a monetary quantity .

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 labor

 Labor can be further classified into the following

subcategories :
 1- salaried staff . These individuals include the project
manager , superintendent ,project engineer, secretary
, and any other person who is tied to the project but
not tied to one particular activity or work package .
 2- hourly workers .These individuals are hired to
perform a specific task or activity .

Dr.Sawsan Hamzeh
 Equipment and materials

 Equipment and materials can be further classified into

two subcategories :
 1- Construction equipment and materials .this type of
equipment and materials is used for the construction
process but is not permanently installed in the project
2-Installed equipment and materials . This type of
equipment and materials stays permanently in the
project after completion .

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 What is resource allocation?

 Resource allocation is the assignment of the required

resources to each activity , in the required amount
and timing . Resource allocation is also called
resource loading .

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 Resource leveling

 What is resource leveling ?

 Resource leveling is minimizing the fluctuations in day
–to-day resource use throughout the project . It is
usually done by shifting uncritical activities within
their available float . It attempts to make the daily use
of a certain resource as uniform as possible .

Dr.Sawsan Hamzeh
 Why level resources ?

 When the contractor adds the daily total demand for

a specific resource for all activities ,he or she must
provide the required amount ,or work will be delayed
. This daily demand naturally fluctuates depending on
the work being performed that day and the resource
demand for each activity . It is not practical or
economical to hire ,say , 10 carpenters for 2 weeks ,
then lay off 4 (or pay them for not working ) for 1
week ,then hire 8 extra workers for 4 days , and so
on.
Dr.Sawsan Hamzeh
 Why level resources ?

 Leveling may also be necessary for an expensive piece

of equipment . Say ,for example , two activities
require a tower crane at the same time .if you can
delay the start of the second activity till the first has
finished , u will redirect your resource (the tower
crane ) to the second activity .by doing this ,you will
have reduced the maximum demand of tower cranes
at any time to only one , which will save expenses .

Dr.Sawsan Hamzeh
 Do all resource need to be leveled

 Not all resource need t be leveled . The main idea of

leveling resource is to improve work efficiency and
minimize cost during the life of the project .

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 Multi project resource leveling

 Some resources may be shared among projects .The

question is which resources and how much of them .
 For small projects which are close ,for example some
staff (project manager ,safety manager ,and
equipment may be shared ).
 Staff members who don’t have to be present at the
job site every day may be spread out , either by
dividing the day between two or more jobs or by
assigning certain entire days to different jobs .

Dr.Sawsan Hamzeh
 Multi project resource leveling

 Certain high-paid staff , such as safety officers

,schedulers ,and project control people , who need to
spend only one day every week or every two weeks at
the job site ,may even fly hundreds of miles between
jobs .

Dr.Sawsan Hamzeh
 Multi project resource leveling

 Example :
 Assume a project engineer costs his employer 30$ per
hour . Two projects are within x miles of each other .
The engineer travels at an average speed of 40 miles
per hour and costs the company 0.35$ per mile to
travel between the two projects . Assume that the
following four statements are true :
 1-The engineer is needed minimum of 3 hours/day in
each project .
Dr.Sawsan Hamzeh
 Multi project resource leveling

 2- Travel between the two projects occurs only once a

day (the engineer starts his day on job A , travels to
job B , and then comes back home near job A .
 3-Overtime, if needed, is compensated at 1.5 times the
regular rate.
 4- And a second engineer costs the same amount as
the first one.

Dr.Sawsan Hamzeh
 Multi project resource leveling

 What is the maximum distance between the two

projects that makes sharing the same engineer
efficient, consider the situation that there is no
overtime ?
 Repeat the calculations assuming the two jobs are
100 miles apart

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 Leveling resource in a project

 Resource leveling is a mathematically complex

process . Fortunately , computer programs eliminated
the difficult part of this process .
 Let us deal with resource leveling manually for a small
, simple example .

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 Assigning budgets in computer
scheduling

 In scheduling programs ,two methods are available

for assigning budgets to activities :
 1-assigning a lump-sum amount with out telling the
scheduling program how was the number derived or
which resources used . You may still need to account
a cost account code in some software packages ,
which helps track the cost .

Dr.Sawsan Hamzeh
 Assigning budgets in computer
scheduling

2-assigning a number of units of certain resources (e.g.

,one foreman , two laborer , one bulldozer …. ) to the
activity . The program will calculate the budget for a
particular activity from the “ resource dictionary” in the
project database . The second method has several
advantages ,one of them is:
1- you can level your resource only when you assign
resources to the activity .

Dr.Sawsan Hamzeh
 Assigning budgets in computer
scheduling

 2-This method aids more in project control and earned

value management .
 3-In case there is a change in the cost or availability of
a resource that is being used for one or more
activities , the scheduling program will reflect the
impact of the change on the entire project level .

Dr.Sawsan Hamzeh
 Assigning budgets in computer
scheduling

 4-You may be able to use a “resource calendar” . This

type of calendar is defined for a specific crew . For
example , if a plumbing crew is available for work on a
project Wednesday through Saturday only , the
program will automatically schedule work only during
these days in the activities with this crew assigned to .

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 Example

A subcontractor needs to install flooring in two areas:

1- area 1 : this area has old vinyl tile that must be
removed and replaced with new vinyl tile .
2- area 2 : this area has a concrete slab that needs to be
topped with ceramic tile .
This simple project is broken into the activities shown in
the following table :

Dr.Sawsan Hamzeh
 example

Activity activity description IPA duration laborers

id (days)

A purchase &deliver --- 5 2

materials
B remove old vinyl tile --- 7 4
C install ceramic tile A 3 3
D install new vinyl tile A, B 5 3
E clean up & inspect C ,D 2 2

Dr.Sawsan Hamzeh
 Example

Do the following :
1- draw the precedence network and perform the CPM
calculations .
2- allocate the required resources , then level them so
that the subcontractor does not use more than six
laborers at any time .
3- find ways to improve the labor usage profile .
For the sake of simplicity assume that any laborer can
perform any task .
Dr.Sawsan Hamzeh
 Materials management

Materials management is defined as the planning and

controlling of all necessary efforts to ensure that the
correct quality and quantity of materials and equipment
are appropriately specified in a timely manner , are
obtained at a reasonable cost , and are available when
needed .
Four important objectives of materials management are
as follows :

Dr.Sawsan Hamzeh
 Materials management

1- ensure that materials meet the specifications and are

on hand when and where required .
2- obtain the best value for purchased materials .
3- provide efficient , low cost transport , security , and
storage of materials at construction sites .
4- reduce any surplus to the lowest level possible .
Materials management is an important component of
the project schedule .

Dr.Sawsan Hamzeh
 Materials management

This function starts early with the planning phase of the

project .
Theoretically , there are two extreme materials management
theories :
1- the just-in –time theory , which calls for delivering materials
at the time of installation only . Thus materials do not store at
the site .
2- the inventory buffer theory , which calls for all materials to
be purchased , delivered ,and stored on-site prior to
installation .

Dr.Sawsan Hamzeh
 Materials management

 The advantage of the first theory are fewer holding

costs (no storage, no frozen capital, less vulnerability
to theft , vandalism) . The disadvantages are higher
order costs and higher shortage costs . Conversely ,
the advantage of the second theory are lower
purchase , order , and shortage costs . The
disadvantage is higher holding costs .

Dr.Sawsan Hamzeh
 Materials management

 In real life , somewhere between the two extreme

theories must be chosen for the general contractor
to strike a balance that will result in the least total
cost . This balance vary from one project to another ,
depending on several factors , such as the size of the
project ,the location , the type and availability of
materials and weather .

Dr.Sawsan Hamzeh