Chapter 9: Resource Allocation

Learning Objective
1. Explain the problem of allocating physical resources to multiple activities
of the project.
2. Identify the problem of PM in finding the best trade-offs among
resources, particularly time.
3. Define the basic approaches to addressing the constrained resources
allocation problem.
4. Differentiate resource loading, allocation, and leveling methods and
concepts.
5. Describe heuristic methods for the multi-project scheduling problem.

Chapter Outline
9.1 The Introduction

 The subject relates directly to the topic of scheduling because altering

schedules can alter the need for resources and—just as important—alter
the timing of resource needs.
 If the project schedule can be adjusted to smooth the use of the resource,
it may be possible to avoid project delay and, at the same time, not saddle
the project with the high cost of excess resources allocated “just to make
sure.”
 We note the major impact that current project management software has
had on the PM’s ability—and willingness—to deal with resource loading and
leveling.
9.1 Critical Path Method—Crashing a Project
 CPM used AON notation and included a way of relating the project schedule
to the level of physical resources allocated to the project.
 This allowed the PM to trade time for cost, or vice versa.
 In CPM, two activity times and two costs were often specified for each
activity.
i. First time/cost - combination was called normal, and the second
set was referred to as crash.
ii. Normal times - are “normal” in the same sense as the time
estimate of the three times used in PERT.

I. Fast Tracking
 Another way to expedite a project is known as “fast-tracking.”

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  It refers to overlapping the design and build phases of a
project
 Because design is usually completed before construction
starts, overlapping the two activities will result in shortening
the project duration.

9.2 The Resource Allocation Problem

 The shortcoming of the scheduling procedures focused on time rather than

physical resources. And also, in the discussion that follows it will not be
sufficient to refer to resource usage simply as “costs
 The major focus of this chapter are the relationship amongst time and
resource availability/usage.
 Some additional useful resources can be added at little or no cost to a
project during a crisis period. The extreme points of the relationship
between time use and resource use are these:
i. Time Limited: The project must be finished by a certain time, using
as few resources as possible. But it is time, not resource usage, that
is critical.
ii. Resource Limited: The project must be finished as soon as
possible, but without exceeding some specific level of resource
usage or some general resource constraint.
 They specify the times achievable at various resource levels. Equivalently,
they specify the resources associated with various completion times.
 Both time and resources may be limited, but in this case the specific actions
cannot also be fixed. If all three variables—
o time
o cost
o specific actions are fixed; the system is overdetermined.
 Perhaps, it may be that one or more tasks in a project are system -
constrained. A system-constrained task requires a fixed amount of time and
known quantities of resources.

9.3 Resource Loading

 Resource loading describes the amounts of individual resources an
existing schedule requires during specific time periods.
 If resources of a project are increased by X percent, the output of the project
usually does not increase by X percent, and the time required for the project
does not decrease by X percent. The output and time may not change at
all, or may change by an amount seemingly not related to X.
A. Figure 9-3 Resource Usage Calendar for the Career Day
Project.

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  Each of the human resources used in the project is listed,
followed by the name of the activities in which the resource is
used.
 The total hours of work for each resource called for by the
action plan are shown together with the amount planned for
each activity.
B. Figure 9-4 The AOA Network of table 8-2
 Because the project action plan is the source of information
on activity precedencies, durations, and resources
requirements, it is the primary input for both the project
schedule and its budget.
C. Figure 9-5 Modified AOA diagram showing activity slack and
resource usage (from Figure 9-4).
 It shows the “calendarized” AOA diagram, similar to the
familiar Gantt chart. Resource demands can now be summed
by time period across all activities.
D. Figure 9-6
 The PM must be aware of the ebbs and flows of usage for
each input resource throughout the life of the project.

9.4 Resource Leveling

 Resource leveling aims to minimize the period-by-period variations in

resource loading by shifting tasks within their slack allowances. The
purpose is to create a smoother distribution of resource usage.

I. Resource Loading/Leveling and Uncertainty

A. Resource loading provides information about period-to-period

constraints on resources over the project duration.
B. It is used when there is resource scarcity. This includes when
a resource is not available for a certain date range, when it
has to be shared with other teams or when the demand
exceeds the supply.

9.5 Constrained Resource Scheduling

 PMs are surprised by resource constraints. The cause of this condition is
usually the direct result of a failure to include resource availability in risk
identification activities.

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 PMs often apply risk management techniques to resources known to be
scarce, but neglect to consider the more common resources that usually
cause the problems.
 Two fundamental approaches to constrained resource allocation problems:
i. Heuristic approaches - employ rules of thumb that have
been found to work reasonably well in similar situations.
ii. Optimization approaches - seek the best solutions but are
far more limited in their ability to handle complex situations
and large problems.

I. Heuristic Methods

A. Heuristic approaches to constrained resource scheduling

problems are in wide, general use for a number of reasons.
a. First, they are the only feasible methods of attacking the
large, nonlinear, complex problems that tend to occur in
the real world of project management.
b. Second, while the schedules that heuristics generate may
not be optimal, they are usually quite good—certainly good
enough for most purposes.
B. The major difference among the heuristics is in the priority rules
they use. Some of the most common priority rules are:
a. As Soon as Possible - The default rule for scheduling.
b. As Late as Possible - All activities are scheduled as late
as possible without delaying the project.
c. Shortest Task First - Tasks are ordered in terms of
duration, with the shortest first.
d. Most Resources First - Activities are ordered by use of a
specific resource, with the largest user heading the list.
e. Minimum Slack First - This heuristic orders activity by the
amount of slack, least slack going first.
f. Most Critical Followers -Tasks are arranged by number
of critical activities following them.
g. Most Successors - This is the same as the previous rule,
except that all followers, not merely critical ones, are
counted.
h. Arbitrary - Priorities are assigned to activities according
to some rule not associated with task length, slack, or
resource requirements.

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 II. Optimizing Method
A. Optimizing is a process to improve the effectiveness and
efficiency of the PMs
B. This method is to improve the design robustness of the
decoupling layout and frequency allocation of power train
maintaining systems.
C. The interval optimization results can meet the decoupling layout
requirement from the view point of engineering.
D. The goal of optimization method is to find an optimal or near-
optimal solution with low computational effort.
E. To achieve the best design relative to a set of prioritized criteria
or constraints. These include maximizing factors such as
productivity, strength, reliability, longevity, efficiency and
utilization.

9.6 Multi-project Scheduling and Resources Allocation

 It is much complicated when scheduling and allocating resources to multiple
projects than a single project.
 The most common approach is to treat several projects as if they were each
element of a single project.
 The important parameters affected by projects scheduling are:
i. Schedule Slippage—It is often considered the most important of
the criteria, is the time past a project’s due date or delivery date
when the project is completed.
ii. Resources Utilization—It is a particular concern to industrial
firms because of high cost of making resources available.
iii. In-process inventory—Concerns the amount of work waiting to
be processed because there is a shortage of some resources.

I. Manufacturing Process Models

A. The criteria for measuring schedule effectiveness are those
applied to job-shops, and several approaches to resources-
constrained multiple project scheduling use the job-shops model.
B. A scarce resource required for several projects or by several
different activities in one project acts like bottleneck in a
manufacturing system.

II. Heuristic Techniques

A. There are difficulties in regards with analytical formulation of
realistic problems including major efforts of resources -
constrained multi project scheduling problem that focuses
heuristics.

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 B. The most commonly applied rules are AOA and AON.
C. All these are commercially available for customers and
several different software.
a. Resources Scheduling Method- In calculating
activity priority with the minimum value of d (ij)
where d(ij) increase in project duration resulting
activity j follows activity.
b. Minimum Late Finish- Rules assigns prioritize
the activities base on activity finish at times as
determined.
c. Greatest Resources Demand- A method that
assign prioritize base on the total resources
requirements.
d. Greatest resource Utilization-It gives priority
to the combination activity result in maximum
resource utilization during scheduling period.
e. Most Possible Job- Is given to the set of
activities that result greatest number of activities
that scheduled any period of time.

III. A Multi-Project Scheduling Heuristic

A. Project plan is nested set of plans.
B. It composed set of general tasks, each decomposed is more
detailed set of work.
C. The decomposition will continue until the work packages with
simple and enough to considered as elemental.
D. Network diagram of project can be drawn at any level of task
aggregation.
E. If an entire network is decomposed into subnetwork, their
equivalent of the multi project problem where the subnetwork
is linked to predecessor and successor project.
9.7 Goldratt’s Critical Chain

 Goldratt’s Critical Chain is a best-known attack on the resource constrained

scheduling problem. The celebrated author of the Goal (Goldratt et al.,
1992) applies his Theory of Constraints to the constrained resource
scheduling problem.
o Senior management changes the project’s scope without
consultation, without warning, and without changing the
budget or schedule.
o Project due dates are set with little regard given to availability
of resources.

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 o There is no possible way of accomplishing a project without
exceeding the given budget.
o Project workloads and due dates are set by the sales group,
not by the nature of the projects and the level of resources
needed.
o Project due dates are set unrealistically short as an “incentive”
for people to work harder and faster.

 To deal with the strong optimistic bias in many project schedules, let us
consider just a few of the things that tend to create it.
i. Thoughtless optimism Some PMs, apparently with a strong
need to deny that lateness could be their fault, deal with every
problem faced by their projects as strict exceptions, acts of
chance that cannot be forecast and hence need not be the
subject of planning.
ii. Capacity should be set to equal demand Some senior
managers refuse to recognize that projects are not assembly
lines and are not subject to standard operations management
line of balance methods.
iii. The “Student Syndrome” This phrase is Goldratt’s name for
his view that students always want more time to complete a
project. Given more time, they delay starting the project until
the last possible moment.
iv. Multitasking to reduce idle time Consider a situation where
there are two projects, A and B, each with three sequential
activities and with you as the only resource required by both
projects. Each activity requires 10 days.
v. Complexity of networks makes no difference.
vi. People need a reason to work hard Senior managers of our
acquaintance have been known to argue that project
workers—and they include project managers in that
category— “always” have enough slack time in their activity
duration estimates to make sure that they can complete the
activities on time and “without too much sweat.”
vii. Game playing- This is possibly the most common cause of
late projects. It is certainly a major cause of frustration for
anyone involved in a project.

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 I. Do Early Finishes and Late Finishes Cancel Out? So What?

A. The early and late activity completions being cancel out is one
of the tacit assumptions of probabilistic networks. This
assumption might be sensible were it not for the matters listed
in the previous subsection.
B. Goldratt writes about the phenomenon (1997, Chapter 13 and
elsewhere), and a few others have also briefly discussed the
matter there is a mild debate as to the reason for this
deplorable condition.

II. An Easy Simulation

A. Re simulation of project is possible including the specification
when a predecessor finishes his task early.
B. If the pre-determined ES of project has not yet arrived the
successor activity will not yet start.
C. Earliest finish time is equal to the most likely time.
D. We do not allow the predecessors to finish early.
E. Truncation Grabber are located above the min and max entry
boxes.
F. Overs are allowed, but under are not.
G. Successors are usually delayed because project managers
will not report finishes before the most likely duration.

III. The Critical Chain

A. Setting proper scheduling helps those who are having

problem in their time management but it does not lead to
realistic project duration estimates.
B. Path buffers can be shown by elementary statistics that the
safety time needed to correct a path.
C. Project buffer was suggested by Goldratt’s activity duration
be decreased to the point where the workers have no desire
to act out the student syndrome.
D. Dependent are the activities of a project that can be ordered
into paths based on their resource dependencies.
E. Critical Chain is the longest of all the paths of sequentially
time-dependent

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Chapter Summary
 The project crashing results in a high direct cost to the project, but also gives
clear identification for optimal time cost. In project management, direct cost
is the basis for crashed cost calculation. Project crashing serves the
purpose of effective time management.
 Fast-tracking seems to be a reasonable way to expedite construction
projects, as well as other types of projects when the early “build” or “carry
out” steps are fairly routine and well understood.
 The Resources Allocator problem, one cannot save time—one can only
spend more or less of it.
 The relationship between progress, time, and resource availability/usage is
the major focus of this chapter.
 Time Limited: The project must be finished by a certain time, using as few
resources as possible. But it is time, not resource usage that is critical. •
Resource Limited: The project must be finished as soon as possible, but
without exceeding some specific level of resource usage or some general
resource constraint.
 Project Management in Practice Benefit/Cost Analysis Saves Chicago’s
Deep Tunnel Project. This report updates an initial benefit-cost analysis of
the water conveyance tunnels at the center of the Bay Delta Conservation
Plan (BDCP). We find the tunnels are not economically justified, because
the costs of the tunnels are roughly 2.5 times larger than their benefits.
 Resource loading describes the amounts of individual resources an existing
schedule requires during specific time periods.
 Resource leveling aims to minimize the period-by-period variations in
resource loading by shifting tasks within their slack allowances.
 The criteria for measuring schedule effectiveness are those applied to job-
shops, and several approaches to resource-constrained multiple project
scheduling use the job-shop model.
 To deal with the strong optimistic bias in many project schedules, let us
consider the following things that tend to create it: (1) Thoughtless optimism;
(2) Capacity should be set to equal
 Heuristic approach offers a quick solution that is easy to understand and
implement while Optimization approach produces the best possible solution
to a given planning and scheduling problem
 Constrained resource scheduling refers to the failure of a supplier to
produce or deliver the assignment of the resource to another activity, and
loss or theft of a resource.
 Usually, the multi-project problem involves determining how to allocate
resources to, and set a completion time for a new project that is added to
an existing set of ongoing projects.

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Assessment
A. Fill in the blanks.
1. Another way to expedite a project is known as _______.
2. If all three variables – time, cost, specifications – are fixed, the system is
_______.
3. _______ describes the amounts of individual resources an existing schedule
requires during specific time periods.
4. A _______ task requires a fixed amount of time and known quantities of
resources.
5. “One cannot save time – one can only spend more or _______ of it.”

B. Identification.
1. It aims to minimize the period-by-period variations in resource loading by
shifting tasks within their slack allowances.
2. It is particular concern to industrial firms because of the high cost of making
resources available.
3. It often considered the most important of the criteria, is the time past a project’s
due date or delivery date when the project is completed.
4. Realistic approaches that may identify feasible solutions to the problem. They
usually use simple priority rules.
5. It can be used to obtain solutions to certain types of multiproject scheduling
problems.

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