Resource Allocation

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Resource Allocation
Some definitions Resource allocation, loading, leveling Expediting and crashing projects Goldratt’s “Critical Chain”

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Some Definitions
Resource allocation There are generally two conditions:
– “Normal” – “Crashed”

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Normal and Crashing
Normal: Crash:

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but nothing comes free Potential cost areas – equipment/material – labor – other projects – morale – quality 5 .No Free Lunch: Crashing Creates a Ripple Effect Crashing buys time.

Inc.Case: Architectural Associates. Projects uniformly run late. or just the symptom? 6 . thus over budget Is that the problem.

Case: Architectural Associates. (cont’d) PROBLEM: Deterministic task schedules Parkinson’s Law: “Work expands to fill the time available.” RESULT: Issues arising early can be worked around. Inc. but late-occurring issues can’t 7 .

Case: Architectural Associates. (concluded) The Solution: – probabilistic time estimates – Have staff schedule work for effectiveness and efficiency 8 . Inc.

Two basic principles – 1. focus on the critical path – 2.When Trying to Crash a Project . . . Generally. Choose least expensive way to do it 9 .

Compute Cost per Day of Crashing a Project Compute cost/time slope for each expeditable activity Slope = crash cost – normal cost crash time – normal time 10 .

1 2. 80 20. 120 10. 80 11 * Partial crashing allowed ** Partial crashing not allowed .An Example Activity a b c d* e** Predecessor a a a b Days Cost (normal. 1 3. 1 $40. crash) (normal. 80 20. 20 30. crash) 3. 2 4. 2 2.

Example (cont’d): Cost per Day to Crash Activity a b c d e $ Saved/ Day 40 60 30 70 (2 days) 12 .

A CPM Example 13 .

CPM Cost-Duration 14 .

Another Approach to Expediting: Fast-tracking/ Concurrency Different terms for similar concept “Fast-tracking” (construction). “Concurrent engineering” (manufacturing) Both refer to overlapping project phases 15 .

Fast-tracking/Concurrency (cont’d) Pros: – shorten duration – reduce cycles – meet demands Cons: – increase cost 16 .

Cost. Schedule. or Performance: Pick Any Two Assuming fixed performance tradeoff areas must be in time or cost Time-limited Resource-limited “Over-determined” 17 .

Resource Loading Resource loading: amounts One project. or many – Identifies and reduces excess demands on a firm’s resources 18 .

Resource Usage Calendar 19 .

AOA Network 20 .

AON Network with Earliest/Latest Start/Finish Times 21 .

Modified PERT/CPM AOA 22 .

Load Diagrams 23 .

simplifies budgeting and funding 24 .Resource Leveling Resource leveling minimizes variations – shifting tasks within their slack allowances Advantages – Less day-to-day manipulation – Better morale. fewer problems/costs – Levels costs.

Network Before & After Resource Loading 25 .

Resource Loading Chart 26 .

Resource Loading Chart 27 .

Constrained Resource Scheduling Two basic approaches – Heuristic – Optimization 28 .

MSP Gantt with Resources 29 .

Showing Resource Conflict 30 .MSP Load Diagram.

Leveled 31 .MSP Load Diagram.

Network for Resource Load Simulation 32 .

Load Chart 33 .

Multiple Projects – Resource Leveling Schedule slippage Resource utilization In-process inventory 34 .

Task a Decomposed 35 .

Hierarchy of Gantt Charts 36 .

Flow Diagram 37 .

Goldratt’s Critical Chain systemic problems plague project performance – Not randomly distributed 38 .

Some Systemic Causes of Late Projects 1. Setting capacity equal to demand 3. Thoughtless Optimism 2. Multitasking 39 . Student Syndrome 4.

Some Systemic Causes of Late Projects (concluded) 5. Game playing 40 . Slack Time 7. Schedule Complexity 6.

Critical Chain Theory of Constraints 41 .

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