Project Management

A Managerial Approach

Chapter 9

Resource Allocation

CRASH PROJECT

Critical Path Method Crashing a Project

The first time/cost combination is called normal, and the second set is referred to as crash Normal times are normal in the same sense as the m time estimate of the three times used in PERT Crash times result from an attempt to expedite the activity by the application of additional resources

Critical Path Method Crashing a Project

Careful planning is critical when attempting to expedite (crash) a project Expediting tends to create problems; and the solution to one problem often creates several more problems that require solutions Some organizations have more than one level of crashing

Flexibility in Activity Duration

Normal Duration- entails least activity cost. With expenditure of additional resources, it is generally acceptable to accomplish the activity in a shorter duration. The minimum possible duration of the activity is its Crash Duration, when its cost is the highest. For technological reasons, it is not possible to shorten duration below the crash limit even by spending more money or resources.

Time Cost Relationship of a Job

Cost

Crash

Normal

Duration

Direct Cost

Cost

Crash

Normal

Duration

Cost Slope
Cost Slope for any activity =
( crash cost normal cost ) ( crash duration normal duration ) This gives the cost per day of crashing a project.

The Resource Allocation Problem

A shortcoming of most scheduling procedures is that they do not address the issues of resource utilization and availability Scheduling procedures tend to focus on time rather than physical resources Schedules should be evaluated not merely in terms of meeting project milestones, but also in terms of the timing and use of scarce resources

The Resource Allocation Problem

The extreme points of the relationship between time use and resource use are these:
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

Resource Loading
Resource loading describes the amounts of individual resources an existing schedule requires during specific time period. Resource loading gives a general understanding of the demands a project will make on a firms resources at each point in time.

Resource Loading
The action plan links the schedule directly to specific demands for resources The PERT/CPM network technique can be modified to generate time-phased resource requirements

Steps Resource Loading

Draw a Project network diagram. Associate time durations with each activity. Use forward pass to calculate ES and EF. Make a Gantt chart - Activity on Y-axis and Time on X-axis. Write down resource requirement by each activity at every single point of time.(e.g per day)

Steps Resource Loading

Add all the resources required at each point of time. Draw a bar chart, taking time on X-axis and resources on Y-axis. Utilize the information from step above.

Example
Activity A Predecessor Time 5 Resources 6

B
C D E

A
A B C,D

3
1 4 2

7
5 3 2

Resource Leveling
When there is a mismatch between what is required and what is made available, we need to give priority to some activities, postpone some activities or do the job in small lots. The ultimate objective would be to complete the project within the same cost and time constraints. For this purpose, we slip or split the activities within margin or slacks available.

Resource Leveling
Resource leveling aims to minimize the periodby-period variations in resource loading by

shifting tasks within their slack allowances without delaying the project.

The purpose is to create a smoother distribution of resource usage by shifting slack jobs.

Example

B & E activities are on the critical path. Moving them would increase the total duration beyond seven days.

 Moving A would not solve the problem as its shift

would affect start of linked activities C & D. We can move C for two days as there is free float for the same period. But it would result in increase of labor requirement for the subsequent period. So moving D for one day is cure-all.

Resource Splitting

Loeading

Leveling