Lecture#10

PLANNING ENGINEERING
AND
PROJECT MANAGEMENT

By
Lec. Junaid Arshad

DEPARTMENT OF ENGINEERING MANAGEMENT

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Topics Covered

 Resource Management

 Project Costing

 Sample Problems
 Resource Management
Each activity of the project has certain resource
requirements i.e. people and machine. These
requirements (usually) vary with activity duration.

For example, an activity has a total requirement of 12

days (man-days) of a welder and a helper. With the
normal activity duration of 6 days, 2 welders and 2
helpers available will perform the task.

By crashing, this activity can be completed in 4 days.

One additional welder and helper has to be hired on
job basis or on contract.
Estimating Resource Requirements
(For Scheduled Activity)
 Determining what resources will be
required (labor, equipment, material)
 What quantity for each resource will be
required
 When are resources available to perform
project activities.
Resource Estimating Techniques

 Expert Judgment – Any group or person

with specialized knowledge.

 Bottom-Up Estimating – Decompose

activities into smaller work components.

 Three Point Estimating – Optimistic,

pessimistic and most likely values are
determined to calculate estimate.
Resource Scheduling Process
The four major stages of resource scheduling process are

Resource definition
Resource allocation
Resource aggregation
Resource leveling

Resource definition
Resource definition involves identifying the critical
resources that need to be planned and managed
for the successful completion of the project.
Resource Allocation
Resource allocation, is concerned with assigning
the required number of those resources identified in
the previous step to each activity identified in the
plan.

More than one type of resource may be attributed

to a specific activity. For example, fixing the plates
on a ship's hull may require 10 fitters, 20 welders,
15 laborers and a certain type of welding machine.
From a practical standpoint, resource allocation
does not have to follow a constant pattern; some
activities may initially require fewer resources but
may require more of the same resources during the
later stages of the project.

In a multi-project environment as projects are

competing for limited resources, resource allocation
addresses the problem of the optimum use and
timing of the assignment of these resources to the
various project activities.
Resource Aggregation
Resource aggregation, or resource loading, is simply the
summation, on a period-by-period basis, of the resources
required to complete all activities based on the resource
allocation carried out in the previous stage.

The results are usually shown graphically as a histogram.

Such aggregation may be done on an hourly, daily, or weekly
basis, depending on the time unit used to allocate resources.

When a bar chart is used as the planning tool, the resource

aggregation is fairly simple and straightforward. For a given
bar chart, there is a unique resource unit aggregation chart
which can be drawn underneath the bar chart.

A separate graph will be required for each resource unit.

An example is shown in figure 01 below, where, for a
particular resource, the required resource units for each time
period are annotated on the bar chart. The total number of
resource units for each time period can then be summed and
a resource aggregation or load chart can be produced.
Resource Unit Aggregation Chart Showing Resource Requirements
Associated with Earliest and Latest Start Along with Highlighted
Resource Unit Requirements for Critical Path Activities.
 Resource Leveling
Resource Leveling is a process used to examine a project
for an unbalanced use of resources (usually people) over
time, and for resolving over-allocations or conflicts.
 Resource leveling ensures that resource demand does not
exceed resource availability.

Resource
Demand
Compared to
Resource
Availability
 Analyzing the issues involved in resource leveling for
a situation where a bar chart has been used as the
primary planning technique for a simple project.

 The reason for this is that resource leveling must be

considered within a time framework and bar charts
are drawn to a time scale while networks are not.

 In figure the time-scale for the activities comprising the

project are shown in a bar chart, which also shows
resource requirements for one particular resource unit.
 An examination of the bar chart and its associated
resource chart in figure 01 shows that improvements
can be made to the level of resource requirements by:

 Delaying or bringing forward the start of certain

activities

 Extending the duration of certain activities and so

reducing the demand for resources over the
duration of the activity or by a combination of both
of these adjustments
 Resource Smoothing
Resource smoothing is part of the resource leveling process.

 In itself, resource smoothing is the process that, not

withstanding any constraints imposed during the leveling
process, attempts to determine a resource requirement that is
"smooth" and where peaks and troughs are eliminated.

 For example, even if 7 units of a given resource are available

at any one time, utilizing 5 of these units each week is
preferable to 4 in one week, 7 the next, 2 the next and so on.

 Even if there is no limit to the amount of any one resource

available, it is still desirable that resource usage is as smooth
as possible.
 Given that the resource requirements of those activities on the
critical path are fixed, some order or priority needs to be
established for selecting which activity and which particular
resource associated with this activity should be given priority
in the smoothing process.

 In determining which activity should be given priority, a

subjective judgment should be made about the type of
resource (or resources) associated with each activity; priority
should be given to the activities whose resources are
considered to be most important.

 Beyond this consideration, activities should be ranked in order

of total work content and total float or slack available for that
activity. A useful device for prioritizing is to consider the ratio
of total work content/total float remaining and give priority to
activities with the highest value of this ratio.
 Problem 11
Develop network model and resource
requirement plan for the project given below:
Activity Preceding Duration Persons Remarks
Activity (days) Required
A - 3 2F + 2L F-Fitter
B - 4 2M + 2L L-Labor
C - 6 2W+ 2L W-Welder
D A 10 4F + 4L M-Mason
E B 4 2M + 2L
F C 2 2W + 2L
G D 4 2F + 2L
H E, F, G 3 3F + 3L
Problem 11
 Solution of Problem 11
Bar Chart with given Resource Requirements
Resource bar chart with given requirements
 Practiceof
Solution Problem 0411
Problem
Bar Chart with modified Resource Requirements

Resource Leveling is done on non-critical activities without

any change in project finish time.
 Solution of Problem 11
Histogram for Labor required in the Project
 Solution of Problem 11
Histogram for Fitters required in the Project

F
 Workload and its Calculation
 The DURATION of a task is the time required for its execution and depends
upon the units of resources involved in the task.

 The duration is most often measured in days or in working hours. (16 hours)

 The UNITS are the resources available to perform the task. For human
resource, we speak of people. ( 2 people)

 The WORKLOAD of a task is the result of duration multiplied by the units.

This assessment is often measured in people-days or in people-hours. ( 32
people-hours)

 DURATION = WORKLOAD / UNITS

16 hours = 32 people-hours / 2 people
 A team composed of two
workers do a task in six
days at 100% efficiency

 HYPOTHESIS:
If the efficiency of a 4
workers team is only
75%, what will be the task
duration?

 ANSWER:
4 days = 12 person-days /
(4 x .75)
 Project Costing

 Cost is a resource sacrificed or foregone to

achieve a specific objective, or something given
up in exchange.

 Costs are usually measured in monetary units,

such as dollars.

 Project cost management includes the

processes required to ensure that the project is
completed within an approved budget.
 Project Costing

 Cost Estimating: Developing an approximation

or estimate of the costs of the resources needed
to complete a project.

 Cost Budgeting: Allocating the overall cost

estimate to individual work items to establish a
baseline for measuring performance.

 Cost Control: Controlling changes to the project

budget.
Cost Estimating

 Project managers must take cost estimates

seriously if they want to complete projects within
budget constraints.

 It is important to know the types of cost

estimates, how to prepare cost estimates, and
typical problems associated with cost estimates.
Basic Tools and Techniques for Cost Estimates:
 Analogous or top-down estimates:
Use the actual cost of a previous, similar project as the
basis for estimating the cost of the current project.

 Bottom-up estimates:
Involve estimating individual work items or activities and
summing them to get a project total.

 Parametric modeling:
Uses project characteristics (parameters) in a mathematical
model to estimate project costs.

 Computerized tools:
Tools, such as spreadsheets and project management
software, that can make working with different cost
estimates and cost estimation tools easier.
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