PROJECT MANAGEMENT

LECTURE 5:Resources Allocation

Projects compete for available resources:
 Funding
 Staffing
 Materials
 Time Constraints

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Expediting a project
 Projects sometimes need to be expedited:
 Customer demands
 Opportunities become available
 Delay in part of project result in need to expedite other parts

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Resource Allocation
 Resource allocation permits efficient use of physical assets
 Within a project, or across multiple projects
 Drives both the identification of resources, and timing of their
application
 There are generally two conditions:
 “Normal”
 “Crashed”

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Normal and Crashing
 Normal: Most likely task duration, like “m” in Chapter 8
 Crash: Expedite an activity, by applying additional resources
 Specialized or additional equipment
 More people (e.g., borrowed staff, temps)
 More hours (e.g., overtime, weekends)

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No Free Lunch: Crashing Creates a Ripple Effect

 Crashing buys time, but nothing comes free

 Potential cost areas
 Additional equipment/material
 Extra labor
 Negative effects on other projects
 Reduced morale, from excessive hours/shifts
 Lower quality, from the pressure of time, inexperienced
and tired staff
• “If you want it bad, you’ll get it bad . . .”.

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When Trying to Crash a Project …
 The critical path method
 Fast-tracking a project
 Project expediting in practice
 Opportunities before the project begins
 Opportunities when the project is underway

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Critical Path Method

 Normal duration estimates

 Normal costs
 Crash duration estimates
 Second estimate based on additional resources to expedite the task
 Crash costs
 Crash cost per day
 Each one of these options expedite the process, but at a cost
 Notes on crashing
 Important to make sure resources required to crash the project are
available
 Technology may be used to crash an activity
• Example above with backhoe
 May have to expedite tasks not on critical path to make resources
available to other projects
 Some tasks cannot be crashed

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 The Resource Allocation Problem
 Most scheduling procedures do not address the issues of resource
utilization and availability
 Scheduling procedures tend to focus on time rather than physical
resources
 Time itself is always a critical resource in project management
 It is unique because it can neither be inventoried nor renewed

Chapter 9-5 91-1

 The Resource Allocation Problem

 Schedules should be evaluated:

 in terms of meeting project milestones
 in terms of the timing and use of scarce resources
 Measure of the project manager’s success: skill with which the trade-offs
among:
 Performance
 Time
 Cost

Chapter 9-6 101-1

 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

Chapter 9-7 111-1

 The Resource Allocation Problem
 If all three variables - time, cost, specifications - are fixed, the system is
“overdetermined”
 In this case, the project manager has lost all flexibility to perform the
trade-offs necessary to successful completion of projects
 A system-constrained task requires a fixed amount of time and known
quantities of resources

Chapter 9-8 121-1

 Resource Loading
 Describes the amounts of individual resources an existing schedule
requires during specific time periods
 The loads (requirements) of each resource type are listed as a
function of time period
 Gives a general understanding of the demands a project or set of
projects will make on a firm’s resources

Chapter 9-9 131-1

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

141-1
Example

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Another Approach to Expediting: Fast-
tracking/Concurrency
 Different terms for similar concept
 “Fast-tracking” (construction), “Concurrent engineering”
(manufacturing)
 Both refer to overlapping project phases
 E.g., design/build, or build/test

201-1
Fast-tracking/Concurrency

 Pros:
 Can shorten project duration
 Can reduce product development cycles
 Can help meet clients’ demands
 Cons:
 Can increase cost through redesigns,
excessive changes, rework, out-of-
sequence installation, and more

211-1
Project Expediting in Practice

 The manager may know ahead of time that this project is time-
critical and needs to be finished as early as possible
 Project manager may find out during the project that it needs to be
finished earlier
 Something delays the project and time needs to be made up
 Opportunities Before the Project Begins
 Most projects have one time estimate
 Many projects have a project “buffer”
 A project time contingency may be added as well
 Can monitor key activities closely
 May order long-lead time items early

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Opportunities When the Project is Underway

 Focus on critical path

 Use contingency time
 Pull resources from less critical activities
 Move buffers to more critical activities
 May skip less critical steps
 May postpone activities involving non-core members
 Move activities to post-project stage
 May run activities in parallel or use weekends
 Pressuring team to work faster
 Get additional resources for overtime or additional people
 May reduce scope
 May wait and see

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 Resource Loading
 Refers to the amounts of specific resources that are scheduled for use on specific
activities or projects at specific time
 It is usually presented in the form of a list or table

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Resource Loading Issues
 Most project management software assumes that any
resource assigned to an activity will work on that activity
100 percent of the time available
 This can be resolved by allocating a specific percentage of time to
the project
 It is easy to over utilize humane resources
 Overtime is expensive
 Easy to overload those who perform best

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