Resource Allocation & Leveling

Resource Leveling: Reschedule the noncritical

tasks to smooth resource requirements
Resource Allocation: Minimize project
duration to meet resource availability constraints
Resource Allocation & Leveling
Three types of resources:
1) Renewable resources: “renew” themselves
at the beginning of each time period (e.g.,
workers)
2) Non-Renewable resources: can be used at
any rate but constraint on total number
available
3) Doubly constrained resources: both
renewable and non-renewable
Resource Leveling
Task C
9 wks

Task A
3 wks Task D
5 wks

START Task G
END
5 wks

Task B Task E
2 wks 3 wks

Task F
2 wks

Task Workers Duration (t j) Early Start Late Start

A 7 3 0 0
B 3 2 0 3
C 2 9 3 4
D 10 5 3 3
E 4 3 2 5
F 5 2 2 11
G 6 5 8 8
Resource Leveling: Early Start Schedule

Early Start Schedule

25

20
Task G
Number of Workers Needed

Task F
15 Task E
Task D
Task C
10
Task B
Task A
5

0
1 2 3 4 5 6 7 8 9 10 11 12 13
Week
Resource Leveling: Late Start Schedule

Late Start Schedule

18

16

14
Task G
Number of Workers Needed

12 Task F
10 Task E
Task D
8 Task C
6 Task B
Task A
4
2

0
1 2 3 4 5 6 7 8 9 10 11 12 13
Week
Resource Leveling: Microsoft Project
Dec 17, '00 Dec 24, '00 Dec 31, '00 Jan 7, '01
T W T F S S M T W T F S S M T W T F S S M T W T F S
25

20

15

10

10 10 10 10 10 10 10 10 10 10 16 16 16 16 16 21 21 21
Workers Overallocated: Allocated:
Renewable Resource Allocation Example
(Single Resource Type)

3 workers 6 workers

Task A Task C
4 wks 1 wk

START Task E
4 wks END

Task B Task D
3 wks 5 wks 7 workers

5 workers 8 workers

Maximum number of workers available = R = 9 workers

 Resource Allocation Example: Early Start Schedule

Task A: Task C:
3 workers 6 workers

Start
End

Task B:
Task E:
5 workers
7 workers
Task D:
8 workers

Week 1 2 3 4 5 6 7 8 9 10 11 12
No. of Workers/wk 8 8 8 11 14 8 8 8 7 7 7 7
Cumulative Workers 8 16 24 35 49 57 65 73 80 87 94 101
"Wasted" worker-wks 1 1 1 - - - - - - - - -

Maximum number of workers available = R = 9 workers

 Resource Allocation Example: Late Start Schedule

Task A:
3 workers
Start
Task C:
End
6 workers
Task B:
Task E:
5 workers
7 workers
Task D:
8 workers

Week 1 2 3 4 5 6 7 8 9 10 11 12
No. of Workers/wk 5 5 5 11 11 11 11 14 7 7 7 7
Cumulative Workers 5 10 15 26 37 48 59 73 80 87 94 101
"Wasted" worker-wks - - - - - - - - 2 2 2 2

Maximum number of workers available = R = 9 workers

 Resource Allocation Heuristics
n Some heuristics for assigning priorities to available tasks j, where Rkj denotes the
number of units of resource k used by task j

n 1) FCFS: Choose first available task

n 2) GRU: (Greatest) resource utilization =
 Rkj
n
k

3) GRD: (Greatest) resource utilization x task duration = k
Rkj tj

4) ROT: (Greatest) resource utilization/task duration =  Rj / tj

n
k

k
n 5) MTS: (Greatest) number of total successors
n 6) SPT: Shortest processing time = min {t j}
n 7) MINSLK: Minimum (total) slack
n 8) LFS: Minimum (total) slack per successor
n 9) ACTIMj: (Greatest) time from start of task j to end of project = CP - LS j
n 10) ACTRESj: (max) (ACTIMj)
n 11) GENRESj: w ACTIMj + (1-w) ACTRESj where 0 ≤ w ≤ 1
Resource Allocation Problem #2

Task A1 Task A2
6 days 4 days

Start Task B1 Task B2

3 days 5 days
End

Task C1 Task C2
2 days 5 days

Gold Crew Purple Crew

 How to schedule tasks to minimize project makespan?

Priority scheme: schedule tasks using total slack (i.e., tasks with
smaller total slack have higher priority)

Task A1 Task B1 Task C1

Gold Crew
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Task A2 Task B2 Task C2

Purple
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Crew
 Resource Allocation Example (cont’d)

But, can we do better? Is there a better priority scheme?

Gold Crew 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Purple
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Crew
Microsoft Project Solution (Resource Leveling Option)

Solution by: Microsoft Project 2000

Critical Chain Project Management
• Identify the critical chain: set of tasks that determine the overall
duration of the project
• Use deterministic CPM model with buffers to deal with uncertainty
• Remove padding from activity estimates (otherwise, slack will be
wasted). Estimate task durations at median.
• Place project buffer after last task to protect customer’s completion
schedule
• Exploit constraining resource(s)
• Avoid wasting slack times by encouraging early task completions
• Have project team focus 100% effort on critical tasks
• Work to your plan and avoid tampering
• Carefully monitor and communicate buffer status
Critical Chain Buffers

Project Buffer : placed after last task in project to protect schedule

Feeding Buffers : placed between a noncritical task and a critical task

when the noncritical task is an immediate predecessor of the critical task

Resource Buffers : placed just before a critical task that uses a new

resource type
Critical Chain Illustrated

Feeding Buffers

Task C1 Task B1 Task A1

2 days 3 days 6 days

Start End

Task C2 Task B2 Task A2

5 days 5 days 4 days

Resource Buffers
Non-Renewable Resources
12 units

Task B
5 wks
6 units 8 units

Task A Task D
START END
6 wks 2 wks

Task C
3 wks

10 units

No. of Nonrenewable
Resources Units
Task Duration Needed Early Start Late Start
A 6 6 0 0
B 5 12 6 6
C 3 10 6 8
D 2 8 11 11
 Non-Renewable Resources: Graphical Solution

Cumulative Resources
Supplied

40

36
Cumulative Resources

32 Cumulative Resources
Required
28

24

20

16

12

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Weeks
Resource Allocation Problem #3
Issue: When is it better to “team” two or more
workers versus letting them work separately?

• Have 2 workers, Bob and Barb, and 4 tasks: A, B, C, D

• Bob and Barb can work as a team, or they can work separately
• When should workers be assigned to tasks? Which configuration
do you prefer?
How to Assign Project Teams?

A C

Start End
B D

Configuration #1
Bob and Barb work jointly on all four tasks; assume that they can complete each
task in one-half the time needed if either did the tasks individually

Configuration #2
Bob and Barb work independently. Bob is assigned to tasks A and C; Barb is
assigned to tasks B and D
Bob and Barb: Configuration #1

TASK A TASK B TASK C TASK D

Duration Prob Duration Prob Duration Prob Duration Prob
6 0.33 9 0.667 12 0.6 10 0.25
5 0.33 6 0.333 7 0.4 6 0.75
4 0.33
Expected
duration 5.0 8.0 10.0 7.0

Configuration #1
Bob and Barb work jointly on all four tasks.
What is the expected project makespan?
 Bob and Barb: Configuration #2
Bob and Barb work independently. Bob is assigned to tasks A and C; Barb is
assigned to tasks B and D
max
Bob Barb (A+C,
Realization # A B C D A+C B+D B+D) Prob
1 6 9 12 10 18 19 19 0.03
2 6 9 12 6 18 15 18 0.10
3 6 9 7 10 13 19 19 0.02
4 6 9 7 6 13 15 15 0.07
5 6 6 12 10 18 16 18 0.02
6 6 6 12 6 18 12 18 0.05
7 6 6 7 10 13 16 16 0.01
8 6 6 7 6 13 12 13 0.03
9 5 9 12 10 17 19 19 0.03
10 5 9 12 6 17 15 17 0.10
11 5 9 7 10 12 19 19 0.02
12 5 9 7 6 12 15 15 0.07
13 5 6 12 10 17 16 17 0.02
14 5 6 12 6 17 12 17 0.05
15 5 6 7 10 12 16 16 0.01
16 5 6 7 6 12 12 12 0.03
17 4 9 12 10 16 19 19 0.03
18 4 9 12 6 16 15 16 0.10
19 4 9 7 10 11 19 19 0.02
20 4 9 7 6 11 15 15 0.07
21 4 6 12 10 16 16 16 0.02
22 4 6 12 6 16 12 16 0.05
23 4 6 7 10 11 16 16 0.01
24 4 6 7 6 11 12 12 0.03
Bob and Barb: Configuration #2

Bob and Barb work independently. Bob is assigned to tasks A and C; Barb is
assigned to tasks B and D

max (A+C, Cumulative

B+D) Prob Prob
12 0.07 0.07
13 0.03 0.10
15 0.20 0.30
16 0.20 0.50
17 0.17 0.67
18 0.17 0.83
19 0.17 1.00

Expected Project Makespan: 16.42

Parallel Tasks with Random Durations

Task A

START
END

Task B

• Assume that both Tasks A and B have possible durations:

8 days with probability = 0.5
10 days with probability = 0.5
• What is expected duration of project? (Is it 9 days?)
Project Monitoring and Control
n “It is of the highest importance in
the art of detection to be able to
recognize, out of a number of acts,
which are incidental and which are
vital. Otherwise your energy and
attention must be dissipated instead
of being concentrated.”

Sherlock Holmes
Status Reporting?

One day my Boss asked me to submit a status

report to him concerning a project I was working
on. I asked him if tomorrow would be soon enough.
He said, "If I wanted it tomorrow, I would have
waited until tomorrow to ask for it!"

New business manager, Hallmark Greeting Cards

 Control System Issues
n What are appropriate performance metrics?
n What data should be used to estimate the value of each
performance metric?
n How should data be collected? From which sources? At
what frequency?
n How should data be analyzed to detect current and future
deviations?
n How should results of the analysis be reported? To
whom? How often?
Controlling Project Risks
Key issues to control risk during projecct:
(1) what is optimal review frequency, and
(2) what are appropriate review acceptance levels
at each stage?

“Both over-managed and under-managed

development processes result in lengthy design
lead time and high development costs.”
Ahmadi & Wang. “Managing Development Risk in
Product Design Processes”, 1999
Project Control & System Variation

Common cause variation: “in-control” or normal

variation
Special cause variation: variation caused by forces
that are outside of the system

According to Deming:
• Treating common cause variation as if it were special cause variation
is called “tampering”
• Tampering always degrades the performance of a system
Control System Example #1
n Project plan: We estimate that a task will
take 4 weeks and require
n 1600 worker-hours

At the end of Week 1, 420 worker-hours

have been used

Is the task “out of control”?

Control System Example (cont’d)
Week 2: Task expenses = 460 worker-hours
Cumulative
Planned Cost Actual Cost
Week (BCWS) Actual Cost (ACWP)
1 400 420 420
2 400 460 880
470
460
450
Cost (in worker-hours)

440
430
420
410
400
390
380
370
1 2 3 4
Week

Is the task “out of control”?

Control System Example (cont’d)
Week 3: Task expenses = 500 worker-hrs
Planned cost Actual cost Cumulative cost
Week (worker-hours) (worker-hours) (worker-hours)
1 400 420 420
2 400 460 880
3 400 500 1380

600

500

400
Worker-hours

300

200

100

0
1 2 3 4
Week

Is the task “out of control”?

Earned Value Analysis
• Integrates cost, schedule, and work performed
• Based on three metrics that are used as the basic
building blocks:

BCWS: Budgeted cost of work scheduled

ACWP: Actual cost of work performed
BCWP: Budgeted cost of work performed
Schedule Variance (SV)

Schedule Variance (SV) = difference between value of

work completed and value of scheduled work

Schedule Variance (SV) = Earned Value - Planned Value

= BCWP - BCWS
Cost Variance (CV)

Cost Variance (CV) = difference between value of

work completed and actual
expenditures

Cost Variance (CV) = Earned Value - Actual Cost

= BCWP - ACWP
Earned Values Metrics Illustrated
Planned Value
Present time (BCWS)
BAC
Worker-Hours

Actual Cost
(ACWP)
Cost Variance
(CV)
Earned Value
(BCWP)
Schedule Variance
(SV)

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6

Relative Measure: Schedule Index

Schedule Index (SI ) = BCWP

BCWS

If SI = 1, then task is on schedule

If SI > 1, then task is ahead of schedule
If SI < 1, then task is behind schedule
Relative Measure: Cost Index

Cost Index (CI) = BCWP

ACWP

If CI = 1, then work completed equals

payments (actual expenditures)
If CI > 1, then work completed is ahead
of payments
If CI < 1, then work completed is behind
payments (cost overrun)
Example #2
W E E K
1 2 3 4 5 6 7 8 9 10

Task A (36 worker-hrs)

6 6 6 8 10

Task B (36 worker-hrs)

12 12 12

Task C (56 worker-hrs)

10 10 12 12 12

Weekly
Scheduled
Worker-Hrs
Cumulative 6 6 6 20 22 22 10 12 12 12
Scheduled
Worker-Hrs
(BCWS) 6 12 18 38 60 82 92 104 116 128
Example #2 (cont’d)
Progress report at the end of week #5:

Cumulative Percent of Work Completed:

Week 1 2 3 4 5
Task A 15% 30% 40% 60% 80%
Task B 25% 65%
Task C Not started yet

Worker-Hours Charged to Project:

Week 1 2 3 4 5
Task A 5 6 8 10 10
Task B 15 10
Task C Not started yet
Example #2 (cont’d)
Progress report at the end of week #5:

W E E K
1 2 3 4 5 6 7 8 9 10
Cumulative
Scheduled
Worker-Hrs
(BCWS) 6 12 18 38 60 82 92 104 116 128
Actual Worker-
Hrs Used
(ACWP) 5 11 19 44 64
Earned Value
(BCWP) 5.4 10.8 14.4 30.6 52.2
Schedule
Variance (SV) -0.6 -1.2 -3.6 -7.4 -7.8
Cost Variance
(CV) 0.4 -0.2 -4.6 -13.4 -11.8
Example #2 (cont’d)
140
BAC

120
BCWS

100
Performance Metric

80
Cost
Variance
Schedule
60
Variance

ACWP
40

BCWP

20

0
1 2 3 4 5 6 7 8 9 10
Week
Using a Fixed 20/80 Rule
Cumulative Percent of Work Completed:

Week 1 2 3 4 5
Task A 20% 20% 20% 20% 20%
Task B 20% 20%
Task C Not started yet

W E E K
1 2 3 4 5 6 7 8 9 10
Cumulative
Scheduled
Worker-Hrs
(BCWS) 6 12 18 38 60 82 92 104 116 128
Actual Worker-
Hrs Used
(ACWP) 5 11 19 44 64
Earned Value
(BCWP) 7.2 7.2 7.2 14.4 14.4
Schedule
Variance (SV) 1.2 -4.8 -10.8 -23.6 -45.6
Cost Variance
(CV) 2.2 -3.8 -11.8 -29.6 -49.6
Using a Fixed 20/80 Rule
140

120

100
Cost (in Worker-hours)

80
BCWS
ACWP
60

40

BCWP
20

0
1 2 3 4 5 6 7 8 9 10
Week
Updating Forecasts: Pessimistic Viewpoint

Assumes that rate of cost overrun will continue

for life of project….

Estimate at Completion (EAC) = ACWP BAC = 1 BAC .

BCWP CI

= (64/52.2) 128 = 1.23 x 128 = 156.94 worker-hrs

Updating Forecasts: Optimistic Viewpoint

Assumes that cost overrun experienced to date

will cease and no further cost overruns will be
experienced for remainder of project life…

Estimate at Completion (EAC) = BAC - CV = 128 + 11.8 = 139.8 worker -hrs .

Multi-tasking with Multiple Projects

How to prioritize your work when you have multiple

projects and goals?

Consider two projects with and without multi-tasking

Project A Project B

A-1 B-1 A-2 B-2 A-3 B-3 A-4 B-4

Due-Date Assignment with Dynamic Multiple Projects

• Projects arrive dynamically (common situation for both

manufacturing and service organizations)
• How to set completion (promise) date for new projects?
• Firms may have complete control over due-dates or only partial
control (i.e., some due dates are set by external sources)
• How to allocate resources among competing projects and tasks (so
that due dates can be realized)?
• What are appropriate metrics for evaluating various rules?
 What Does the Research Tell Us?
• Study by Dumond and Mabert* investigated four due date assignment
rules and five scheduling heuristics
• Simulated 250 projects that randomly arrive over 2000 days
• average interarrival time = 8 days
• 6 - 49 tasks per project (average = 24); 1 - 3 resource types
• average critical path = 31.4 days (range from 8 to 78 days)
• Performance criteria: 1) mean completion time
2) mean project lateness
3) standard deviation of lateness
4) total tardiness of all projects
• Partial and complete control on setting due dates
* Dumond, J. and V. Mabert. “Evaluating Project Scheduling and Due Date Assignment Procedures:
An Experimental Analysis” Management Science, Vol 34, No 1 (1988), pp 101-118.
Experimental Results

• No one scheduling heuristic performs best across all due date

setting combinations
• Mean completion times for all scheduling and due date rules not
significantly different
• FCFS scheduling rules increase total tardiness
• SPT-related rules do not work well in PM (SASP)
• Best to use more detailed information to establish due dates
Project Management Maturity Models

• Methodologies to assess your organization’s current level of

PM capabilities
• Based on extensive empirical research that defines “best
practice” database as well as plan for improving PM process
• Process of improvement describes the PM process from
“ineffective” to “optimized”
• Also known as “Capability Maturity Models”
PM Maturity Model Example*
1) Ad-Hoc The project management process is described as disorganized, and occasionally
even chaotic. Systems and processes are not defined. Project success depends on individual
effort. Chronic cost and schedule problems.
2) Abbreviated: Some project management processes are established to track cost, schedule,
and performance. Underlying disciplines, however, are not well understood or consistently
followed. Project success is largely unpredictable and cost and schedule problems are the norm.
3) Organized: Project management processes and systems are documented, standardized, and
integrated into an end-to-end process for the company. Project success is more predictable.
Cost and schedule performance is improved.
4) Managed: Detailed measures of the effectiveness of project management are collected and used
by management. The process is understood and controlled. Project success is more uniform.
Cost and schedule performance conforms to plan.
5) Adaptive: Continuous improvement of the project management process is enabled by feedback
from the process and from piloting innovative ideas and technologies. Project success is the
norm. Cost and schedule performance is continuously improving.

* source: The Project Management Institute PM Network (July, 1997), Micro Frame Technologies, Inc. and
Project Management Technologies, Inc. (http://pm32.hypermart.net/)