Chapter 9

Allocating Resources
to the Project
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 Managing Resources
 CPM is NOT actually a resource allocation method.
 Time is viewed as a resource.
 Trade-offs between time and other resources are major
problems in resource management.
 ADM/PERT and PDM/CPM are there to estimate activity
times under the assumptions of resource loading that are
assumed as ‘normal practice’.
 Careful planning is required while expediting (CRASHING)
the project.
 Difficulties notwithstanding, the PM must remain prepared
Critical Path Method—Crashing a Project
 Time and cost are interrelated
 The faster an activity is completed, the more
it costs
 Change the schedule and you change the
budget
 Thus many activities can be speeded up by
spending more money

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 What is Crashing?
 To speed up, or expedite, a project
 Of course, the resources to do this must be available
 Crashing a project changes the schedule for all
activities
 This will have an impact on schedules for all the
subcontractors
 Crash Cost --
 In CPM, an activity can be conducted at a normal pace or
at an expedited pace, known as crashing, at a greater cost

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 Activity Slope

Crash Cost - Normal Cost

Slope 
Crash Time - Normal Time

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An Example of Two-Time CPM

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table_09_01
 Activity Slopes
Cost per Period for Crashing

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Crashing the Project

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Seven Day Schedule

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Six Day Schedule

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Five Day Schedule

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Four Day Schedule

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fig_09_01
Cost-Crash Curve

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 Other Methods of Crashing
 Rush& Blitz
 Mostly to deal with optimal utilization of resources with a
view to hasten the completion of linked activities. For
details refer to Table 9-3

 Fast Track
 Usually related to construction project. Activities can
commence concurrently. In this process design and build
phases of the project usually overlap each other. This is a
time saving technique. It entails detailed planning coupled
with intimate supervision and acute involvement of PM.
unfig_09_01 Solve the problem
Find the lowest cost to complete
the project in 10 days
unfig_09_02
Answer
# Current time and cost: 12 days and $ 210
# Cut e two days at a cost of 60 thus project cost would be $ 270
The Resource Allocation Problem
 As discussed, CPM/PERT ignore resource utilization
and availability
 With external resources, this may not be a problem
 It is, however, a concern with internal resources
 Schedules need to be evaluated in terms of both time
and resources

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 Resource Allocation
 It is common to see the resource allocation problem
in terms of manpower, but it can apply to equipment
and capital as well

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 Resource Loading
 Resource loading describes the amount of
resources an existing schedule requires
 Gives an understanding of the demands a
project will make of a firm’s resources

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Example – Resource Loading
fig_09_04
fig_09_05
Resource A

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Resource B

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fig_09_06
 Resource Leveling
 Less hands-on management is required
 May be able to use just-in-time inventory
 Improves morale
 Fewer personnel problems

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fig_09_07
 Resource Leveling Continued

 When an activity has slack, we can move that

activity to shift its resource usage
 May also be possible to alter the sequence of
activities to levelize resources
 Small projects can be levelized by hand
 Software can levelize resources for larger projects
 Large projects with multiple resources are very
complex to levelize

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Constrained Resource Scheduling

Heuristic An approach, such as a

Approach rule of thumb, that yields
a good solution that may
or may not be optimal.

Optimization An approach, such as

Approach linear programming, that
yields the one best
solution.
 Heuristic Methods
 The only feasible way on large projects
 While not optimal, the schedules are very good
 Take the CPM/PERT schedule as a baseline
 They sequentially step through the schedule trying to
move resource requirements around to levelize them
 Resources are moved around based on one or more
priority rules

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 Common Priority Rules
 As soon as possible
 As late as possible
 Shortest task first
 Most resources first
 Minimum slack first
 Most critical followers
 Most successors
 Arbitrary

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 Heuristic Methods
 As soon as possible --- General solution for CP and time
 As Late as Possible --- To defer cash outflows as long as
possible
 Shortest Tasks Firsts --- Tasks are ordered in terms of duration
 Most Resources First --- Important tasks first since they
demand equally important resources
 Minimum slack first --- Opposite of shortest tasks firsts. By far the best. Generally
resulting in minimum schedule slippage, minimum resource
idle time, and minimum in-process inventory
 Most Critical Followers -- The ones with the greatest number of
critical followers
 Most Successors --- Same as most critical followers
 Arbitrary --- Locally adopted rules
 Optimization Methods
 Finds the one best solution
 Uses either linear programming or
enumeration
 Not all projects can be optimized
 Approaches only work with small to medium
projects

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Multi-Project Scheduling and Resource
Allocation
 Scheduling and resource allocation problems increase with
more than one project
 The greater the number of projects, the greater the problems
 One way is to consider each project as part of a much larger
project
 However, different projects have different goals so combining
may not make sense

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