08.

Project Management
Program Resource
Allocation
Project Management
MB63C4
Semester 5, 2017-2018

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 Resource Allocation

Scope

Resource allocation, loading, leveling

Expediting and crashing projects
PROJECT
RESOURCE SCHEDULE:
Types of project boundaries
Time Cost Classification of scheduling problems
The method of allocating resources
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 Definitions
BASIC CONCEPT
• Resource allocation permits efficient use of physical assets
• Within:
• a project,
• or across multiple projects
• Drives characteristics of:
• the identification of resources,
• and timing of their application

The general two conditions

“Normal” “Crashed”

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1. 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

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 The Resource Allocation Problem

Schedules should be evaluated: Measure of the project

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

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 The Resource Allocation Problem
• The extreme points of the relationship between time use and resource
use are these:

TIME LIMITED RESOURCE LIMITED

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

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 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

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 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

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Figure, Resource Usage Calendar

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2.
Resource Leveling

• Resource leveling aims to minimize the period-by-period variations in

resource loading by shifting tasks within their slack allowances
• The purpose is to create a smoother distribution of resource usage
• Several advantages include:
• Less day-to-day resource manipulation needed
• Better morale, fewer HR problems/costs
• Leveling resources also levels costs, simplifies budgeting and funding

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 Resource Leveling
• When resources are leveled, the associated costs also tend to be
leveled
• The project manager must be aware of the cash flows associated with
the project and of the means of shifting them in ways that are useful
to the parent firm
• Resource leveling is a procedure that can be used for almost all
projects, whether or not resources are constrained

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 Figure, Resource Leveling

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 Figure, Resource Leveling

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 Figure, Resource Leveling

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 Network Before and
After Resource Loading,

Duration

Qty Reqd.

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Resource Loading Chart

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3.
Constrained Resource Scheduling

Two fundamental
approaches to
o Heuristic Methods
constrained allocation o Optimization Models
problems:

• Heuristic approaches employ rules of thumb that have been found to

work reasonably well in similar situations
• Optimization approaches seek the best solutions but are far more limited
in their ability to handle complex situations and large problems

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 Examples of Simple Heuristics
1. ASAP
2. As late as possible (do not engage in anything unless you have to)
3. SPT (shortest processing time – good to reduce congestion)
4. Most resources first (most requested resources first)
5. Minimum slack first (critical jobs go first to avoid lead time delays)
6. Most critical followers (most critical jobs that go after you, many jobs
depend on that resource)
7. Most successors
8. Arbitrary
9. Combination of the above (compound rules).

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 Examples of Complex Heuristics
• Simulated annealing
• Tabu search
• Genetic algorithms
• Greedy search with branch and bound

In the graduate course Advanced Production Planning & Scheduling,

focuses on scheduling heuristics.

It is good to know that they exist.

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Multiproject Scheduling and Resource Allocation

• The most common approach to scheduling and allocating resources to

multiple projects is to treat the several projects as if they were each
elements of a single large project
• Another way of attacking the problem is to consider all projects as
completely independent
• To describe such a system properly, standards are needed by which to
measure scheduling effectiveness

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Multiproject Scheduling and Resource Allocation

• Much more difficult.

• May rely on an index called
TRPT: (Total Remaining Processing Time)
• Based on the critical ratio.

• Among all the projects under your control, look at all the jobs of all the
projects.
• Find out which are most critical.

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Multiproject Scheduling and Resource Allocation

• Most critical... How do you know?

• Based on the amount of time before due date and the total amount of processing
time remaining to be completed.

• This ratio is simple but helpful.

• Critical Ratio = TRPT (Total Remaining Processing Time)
TRT (Total Remaining Time)

• The smaller the ratio, the more critical it is, more entitled to earlier
allocation of resources.
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Multiproject Scheduling and Resource Allocation
• Based on this, you can do multiple project scheduling.
• Most critical tasks should be the first to be assigned resources.
• This doesn’t mean that job will be assigned the resource first.
• Why? The resource in need may not be available.
• You can get first priority to claim it, but you may not get the first assignment.
• You may get preference due to the type of resource that you need.

• In case you have multiple projects, you have some way to do it.

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Multiproject Scheduling and Resource Allocation
• Three important parameters affected by project scheduling are:
1. Schedule slippage
2. Resource utilization
3. In-process inventory
• The organization (or the project manager) must select the criterion most
appropriate for its situation.

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Multiproject Scheduling and Resource Allocation
• Schedule slippage (how much delay it has caused or it will cause) - often
considered the most important of the criteria, is the time past a project’s
due date or delivery date when the project is completed
• Resource utilization is of particular concern to industrial firms because of
the high cost of making resources available (the more utilization the better,
the resource requirements become lower)
• WIP (to see how smooth your workflow is) concerns the amount of work
waiting to be processed because there is a shortage of some resource

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Multiproject Scheduling and Resource Allocation

• All criteria cannot be optimized at the same time

• As usual, the project manager will have to make trade-offs among the
criteria
• A firm must decide which criterion to evaluate its various scheduling and
resource allocation options

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“Cost, Schedule, or Performance: Pick Any Two .
. .”
• Assuming fixed performance specifications, tradeoff areas must be in
time or cost
• Time-limited or resource-limited
• If all three dimensions are fixed, the system is “overdetermined”
• Normally, no tradeoffs are possible
• But, something has to give . . .

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Example: Project Crashing
• Compute cost/time slope for each expredictable activity

crash cost – normal cost

Slope =
normal time – crash time

• Slope is the cost of crashing the project for the potential (or
estimated) crashing time.

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 Example and illustrations

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An Example (Table )
Activity Predecessor Days Cost
(normal, crash) (normal, crash)
a - 3, 2 40, 80
b a 2, 1 20, 80
c a 2, 2 20, 20
d* a 4, 1 30, 12
e** b 3, 1 10, 80

* Partial crashing allowed

** Partial crashing not allowed
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