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6/Allocating Resources to the Project

Chapter 6
Allocating Resources to the Project
This chapter extends the previous one on scheduling into the area of allocating resources
among the activities of a project, or among multiple projects competing for the same
resources. The chapter begins with a discussion of expediting project completion times
and highlights that by selectively choosing which activities to crash and by how much,
we can determine the minimum cost for all possible project completion time. The use of
Excels Solver optimization routine to facilitate this analysis is also presented. Next, the
chapter moves on to the topic of resource loading and in particular highlights the
problems of overscheduling resources. The topics of resource leveling and resource
allocation naturally follow in the subsequent sections. Finally, the chapter concludes with
an overview of several of the concepts Goldratt raises in his provocative book Critical
Chain.

Cases and Readings


A case appropriate to the subject of this chapter is:
Harvard: 9-613-020 Space Constructors, Inc. This 3-page case involves a simple
project where partial crashing has already been planned but more, and less, crashing is
also to be considered. The network has some special characteristics that offer some
worthwhile lessons for the student.

Answers to Review Questions


1. There can be a variety of reasons why resource allocation is of concern to the PM
despite having a properly completed action plan. For example, often the action plan
only lists general categories of resource requirements such as engineering,
purchasing, marketing, and production. In these cases, the project manager must still
arrange to get the specific resources (e.g., personnel) needed. Furthermore, the action
plan may only specify how much of the resource is needed and precedence between
the activities relationships, it may not specify exactly when the PM will need these
resources. Finally, although the action plan specifies the amount of a resource needed
for a particular project, there may not be a mechanism in use that balances the load of
resources across multiple projects. This can lead to conflicts and the creation of
bottleneck resources.
2. A project with a fixed delivery date can vary the level of resources used to meet a
firm project completion date. A project with a fixed limit on resource usage cannot
obtain additional resources but can possibly delay the project completion date. The
reason this distinction is important is that it specifies which of the fundamental trade-

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6/Allocating Resources to the Project

offs the project manager can exercise. In the case of projects with fixed delivery
dates, only performance and cost (resource usage) can be varied. In projects with
fixed resource usage levels, only schedule and performance can be varied.
3. Fast-tracking is a technique whereby key stages of the project are overlapped. In the
construction industry, this might entail beginning construction before the design and
planning are finished. In the pharmaceutical industry this may entail developing the
production process as the new drugs are being developed and tested.
4. Information that should be entered into a resources calendar include the resources
availability (e.g., days in week available, total hours available per week, hours
available each day), times the resource will not be available (e.g., lunch, weekends,
holidays, vacations, scheduled maintenance), and resource cost (e.g., cost per unit of
usage, cost for overtime and overuse, known changes in future resource cost).
5. In project oriented firms there is much more uncertainty about the timing of resource
needs since the resources primarily move between projects rather than moving
between projects and a functional department. Therefore, extra resource capacity is
needed as a buffer given the greater level of uncertainty present.
6. Although the arrival and departure times may be carefully scheduled, we all know
that actual arrivals and departures often deviate significantly from these schedules.
Therefore, a significant amount of uncertainty is present and greatly complicates the
ability of the airport control system to handle arrivals and departures. Indeed
unplanned events (e.g., weather delays, equipment malfunctions, late flight crews,
and so on) often cascade through the system further compounding the problem.
Therefore, excess capacity in control towers is needed as a buffer given this level of
uncertainty. Clearly, the cost of not having this capacity greatly exceeds the cost of
some idle capacity.
7. The PM that is short of secretarial resources does not face that great of a problem as
this type of resource is relatively abundant and not usually critical to the projects
ultimate success or failure. The PM that is short of a Walt faces a much more
daunting problem because a Walt is a scarce resource that is important to the projects
successful completion and there are no readily available substitutes for a Walt.
8. One reason it is important to ensure the resource calendars are on the same time base
is because task duration is not usually dictated by the number of labor hours required
to complete the task, but rather by the calendar time required to complete it.
9. The three criteria are schedule slippage, resource utilization, and in-process inventory.
Schedule slippage measures the delay suffered by projects as a result of the
application of a resource allocation priority rule. Resource utilization is a measure of
the total resource cost (including costs such as the cost of hiring, firing, and
maintaining resource inventories) under different allocation rules. In-process
inventory cost is a measure of the amount of unfinished work in the system.

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10. In a job shop allocating resources (equipment and workers) to jobs or orders is
required. In projects, a similar allocation is required where specific resources must be
allocated to tasks and activities which represent the jobs.
11. The student syndrome refers to situations in which people wait until the last
possible minute to begin a task. Its name is derived from the belief that students often
delay the start of an assignment until just before it is due.

Suggested Answers to Discussion Questions


12. The fundamental trade-off in crashing a project is between schedule and budget.
Specifically, crashing entails employing additional resources (cost) in order to reduce
the projects completion time. If it is decided to crash a project other trade-offs may
be necessary in terms of the completion time of other projects and perhaps the
performance of this and other projects.
13. The main advantages of labor pools versus dedicating workers to specific projects
are less waiting time for key resources, the ability to level resource usage, and the
ability to substitute one worker for another should one become unavailable. Potential
drawbacks include workers who do not identify with a particular project and who
may not be well trained in specific tasks required by the assignment. Further, there
are fewer opportunities for job enlargement. All of these may lead to lower levels of
job satisfaction, as well as lower morale and motivation.
14. Starting a task as late as possible preserves resources and delays cash flows as long as
possible. Allocating resources to tasks with the shortest durations first maximizes the
number of tasks that can be completed within a certain time period. The minimum
slack priority rule is used to minimize the number of late activities.
15. Just as a project consists of tasks and activities with precedence relationships, a
superproject can be thought of as consisting of a group of projects with precedence
relationships. In the superproject, psuedoactivities are used to show the precedence
relationships among the projects. These precedence relationships may be actual
technological constraints (e.g., the product development project must be completed
before the process development project) or simply a reflection of managements
priorities. The reason for creating a superproject is to help identify important
relationships and dependencies across the projects and use this information to better
plan the usage of key resources.
16. Traditionally, in project management the concept of the critical path is used. More
specifically, the critical path is defined as the path(s) that if delayed will delay the
completion of the entire project. One shortcoming of the critical path approach is that
it only considers task precedence information and does not consider issues related to
resource usage. The critical chain addresses this concern and considers both technical
precedence relationships as well as the resources that will be used to complete the

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tasks. Therefore, the critical chain refers to the longest chain of consecutively
dependent events including both technological as well as resource dependencies.
The critical chain works by defining two sources that can delay the completion of
the project. One source of delay is uncertainty in the tasks that comprise the critical
chain. A project buffer is added to guard against these uncertainties. The second
source of delay is uncertainty in the tasks external to the critical chain. A feeding
buffer is added to these paths to help ensure they do not delay the tasks on the critical
chain.
17. In this case it would be best to borrow from project A. According to Figure 6-20, as a
Type 1 project, fewer resources will have little impact on project As performance as it
nears completion. Conversely, as a Type 2 project, taking resources away from
project B as it nears completion will dramatically reduce its performance.
18. There is a delicate balance between setting goals that people believe are impossible to
achieve and therefore result in demotivating the team versus stretch goals that really
push the team and serve to motivate the team. The project manager should not set
goals that have extremely low probabilities of success, but may find it desirable to set
goals that do have a reasonable chance of not being met (say 40 to 60 percent).

Solutions to Problems
19.
a.

b. Project Duration = 14 days, critical path A-C-D-E-G

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c. Resources X and W are over utilized

d. Project Duration after leveling = 17 days. The critical path is A-C-D-F-G.

e. Adding an additional X resource would shorten the project by 2 days, the new duration
after leveling only the W resource would be 15 days.

The project duration is 13 days when the resources work weekends and after leveling.

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20.
a.
4

A
1

3
B

G
H

C
F

The critical path is B-C-E-H. The project duration and cost for the all normal level of
project activity is 20 days and $400, respectively.
b. The crash costs per day for all activities are shown in column F.
A
4
5
6
7
8
9
10
11
12
13

Activity
a
b
c
d
e
f
g
h

B
Normal
Time
5
4
7
2
3
8
5
6

C
Normal
Cost
$50
$40
$70
$20
$30
$80
$50
$60

D
Crash
Time
3
2
6
1

E
Crash
Cost
$150
$200
$160
$50

F
Crash
Cost/Day
50
80
90
30

5
4
3

$290
$100
$180

70
50
40

c. The spreadsheet below was created to find the optimal way of getting to an 18-day
delivery time. As shown, the total normal cost is $400 (cell C14) and the total crash cost
is $80 (cell I14) for a total project cost of $480 (cell B2). The 18 day duration was
achieved by crashing activity H 2 days (cell H13).
A
1 Deadline:
2 Total Cost:
3
4
Activity
5
6
a
7
b
8
c
9
d
10
e
11
f
12
g
13
h
Total
14
15
16
Node
17
18
2
19
3
20
4
21
5
22
6

B
18
$480

Normal
Time
5
4
7
2
3
8
5
6

Normal
Cost
$50
$40
$70
$20
$30
$80
$50
$60
$400

Crash
Time
3
2
6
1

Crash
Cost
$150
$200
$160
$50

5
4
3

$290
$100
$180

Crash Max Crash


Amt
Crashing
Cost/Day
Amt
to Crash
Cost
50
2
0.0
0.0
80
2
0.0
0.0
90
1
0.0
0.0
30
1
0.0
0.0
0
0.0
0.0
70
3
0.0
0.0
50
1
0.0
0.0
40
3
2.0
80.0
$80

Event
Time
4
11
13
14
18

83

Actual
Time
5
4
7
2
3
8
5
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6/Allocating Resources to the Project

The optimal solution using Solver was found in the following way:
Cell I14 was specified as the target cell to minimize.
The ranges H6:H13 and B18:B22 were specified as the changing cells.
The following constraints were added:
H6:H13 < G6:G13 (maximum amount each activity can be crashed)
B18 > J7 (node 2)
B19 > B18 + J8 (node 3)
B19 > J6 (node 3)
B20 > B19 + J9 (node 4)
B21 > B18 + J11 (node 5)
B21 > B19 + J10 (node 5)
B22 > B20 + J12 (node 6)
B22 > B21 + J13 (node 6)
B22 < B1 (node 6 project deadline)
H6:H13 > 0 and B18:B22 > 0 (all decision variables must be > 0)
The Assume linear model check box was also selected.
d. The optimal 16-day project duration can be found by entering 16 in cell B1 and then
resolving using Solver. The optimal solution calls for crashing activity H 3 days, B 1 day,
and D 1 day. The cost of completing the project in 16 days is $400 + $230 = $630.
e. If all activities are crashed as much as possible, the project can be completed in 14
days. Entering 14 in cell B1 and resolving, it is discovered that the project can be
completed in 14 days at a cost of $400 + $ 400 = $800.
f. See solutions to c e above.
21.
Activity Duration Successors Critical Followers Slack
A
4
D
D
6
B
3
C, D
C, D
0
C
7
D
D
0
D
5
None
None
0
a.
b.
c.
d.

Task B has the shortest duration.


Tasks B, C, and D all have zero slack.
Task B has the largest number of critical followers
Task B has the largest number of successors.

22.
Activity Slack Followers Critical Followers Duration Latest Start Time
C
3
F, I
None
3
8
D
2
G, H, J
H, J
4
7

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6/Allocating Resources to the Project

a. D has the least amount of slack and therefore would get the facility first using
this rule.
b. D has the most followers and would get the facility first.
c. D has the most critical followers and would get the facility first.
d. C has a smaller duration and would get the facility first.
e. With the as late as possible priority rule, the latest start times are used. In
this case activity C has a LST of 8 and D has a LST of 7. In using this rule it
only makes sense to assign the facility to the resource with the earliest LST or
activity D.

Incidents for Discussion Suggested Answers


PenquinNet Software Engineering Company: The project manager will need to know
all the activities, their normal times and precedences, their resource requirements (by
group, learning curve applied, and by time period), the resource capacity and availability,
and the individual resource costs. She should then employ the CPM program in a
simulation mode to see how the resource allocations will appear under normal
circumstances (her original estimate). Then, she should check the performance if there
are project delays, learning curve slow downs, etc. Next, she should see if moving
resources among activities to level the resources might improve the projects completion
time. She should also see if substituting more experienced additional resources would
improve the projects performance. She must also identify the additional cost for all the
different circumstances.
Southern Kentucky University Bookstore: No. The projects are not combined and the
minimum slack on one may receive resources when its slack is more than the minimum
slack on another project. Also, the interactions between these projects are important and
must be accounted for by scheduling this as a multiproject plan. Peak resource loads
need to be determined in advance and leveled. The overall project schedule should be
determined with the resource utilization of each area in mind.

Suggested Case Analyses and Solutions


St. Dismas Assisted Living Facility Resource Usage Part IV
Teaching Purpose: In this installment students are required to develop Gantt charts for the
resources and prepare a resource calendar using MSP.
1. Prepare a Gantt chart with resources for the action plan Dr. Alison submitted. Begin
this project on January 2. Prepare a resource calendar for Dr. Alison.
The following is the Gantt chart of the action plan presented in the case. This Gantt
chart was prepared using MSP with a resource calendar for Dr. Alison and Dr. Link
with a workweek of Monday through Friday, and a daily schedule of 8 a.m. to 5 p.m.
with an hour of non-working time for lunch. The resource calendar was applied

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6/Allocating Resources to the Project

using the Change Working Time under the Tools menu in MSP. (The issue of
scheduling the Test of the assessment tool will be addressed in answer #3 & #4).
(Note: the case stated to start the project on January 2, if students use the year 2000,
the project will actually begin work on January 3rd, as January 2nd is a non-working
day. If students use January 2, 2001 (or later), the project will start on January 2nd.
The start date used in these examples is January 2, 2000, to coincide with the year
that the case started.)

The following is the standard resource calendar used for Dr. Alison for all of the
tasks defined by the action plan. Since the case outlined that a resource
scheduling conflict would only pertain to the task of Testing the assessment
tool, it is not appropriate to constrain Dr. Alison on the project for any other
tasks. (The following printout excerpt was prepared using the Reports feature in
MSP). The issue of how to handle the specific scheduling constraint will be
addressed in answer #3 below.

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2. How would you handle Dr. Alisons resource problem?


The resource issue that Dr. Alison has should be handled by adjusting the project
schedule to allow for the scheduling constraints.
The case states that Dr. Alison can perform all of the project steps within his 8 a.m. to
5 p.m. normal work week, however he will only be able to perform the Test of the
assessment tool during his administrative time on Wednesdays from 8 a.m. to 12
p.m. Since that step is important to the success of the project, it is necessary to adjust
the project plan to reflect Dr. Alisons scheduling conflict. It is not appropriate to add
another resource, or overallocate Dr. Allison to get this task done within the time
frame specified.
There are several different ways to set a resource constraint on the Test the tool
task, Step #4 in the action plan. MSP 2000 allows you to create a specific calendar
for a step in an action plan. Simply create a New calendar in the Tools menu,
Change working time section. In the new calendar create a schedule that has its
working time as Wednesdays, 8 a.m. to 12 p.m., and all other days as non-working.
Then you apply this calendar to step 4 in the action plan. (This is done by selecting
the task information box for Step #4, going to the Advanced tab, and selecting the
new calendar you just created. These steps are all outlined in the Help section, under
Assigning a calendar to a task.) Once you apply the new calendar, MSP will
automatically adjust the Gantt chart to reflect the changes in the schedule. [If
students are using MSP98, the schedule constraint can be incorporated into the
project by adjusting Dr. Alisons resource calendar for only the time period that this
step takes place (Jan 19 Jan 26).]
3. Given Dr. Alisons availability, how long will it take to complete testing of the
assessment tool?
Based on Dr. Alisons availability to complete the step Test of the assessment tool,
Step #4 will now take from January 19, 2000 January 26, 2000. Please note that the
tasks duration remains at 6 hours, however with Dr. Alison only available to work on
the step from 8 a.m. 12 p.m. one day a week, the step will now take an extra
calendar week to complete. Without the constraint the task could begin as soon as
Step #3 was completed, January 14. However, with the constraint applied, Step #4
can not begin until the following Wednesday when Dr. Alison is available, and he can
only work 4 hours on that day, so another 2 hours the following Wednesday is
necessary to complete the task.
4. Prepare a Gantt chart for Dr. Alisons plan incorporating any changes you
recommend.
The Gantt chart below shows the scheduling changes adjusted for the availability of
Dr. Alison to complete step #4 in the action plan.

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6/Allocating Resources to the Project

or with a more detailed view of the calendar

Charter Financial Bank


Teaching Purpose: This case provides students with opportunity to evaluate alternative
crashing strategies.
1. What is the cost of completing this project if no overtime is used? How long will it
take to complete the project?
The network diagram shown below can be constructed from the information in the
case. The time to complete the project at a normal level of activity is 43 days and the
cost is $100,650.
Test

DB

Benchmarking

Plan

Design

Pages
Forms

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6
7

8
e
s
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6/Allocating Resources to the Project

2. What is the shortest amount of time in which the project can be completed? What is
the cost of completing the project in the shortest amount of time?
When all the activities are crashed their maximum amount, the project is completed in
30 days. In the spreadsheet below, Solver was used to find the least costly way to
crash the project such that it was finished in 30 days. Column H details the amount
each activity was crashed. The incremental cost required to shorten the project these
13 days is $26,250 (cell I13).
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

A
Deadline:
Total Cost:

Activity
Benchmark
Plan
Design
Database
Webpages
Forms
Test
Total

Node
2
3
4
5
6
7
8

B
30
$126,900
Normal
Time
10
5
15
10
10
7
3

Normal Crash Crash


Crash Max Crash
Amt
Crashing Actual
Cost
Time Cost Cost/Day
Amt
to Crash
Cost
Time
$15,000
7
$18,750
1250
3
3.0
3750.0
7
$3,750
3
$4,500
375
2
2.0
750.0
3
$45,000
10 $58,500
2700
5
5.0
13500.0
10
$9,000
7
$11,250
750
3
2.0
1500.0
8
$15,000
8
$19,500
2250
2
2.0
4500.0
8
$8,400
7
0
0.0
0.0
7
$4,500
2
$6,750
2250
1
1.0
2250.0
2
$100,650
$26,250

Event
Time
7
10
20
28
28
27
30

Using Solver required the following steps:


Cell I13 was specified as the target cell to minimize.
The changing cells included the ranges I6:I12 and B17:B23.
In addition to specifying Assume linear model the following constraints were
entered:
H6:H12 < G6:G12 (limit on the amount each activity can be crashed)
B17:B23 > 0 & H6:H12 > 0 (nonnegativity constraints)
B17 > J6 (node 2)
B18 > B17 + J7 (node 3)
B19 > B18 + J8 (node 4)
B20 > B19 + J9 (node 5)
B20 > B21 (node 5)
B20 > B22 (node 5)
B21 > B19 + J10 (node 6)
B22 > B19 + J11 (node 7)
B23 > B20 + J12 (node 8)
B23 < B1 (deadline specified)
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3.

Suppose that the benchmarking study actually required 13 days as opposed to the 10
days originally estimated. What actions would you take to keep the project on a
normal schedule?
The spreadsheet presented in question 2 can be modified such that the benchmarking
studys normal and crash times are now 13 days implying that this task can no longer
be crashed. Then the spreadsheet can be resolved using Solver and specifying a
deadline of 43 days. As shown in the spreadsheet, below the project can still be
completed in 43 days by crashing the Plan task by 2 days and the Test task by 1 day.
The cost of crashing these two tasks will increase the project cost by $3,000.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

A
Deadline:
Total Cost:

Activity
Benchmark
Plan
Design
Database
Webpages
Forms
Test
Total

Node
2
3
4
5
6
7
8

B
43
$103,650
Normal
Time
13
5
15
10
10
7
3

Normal Crash Crash


Crash Max Crash
Amt
Crashing Actual
Cost
Time Cost Cost/Day
Amt
to Crash
Cost
Time
$15,000
13 $18,750
0
0.0
0.0
13
$3,750
3
$4,500
375
2
2.0
750.0
3
$45,000
10 $58,500
2700
5
0.0
0.0
15
$9,000
7
$11,250
750
3
0.0
0.0
10
$15,000
8
$19,500
2250
2
0.0
0.0
10
$8,400
7
0
0.0
0.0
7
$4,500
2
$6,750
2250
1
1.0
2250.0
2
$100,650
$3,000

Event
Time
13
16
31
41
41
41
43

4. Suppose the President wanted the website launched in 35 days. What actions would
you take to meet this deadline? How much extra would it cost to complete the project
in 35 days?
The spreadsheet presented in question 2 can again be modified. This time 35 is
entered in cell B1 and the problem resolved with Solver. Column H in the
spreadsheet below details the amounts the various activities should be crashed to meet
the 35-day deadline. The extra cost of reducing this project 8 days (43 35) is
$12,150.

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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

A
Deadline:
Total Cost:

Activity
Benchmark
Plan
Design
Database
Webpages
Forms
Test
Total

Node
2
3
4
5
6
7
8

B
35
$112,800
Normal
Time
10
5
15
10
10
7
3

Normal Crash Crash


Crash Max Crash
Amt
Crashing Actual
Cost
Time Cost Cost/Day
Amt
to Crash
Cost
Time
$15,000
7
$18,750
1250
3
3.0
3750.0
7
$3,750
3
$4,500
375
2
2.0
750.0
3
$45,000
10 $58,500
2700
5
2.0
5400.0
13
$9,000
7
$11,250
750
3
0.0
0.0
10
$15,000
8
$19,500
2250
2
0.0
0.0
10
$8,400
7
0
0.0
0.0
7
$4,500
2
$6,750
2250
1
1.0
2250.0
2
$100,650
$12,150

Event
Time
7
10
23
33
33
30
35

Test Questions
True/False and Multiple Choice
F 1. ___ When crashing a project, the variance of the crashed activity time is the same as
the variance of the normal activity time.
T 2. ___ When crashing a project, the variance of the crashed activity time is usually
different from the variance of the normal activity time.
T 3. ___ Task durations will typically change when overallocated resources are leveled
by Microsoft Project.
F 4. ___ Task durations should remain the same when resources are leveled by Microsoft
Project.
F 5. ___ All resource overallocations should be eliminated before beginning a project.
F 6. ___ Task durations are always determined by resource availability.
T 7. ___ The minimum slack rule is usually the best rule to follow when assigning
resources to multiple projects.
T 8. ___ As originally developed, PERT does not address resource utilization and
availability.

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6/Allocating Resources to the Project

F 9. ___ Additional resources should not be added to the project during periods when
some resources are overallocated.
F 10. ___ As originally developed, CPM does not include a method to relate the project
schedule to the level of physical resources allocated.
T 11. ___ Preparing a resource loading report is an excellent way of developing a
rough project plan to help reduce excess demands on certain resources.
F 12. ___ Time and cost are the two constraints on resource allocation.
F 13. ___ Showing the amount of a resource needed on a schedule during a specific time
period is called resource slope.
T 14. ___ A task that requires a fixed amount of time and fixed quantities of
resources is called system constrained.
F 15. ___ If the minimum slack priority rule is used, resources would be devoted to tasks
with the shortest duration first.
F 16. ___ If the shortest duration first priority rule is used, resources would be devoted to
tasks with the minimum slack.
b 17. ___ What is meant by Fast Tracking a project?
a. adding more resources to the project to shorten its duration
b. starting the project before the design and planning phases are completed
c. a synonym for crashing a project
d. cutting the duration of tasks on the project
e. none of the above
c 18. ___ Under what conditions would you need to level resources?
a. when there are constraints on resource availability
b. when resource calendars conflict with the project schedule
c. when resources are overallocated to a project
d. when resources are shared among projects
e. under any of the above conditions
b 19. ___ The purpose of resource leveling is to:
a. allow for scarce resources to be assigned to a task
b. smooth demands for resources
c. ensure no overtime will be needed
d. preserve a particularly valuable resource
e. all of the above

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d 20. ___ In general, the best priority rule to use for constrained resource allocation is:
a. shortest task first
b. longest task first
c. most successors first
d. minimum slack task first
e. most resources needed first
d 21. ___ The scheduling method that begins with the normal project schedule of
activities and then crashes selected activities, one at a time, in order to
decrease the projects duration at minimum cost is called?
a. PERT
b. GERT
c. Q-GERT
d. CPM
e. Gantt
b 22. ___ Showing the amount of a resource needed on a schedule during a specific time
period is called?
a. a resource slope
b. resource loading
c. a crash diagram
d. a resource allocation table
e. GERT
Short Answer
23. Define the term Resource Loading.
Assigning specific resources to work on activities of a project at a specific time.
24. When and why would you use a labor pool on projects?
When an organization is conducting many projects at the same time with like
resource requirements. The cost of adding or laying off resources assigned to one
project is high. It is sometimes better to pull resources from a pool when needed.
25. Why would you want to have excess resource capacity on your project?
When your resources are scheduled with no excess capacity, a resource might become
unavailable due to vacation or sick leave. Anytime when task duration or schedule is
uncertain.
26. What is resource leveling?
A process that aims to minimize the variations in resource usage and scheduling by
shifting tasks--usually within their slack allowances.

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Problem
27. Given the following project, all times are in weeks:
Activity
A
B
C
D
E
F

Normal
Time
5
5
10
7
6
11

Predecessors
--A
B
A
C, D

Normal
Cost
400
300
400
400
300
600

Crash Time
3
1
5
2
2
5

Crash Cost
600
500
700
600
500
900

a. Draw the network, find the critical path, time, and cost for an all-normal level
of project activity.
b. Calculate the crash cost-per-day (all activities may be partially crashed).
c. Find the all-crash schedule and cost.
d. Find the least-cost plan for the all crash time schedule.
Solution:
a.

C
4

B
3

The critical path is A-C-F. The time and cost for an all-normal level of project
activity is 26 weeks and $2400, respectively.
b. The crash cost-per-day for the activities are shown in the spreadsheet below:
A
4
5
6
7
8
9
10
11
12

Activity
a
b
c
d
e
f
Total

B
Normal
Time
5
5
10
7
6
11

C
Normal
Cost
$400
$300
$400
$400
$300
$600
$2,400

D
Crash
Time
3
1
5
2
2
5

94

E
Crash
Cost
$600
$500
$700
$600
$500
$900

F
Crash
Cost/Day
100
50
60
40
50
50

6/Allocating Resources to the Project

c. The all-crash schedule and cost are 13 weeks and $6200 ($2400 + $3800), respectively.
d. The project can be completed in 13 weeks by following the crash schedule shown in
column H in the spreadsheet below. This solution reduces the crashing cost from
$3800 to $960 for a total project cost of $3360.
A
1 Deadline:
2 Total Cost:
3
4
Activity
5
6
a
7
b
8
c
9
d
10
e
11
f
Total
12
13
14
Node
15
16
2
17
3
18
4
19
5

B
13
$3,360

Normal
Time
5
5
10
7
6
11

Normal
Cost
$400
$300
$400
$400
$300
$600
$2,400

Crash
Time
3
1
5
2
2
5

Crash
Cost
$600
$500
$700
$600
$500
$900

Event
Time
3
5
8
13

95

Crash
Max Crash
Amt
Crashing
Cost/Day
Amt
to Crash
Cost
100
2
2.0
200.0
50
4
0.0
0.0
60
5
5.0
300.0
40
5
4.0
160.0
50
4
0.0
0.0
50
6
6.0
300.0
$960

Actual
Time
3
5
5
3
6
5