Chapter9

ResourceAllocation

Chapter9ResourceAllocation 1
Introduction
Thischapteraddresses:
Tradeoffsinvolvedtocrashcost
Relationshipbetweenresourceloadingand
leveling
Someapproachesusedtosolveallocation
problem

Chapter9ResourceAllocation 2
CriticalPathMethodCrashingaProject
OneimportantdifferencebetweenCPM&PERT:
CPMincludedawayofrelatingtheproject

scheduletothelevelofphysicalresources
tradetimeforcost,orviceversa
Canspecify2activitytimesand2costs
1sttime/costcombinationcallednormal
2ndcombinationcalledcrash
Normalusualaveragetime,resources
Crashexpeditebyapplyingadditionalresources

Chapter9ResourceAllocation 3
CriticalPathMethodCrashingaProject

Allocationproblemrequiresmorecareful
considerationadditionalresources?
Manythingsmakecrashingawayoflifeon
someprojects(i.elastminuteschangesin
clientspecification,withoutpermissionto
extendtheprojectdeadlinebyanappropriate
increment)
Carefulplanningiscriticalwhencrashing
projectneedtoconsiderfeasibilityof
expeditingwork(e.gequipmentavailability)
Chapter9ResourceAllocation 4
 CriticalPathMethodCrashingaProject

Slope = crash cost normal cost

crash time normal time

Where:slope=costperdayofcrashingaproject

Whenslopeisnegative:indicatethetime
requiredforaprojectisdecreased,thecostis
increased

Chapter9ResourceAllocation 5
 Thedollarsperdayslopeofactivitiesis
relevantonlyifthewholecrashincrementis
useful
Crashingmayinvolvearelativelysimple
decisiontoincreasegroupsofresources
(laborshovel,DitchWitchTechnology)
Ifdochangesintechnologytendtoproduce
discontinuitiesinoutcomesandalsoincost.

Chapter9ResourceAllocation 6
Principlestocrashaproject

1. Focusonthecriticalpathwhentryingto
shortentheduration[resourceready]

1. Selecttheleastexpensivewaytodoit

Chapter9ResourceAllocation 7
 CrashingaProject(E.gTwoTimeCPM)

Activity Precedenc Duration, Cost,$ Slope($/day)

e Days (normal,crash)
(normal,crash)
a 3,2 40,80 40/1=40
b a 2,1 20,80 60/1=60
c a 2,2 20,20 Cannotbe
expedited
d* a 4,1 30,120 90/3=30
e** b 3,1 10,80 70(2days)

*Partial crashing allowed

**Partial crashing not allowed
Chapter9ResourceAllocation 8
ACPMExample

b e
a c

1 2 3 4 5 6 7 8

Normal Schedule, 8 days, $120

Chapter9ResourceAllocation 9
 e
b e
b
a a c
c

d d

1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8
7-day schedule, $160 6-day schedule. $220

e e
b b
a c
a c

d
d

1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8
5-day schedule, $260 4-day schedule, $350
Chapter9ResourceAllocation 10
 Networkcriticalpathisabe,projectduration
is8days,normaltotalcostis$120
Thedecisionaboutwhichactivitiestocrash
dependsonhowmuchtoreducetheduration
Onthebenefitside,someprojectshave
penaltyclausesthatmaketheparent
organizationliableforlatedelivery
sometimesbonusesforearlydelivery

Chapter9ResourceAllocation 11
 Onthecostside,figurebelowshowsthetime/cost
relationshipofcrashingtheproject

400
350 All crash
300 a + b + 2d + 2e
Cost ($)

250 a + d + 2e - b
200 a+b
150 a
100
All normal
50
0
0 1 2 3 4 5 6 7 8 9
Total duration (days)

Chapter9ResourceAllocation 12
FastTracking
Anotherwaytoexpediteaproject
Termusedforconstructionprojects
Referstooverlappingdesignandbuild
phases
Designcompletedbeforeconstruction
starts,sooverlappingwillresultshorteningthe
projectduration
Buildbeforedesigncompletedmoredesign
changes
Lossproductivity,increasedcost,losstime
Chapter9ResourceAllocation 13
FastTracking(cont.)
Studiesrevealedthat:
moredesignchangesinfasttrackingthe
numberofprojectchangeordersnotsignificantly
differentthannotfasttrackedproject
Dependentoneffectivefeedbackandfeed
forwardcommunication

Chapter9ResourceAllocation 14
 SOLVEDPROBLEM

Activity Crash Norma Partial

2
d Time, lTime, crashin
a
Cost Cost g
c
a 3,$60 3,$60 No
1 4
b b 6,80 7,30 Yes
e
3
c 2,90 5,50 No
d 5,50 6,30 No
e 2,100 4,40 Yes
Findthelowestcosttocompletetheprojectin10days
Chapter9ResourceAllocation 15
 Answer
Currenttimeandcost:12daysand$210
Sincethecriticalpathisace,weonly
3 initiallyneedconsiderthese3activities:
2
6 a:cannotbecrashed
3
0 a d 12
c 5 c:cancut3daysatanextracostof$40
1 4 butonlyresultsinprojectcompletionby
7
4 day11,duetob.Toreach10days,cut
b
e bby1day,totalextracost$90
3

8 e:cancuteby2daysforanextracostof
$60andresultsinprojectcompletionby
day10.

Thus,cute2daysatacostof$60.
Chapter9ResourceAllocation 16
RESOURCEALLOCATIONPROBLEM
AfundamentalmeasureofthePMssuccess
inprojectmgmtistheskillwithwhichthe
tradeoffsamongperformance,timeandcost
aremanaged

Theextremepointsoftherelationship
betweentimeuseandresourceare:
Timelimited

Resourcelimited

Chapter9ResourceAllocation 17
 RESOURCELOADING
Theamountofindividualsresourcesanexisting
schedulerequiresduringspecifictimeperiods
Resourceloadingcanbeillustratedby:
Resourceusagecalendar

ModifiedPERT/CPMAOAdiagram(similarwith

GanttChart)
PMresponsibility:
Demandforresourcesdoesnotexceedresource

capacities
Ensurethattherequiredresources,intherequired

amounts

Chapter9ResourceAllocation 18
ResourceUsageCalendar

Chapter9ResourceAllocation 19
 ModifiedPERT/CPMAOADiagram
(ReferCh08Slide26)
a d j
1 2 6 7
(4,0) (0,2) (0,6)

3 e
(2,1)
f
3
(1,1)
b g i
1 3 5
(2,1) (6,3)
(1,0)
c dummy
1 4
(3,1) h
4
(0,2)

0 5 10 15 20 25 30 35 40 45
Chapter9ResourceAllocation 20
 RESOURCELEVELING
Aimstominimizetheperiodbyperiodvariationsin
resourceloadingbyshiftingtaskswithintheirslack
allowances
Purposetocreateasmootherdistributionofresource
usage
Advantages;
Muchlesshandsonmanagement

Beabletousejustintimeinventorypolicywith

rightquantitydelivered
Iftheresourcebeingleveledispeople,itimproves
moraleandresultsinfewerproblemsinthe
personnelandpayrolloffices
Chapter9ResourceAllocation 21
 E.g:Network

2
a,2
[2]
c,5
1 4
[4]
b,3
[2]
3

Theactivitytimeisshownabovethearc,andresourceusage
(oneresource,workers)isinbracketsbelowthearc.
Chapter9ResourceAllocation 22
 BeforeResourceLeveling

10

a 8

Workers
a
Activity

6
b
4 c c
c
2 c
b b
1 2 3 4 5 1 2 3 4 5
Days Days

Chapter9ResourceAllocation 23
 AfterResourceLeveling

10

a 8

Workers
Activity

6
b
a b
4
c
2 c

1 2 3 4 5 1 2 3 4 5
Days Days

Chapter9ResourceAllocation 24
 RESOURCELOADING/LEVELINGAND
UNCERTAINTY
Ifhappensexcesscapacity,thealternative
thatwecanconsider:









Chapter9ResourceAllocation 25