Chapter 6

Allocating Resources to the

Project

Edited by : Mohd Azrik

Introduction
• Projects Compete With One Another for
Resources
– resources that are not consumed
• Service of specific technical specialist
– resources that are consumed
• specific chemical reagent
• Goal of Resource Allocation is to Optimize Use
of Limited Supply
• Requires making trade-offs
– time constrained
– resource constrained
Introduction
• Example of resources include people,
equipments, machines, tools, facilities and
space.
• Resources need to be considered when
developing a schedule because, if sufficient
resources are not available, some activities may
have to be rescheduled for a later time when
resources are available.
• This can push back the project completion time.
Introduction
• If three resources are needed for three activities
and available simultaneously, the three activities
can be performed simultaneously.
• However, if three resources are needed but only
available sequentially, the three activities must
be done sequentially.
• The diagram should be drawn to reflect these
relationships.
Introduction
• Technical constraints are activities that must be
performed in a certain order to meet the project
objective.
• For example, three house-building activities —
build foundation, build frame, and put on roof —
must be performed in that sequence.
Introduction
• Resource constraints are resources that are
limited and available in a particular timeframe.

• For example, if three rooms of a house need to

be painted, but only one painter is available, the
project is constrained by the “personnel”
resource.
EXPEDITING A PROJECT
Crashing
• Project crashing is the method for
shortening the project duration by reducing
the time of one or more critical activities to
less than their normal time.
• Crashing is achieved by devoting more
resources hence the cost associated with
the project is increased.
• Objectives:
– To reduce the project duration
– Minimizes the cost of crasing.
Crashing
• Crashing
– reducing project time by expending additional
resources
• Crash time / duration
– an amount of time an activity is reduced
• Crash cost
– cost of reducing activity time
Crashing
• Why need to reduce project duration?
– Customer requirements
– Contract commitments
– Time to market pressures
– Incentive contracts (bonus if finish early)
– Unforeseen delays
– Need to move resources to other projects
Crashing
• Way to reduce project duration:
– Adding resources
– Outsourcing project work
– Scheduling overtime
– Establishing a core project team
– Fast-tracking
– Critical chain
– Do it twice
– Reducing project scope
– Compromise quality.
 Time – Cost Relationship

Crashing costs increase as project duration decreases

The Critical Path Method
• Normal Duration Estimates
• Normal Costs
• Crash Duration Estimates
• Crash Costs
• Crash Cost Per Day = Slope of the graph

Crash Cost - Normal Cost

Crash Duration - Normal Duration
Example – Crashing a Project
 Example – Crashing a Project

Activity a
• Can be completed by 3 days with a cost of $40.
• Can be completed by 2 days with a cost of $80.

Activity b
• Can be completed by 2 days with a cost of $20.
• Can be completed by 1 days with a cost of $80.

Activity c
• Cannot be crashed
 Example – Crashing a Project

Activity d
• Allow partial crashing
• Can be completed by 4 days with a cost of $30
• Can be completed by 3 days with a cost of $60
• Can be completed by 2 days with a cost of $90
• Can be completed by 1 day with a cost of $120

Activity e
• Can be completed by 3 days with a cost of $10
• Can be completed by 1 day with a cost of $80
Example – Crashing a Project
Example – Crashing a Project

2 ($20)
3 ($10)
3 ($40)
2 ($20)

4 ($30)
Total duration : 8 days
Total cost : $120
Example – Crashing a Project

Project can be reduced to 7 days using 3 options

• Option X – crash a by 1 day Total cost = $160
• Option Y – crash b by 1 day Total cost = $180
• Option Z – crash e by 2 days Total cost = $190

2 ($20)

OPTION X 2 ($80) 3 ($10)

2 ($20)

4 ($30)
Total duration : 7 days
Total cost : $160
Example – Crashing a Project

Project can be reduced to 6 days using 2 options

• Option X – crash e by 2 days and d by 1 day Total cost = $220
• Option Y – crash a by 1 day and b by 1 day Total cost = $220

1 ($80)
3 ($10)
OPTION Y 2 ($80) 2 ($20)

4 ($30)
Total duration : 6 days
Total cost : $220
Example – Crashing a Project

Project can be reduced to 5 days using 1 option

• Option X – crash e by 2 days, a by 1 day and d by 1 day. Total cost = $260

2 ($20)
OPTION Y 2 ($80) 1 ($80)
2 ($20)

3 ($60)
Total duration : 5 days
Total cost : $260
 Example – Crashing a Project

Project can be reduced to 5 days using 1 option

• Option X – crash e by 2 days, a by 1 day,
b by 1 day and d by 2 day.

Total duration : 4 days 1 ($80)

1 ($80)
Total cost : $350 2 ($80) 2 ($20)

2 ($90)
Example – Crashing a Project
Probabilistic Activity Durations
• Three time estimates made for both normal
resource loading and crash resource
loading
• Variance of normal activity may be
different than variance of crash time
Fast-Tracking a Project
• Used Primarily in Construction Industry
• Building phase started before design and
planning phases completed
• Particularly appropriate when large
proportion of work is routine
RESOURCE LOADING
Resource Loading
• Amount of specific resources that are
scheduled for use on specific activities or
projects at specific times.
• Helps project managers develop a general
understanding of the demands a project
will make on the organization’s resources
and individual people’s schedules
• Usually a list or table.
Example of Resource Usage Calendar
RESOURCE LEVELING
Resource Leveling
• Resource leveling aims to minimize the
period-by-period variations in resource
loading by shifting tasks within their slack
allowances.
• In other words, resource leveling is a
technique for resolving resource conflicts
by delaying tasks
• The purpose is to create a smoother
distribution of resource usage
Resource Leveling
• Advantages
– More efficient resource management
– When resources are used on a more constant
basis, they require less management
– Be able to use ‘just in time’ inventory policy
with right quantity delivered
– If the resource being leveled is people, it
improves morale and results in fewer
problems in the personnel and payroll offices
 Example of Resource Leveling
The activity time is shown
above the arc, and
resource usage (one
resource, workers) is in
brackets below the arc.
Without Resource Leveling
 Example of Resource Leveling

With Resource Leveling

34 Week Resource Loading Chart for a Software
Engineering Group
Resource Loading/Leveling and
Uncertainty
• 28,282 Hours Needed
• Work hour per week
– 8hr x 5 days = 40 hrs/wk
• Group Capacity
– 21 (people)  40 (hrs/wk)  34 wk = 28,560 labor hrs
• Correction for Holidays (public holidays)
– 21  3 (days)  8 (hours) = 504 labor hrs
• Vacations
– 11  2 (weeks)  40 = 880 labor hrs
Resource Loading/Leveling and
Uncertainty continued
• Hours Available
– 28,560 - 504 - 880 = 27,176
– about 1100 less than needed
– 27,176 / 28,282 = 96%
• What about
– Workers getting sick?
– Task not ready when worker is ready?
– Change orders?
Resource Loading/Leveling and
Uncertainty continued
• Best practice, try to schedule resource
between 85% to 90% of the capacity
• Reason:
– Disruption
– Emergency
– Personal issues
– Maintenance requirement
– Inefficiency of resources
– Holidays
Resource Loading/Leveling and
Uncertainty continued
• In the case of this software engineering
group, engineer must work overtime to
complete the job. So management can
offer paid overtime or for many company,
engineer work overtime without payment.
 ALLOCATING SCARCE
RESOURCES TO PROJECTS
Use of Software
• Begin with Pert/CPM Schedule
• Activities examined period by period and
resource by resource
• In cases where demand for resource
exceeds supply, tasks considered one by
one and resources assigned to these tasks
based on priority rules
Some Priority Rules
• As soon as possible
– This is the standard rule in scheduling.
– Activities are scheduled to start on their ESTs,
and resources are made available with that in
mind.
• As late as possible
– resources are made available so that activities
start on their LSTs whenever possible without
increasing the project’ s duration.
Some Priority Rules
• Shortest task duration first
– shorter tasks are given priority over longer
tasks
– This rule maximizes the number of
tasks that can be completed by a system in a
given time period.
• Minimum slack first
– Task with minimum slack is given priority
Some Priority Rules
• Most critical followers
– Activities with a higher number of critical
successors take precedence.
• Most successor
– The same as the previous rule except that all
successors are counted.
• Most resources first
– the greater the use of a specific resource on a
task, the higher the task’ s priority for the
resource.
GOLDRATT’S CRITICAL CHAIN
Introduction
• Similar issues that trouble people about
working on projects regardless of type of
project
– unrealistic due dates
– too many changes
– resources and data not available
– unrealistic budget
– competition for limited resources
• These issues/problems related to need to
make trade-offs
• To what extent are these problems caused by
human decisions and practices?
Figure 6-21 Three Project
Scenarios

Assume that each task takes 10 days to complete and standard deviation of 3
days. How many days to complete the project for each scenario
Table 6-6 Project Completion Time Statistics Based
on Simulating Three Projects 200 Times

Scenario 1 Scenario 2 Scenario 3

Average 50.4 51.9 53.4
Std Dev 7.1 6.3 5.3
Max 69.4 72.7 69.3
Min 30.1 36.1 39.3
Median 50.0 51.8 53.1
Observations
• Average Completion Times
• Implications of Assuming Known Activity
Times
• Shape of the Distribution
• Worker Time Estimates
• Impact of Inflated Time Estimates
• Student Syndrome
Estimating task times
• what do you imagine project workers do
when they are asked to provide time
estimates for tasks if they will be held
responsible for actual task duration?
– Do you give date with 50% chance completion
or do you give date with higher percentage.?
Common Chain of Events
• Overestimate give rise to several prob
– Give no impact on actual probability
distribution of completing project
– Team member who finish early tend to keep
quite (can relex)
– workers may perceive that they now have
plenty of time to complete the task and
therefore delay starting the task.
– This is what we called ‘student syndrome‘’
Common Chain of Events
continued
• Safety time misused
• Misused safety time results in missed
deadlines
• Hidden safety time complicates task of
prioritizing project activities
• Lack of clear priorities results in poor
multitasking
Common Chain of Events
concluded
• Poor multitasking increases task durations
• Uneven demand on resources also results
due to poor multitasking
• More projects undertaken to ensure all
resources fully utilized
• More projects further increases poor
multitasking