1

Scheduling
Resources and
Costs
CHAPTER 8
 2
Learning Objectives

u Understand the differences between time-constrained and resource-

constrained schedules.
u Identify different types of resource constraints.
u Describe how the smoothing approach is used on time-constrained projects.
u Describe how leveling approach is used for resource-constrained projects.
u Understand how project management software creates resource-
constrained schedules.
u Understand when and why splitting tasks should be avoided.
u Identify general guidelines for assigning people to specific tasks.
u Identify common problems with multi-project resource scheduling.
u Explain why a time-phased budget baseline is needed.
u Create a time-phased project budget baseline.
 3
Chapter Outline

u Introduction
u Overview of the Resource Scheduling Problem
u Types of Resource Constraints
u Classification of a Scheduling Problem
u Resource Allocation Methods
u Computer Demonstration of Resource-Constrained Scheduling
u Splitting Activities
u Benefits of Scheduling Resources
u Assigning Project Work
u Multi-project Resource Schedules
u Using the Resource Schedule to Develop a Project Cost Baseline
u Assignment
 4

Introduction
 5
Introduction

Project network times are not a schedule until resources have been
assigned.
Cost estimates are not a budget until they have been time-phased.
 6

Overview of
the Resource
Scheduling
Problem
 7
Overview of the Resource
Scheduling Problem

u After staff and other resources were assigned to her project, a

project manager listed the following questions that still needed
to be addressed:
u Will the assigned labor and/or equipment be adequate and
available to deal with my project?
u Will outside contractors have to be used?
u Do unforeseen resource dependencies exist? Is there a new critical
path?
u How much flexibility do we have in using resources?
u Is the original deadline realistic?
 8
Overview of the Resource
Scheduling Problem

u The time estimates for the work packages and network times
were made independently with the implicit assumption that
resources would be available.
u This may or may not be the case.
u If resources are adequate but the demand varies widely over
the life of the project, it may be desirable to even out resource
demand by delaying noncritical activities (using slack) to lower
peak demand and, thus, increase resource utilization.
u This process is called resource smoothing (leveling).
 9
Overview of the Resource
Scheduling Problem

u On the other hand, if resources are not adequate to meet

peak demands, the late start of some activities must be
delayed, and the duration of the project may be increased.
u This process is called resource-constrained scheduling.
 10

Types of
Resource
Constraints
 11
Types of Resource Constraints

u Technical or Logic Constraints – Constraints related to the

networked sequence in which project activities must occur.
u Physical Constraints – Activities that cannot occur in parallel or
are affected by contractual or environmental conditions.
u Resource Constraints – The absence, shortage, or unique
interrelationship and interaction characteristics of resources
that require a particular sequencing of project activities
u Kinds of Resource Constraints – People, materials, or equipment.
 12
Types of Resource Constraints
 13

Classification
of a
Scheduling
Problem
 14
Classification of a Scheduling
Problem

u A time-constrained project is one that must be completed by

an imposed date.
u If required, resources can be added to ensure the project is
completed by a specific date.
u Although time is the critical factor, resource usage should be no
more than is necessary and sufficient.

u A resource-constrained project is one that assumes the level of

resources available cannot be exceeded.
u If the resources are inadequate, it will be acceptable to delay the
project, but as little as possible.
 15
Classification of a Scheduling
Problem

u Using a priority matrix will help determine if the project is time or

resource constrained.
u One simple test to determine if the project is time or resource
constrained is to ask, “If the critical path is delayed, will
resources be added to get back on schedule?”
u If the answer is yes, assume the project is time constrained; if no,
assume the project is resource constrained.
 16

Resource
Allocation
Methods
 17
Limiting Assumptions

u Splitting activities is not allowed—once an activity is started, it is

carried to completion.
u Level of resources used for an activity cannot be changed.
u Risk Assumptions
u Activities with the most slack pose the least risk.
u Reduction of flexibility does not increase risk.
u The nature of an activity (easy, complex) doesn’t increase risk.
 18
Time-Constrained Projects:
Smoothing Resource Demand

u Scheduling time-constrained projects focuses on resource

utilization.
u Practitioners have attacked the utilization problem using
resource leveling techniques that balance demand for a
resource.
u Basically, all leveling techniques delay noncritical activities by
using positive slack to reduce peak demand and fill in the
valleys for the resources.
 19
Time-Constrained Projects:
Smoothing Resource Demand
 20
Time-Constrained Projects:
Smoothing Resource Demand
 21
Time-Constrained Projects:
Smoothing Resource Demand

u Advantages
u Peak resource demands are reduced.
u Resources over the life of the project are reduced.
u Fluctuation in resource demand is minimized.
u Disadvantages
u Loss of flexibility that occurs from reducing slack.
u Increases in the criticality of all activities.
 22
Resource-Constrained Projects

u Resources are limited in quantity or availability.

u Activities are scheduled using heuristics (rules-of-thumb) that
focus on:
1. Minimum slack
2. Smallest (least) duration
3. Lowest activity identification number
u The parallel method is used to apply heuristics – An iterative
process starting at the first time period of the project and
scheduling period-by-period the start of any activities using the
three priority rules.
 23
Resource-Constrained Projects
 24
Resource-Constrained Projects
 25
Resource-Constrained Projects

Period Action
0–1 Only activity 1 is eligible. It requires 2 programmers.
Load activity 1 into schedule.
1–2 No activities are eligible to be scheduled.
2–3 Activities 2, 3, and 4 are eligible to be scheduled. Activity 3
has the least slack (0)—apply rule 1.
Load Activity 3 into schedule.
Activity 2 is next with slack of 2; however, activity 2 requires
2 programmers and only 1 is available.
Delay activity 2. Update: ES = 3, slack = 1.
The next eligible activity is activity 4, since it only requires 1
programmer.
Load activity 4 into schedule.
 26
Resource-Constrained Projects

Period Action
3–4 Activity 2 is eligible but exceeds limit of 3 programmers in
pool.
Delay activity 2. Update: ES = 4, slack = 0.
4–5 Activity 2 is eligible but exceeds limit of 3 programmers in
pool.
Delay activity 2. Update: ES = 5, LF = 11, slack = −1.
Delay activity 7. Update: ES = 11, LF = 13, slack = −1.
5–6 Activity 2 is eligible but exceeds limit of 3 programmers in
pool.
Delay activity 2. Update: ES = 6, LF = 12, slack = −2.
Delay activity 7. Update: ES = 12, LF = 14, slack = −2.
 27
Resource-Constrained Projects

Period Action
6–7 Activities 2, 5, and 6 are eligible with slack of −2, 2, and 0,
respectively.
Load activity 2 into schedule (rule 1).
Because activity 6 has 0 slack, it is the next eligible activity.
Load activity 6 into schedule (rule 1).
The programmer limit of 3 is reached.
Delay activity 5. Update: ES = 7, slack = 1.
7–8 Limit is reached. No programmers available.
Delay activity 5. Update: ES = 8, slack = 0.
8–9 Limit is reached. No programmers available.
Delay activity 5. Update: ES = 9, LF = 11, slack = −1.
9–10 Limit is reached. No programmers available.
Delay activity 5. Update: ES = 10, LF = 12, slack = −2.
 28
Resource-Constrained Projects

Period Action
10–11 Activity 5 is eligible.
Load activity 5 into schedule.
(Note: Activity 6 does not have slack because there are
no programmers available—3 maximum.)
11–12 No eligible activities.
12–13 Activity 7 is eligible.
Load activity 7 into schedule.
 29
Resource-Constrained Projects
 30
Resource-Constrained Projects
 31
Resource-Constrained Projects
 32
Resource-Constrained Projects
 33

Computer
Demonstration
of Resource-
Constrained
Scheduling
 34
Example – EMR Project

u EMR Project
u The development of a handheld electronic medical reference
guide to be used by emergency medical technicians and
paramedics.
u Problem
u There are only eight design engineers who can be assigned to
the project due to a shortage of design engineers and
commitments to other projects.
Computer Demonstration of 35
Resource-Constrained
Scheduling
Computer Demonstration of 36
Resource-Constrained
Scheduling
 37
Resource-Constrained Projects
38
Computer Demonstration of 39
Resource-Constrained
Scheduling
 40
The Impacts of Resource-
Constrained Scheduling

u Reduces delay but reduces flexibility.

u Increases criticality of events.
u Increases scheduling complexity.
u May make the traditional critical path no longer meaningful.
u Can break sequence of events.
u May cause parallel activities to become sequential and critical
activities with slack to become noncritical.
 41
Splitting Activities

u Splitting tasks is a scheduling technique used to get a better

project schedule and/or to increase resource utilization.
u A planner splits the continuous work included in an activity by
interrupting the work and sending the resource to another
activity for a period of time and then having the resource
resume work on the original activity.
u Splitting can be a useful tool if the work involved does not
include large start-up or shutdown costs—for example, moving
equipment from one activity location to another.
u The most common error is to interrupt “people work,” where
there are high conceptual start-up and shutdown costs.
 42
Splitting Activities
 43

Benefits of
Scheduling
Resources
 44
Benefits of Scheduling
Resources

u Leaves time for consideration of reasonable alternatives:

u Cost-time tradeoffs.
u Changes in priorities.

u Provides information for time-phased work package budgets to

assess:
u Impact of unforeseen events.
u Amount of flexibility in available resources.
 45

Multi-project
Resource
Schedules
 46
Multi-project Resource
Schedules

u Multi-project Scheduling Problems:

1. Overall project slippage
u Delay on one project create delays for other projects.

2. Inefficient resource application

u The peaks and valleys of resource demands create scheduling problems
and delays for projects.

3. Resource bottlenecks
u Shortages of critical resources required for multiple projects cause delays
and schedule extensions.
 47
Multi-project Resource
Schedules

u Create project offices or departments to oversee the

scheduling of resources across projects.
u Use a project priority queuing system: first come, first served for
resources.
u Centralize project management: treat all projects as a part of a
“megaproject.”
u Outsource projects to reduce the number of projects handled
internally.
 48

Using the
Resource
Schedule to
Develop a
Project Cost
Baseline
 49
Why a Time-Phased Budget
Baseline Is Needed?

u Once resource assignments have been finalized we are able to

develop a baseline budget schedule for the project.
u Using your project schedule, you can time-phase work packages
and assign them to their respective scheduled activities to develop
a budget schedule over the life of your project.
u Without a time-phased budget good project schedule and cost
control are impossible.
u Planned costs for the first five weeks are $2,000,000.
u Actual costs for the first five weeks are $2,400,000.
u Or
u Planned costs for the first five weeks are $2,000,000.
u Actual costs for the first five weeks are $1,700,000.
 50
Creating a Time-Phased
Budget
 51
Patient Entry Project Network
 52
Patient Entry Project Network
 53

Assignment
 54
Assignment

u Exercises: 1, 2, 3, 5, 6, 8, 9, 11, 12 By Hand.

u Case 8.1 – Blue Mountain Cabin (Page 292).
u Case 8.2 – Power Train, Ltd. (Page 292).
 55

Thank You