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Resource Allocation

The document discusses resource allocation and leveling for projects. It describes allocating fixed resources like labor, equipment, and facilities to one or multiple projects. The project schedule should be adjusted to smooth resource usage over time. Crashing a project involves shortening activity durations but increasing costs. Resources should be focused on critical path activities. Leveling aims to balance resource usage and reduce peaks to provide a smoother workload over time. Both heuristic and optimization approaches are used, but heuristics are best for large multi-project scheduling due to complexity.

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107 views34 pages

Resource Allocation

The document discusses resource allocation and leveling for projects. It describes allocating fixed resources like labor, equipment, and facilities to one or multiple projects. The project schedule should be adjusted to smooth resource usage over time. Crashing a project involves shortening activity durations but increasing costs. Resources should be focused on critical path activities. Leveling aims to balance resource usage and reduce peaks to provide a smoother workload over time. Both heuristic and optimization approaches are used, but heuristics are best for large multi-project scheduling due to complexity.

Uploaded by

Shekhar Singh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Chapter 9

Resource Allocation

Allocating Resources to the Project


Allocation of physical resources to one or multiple projects. At any given time, the firm may have fixed level of various resources like - labor-hours of various types of professionals - machine hours of various types of machinery - hours of computing time - specialized locations The project schedule should be adjusted to smooth the use of the resources

Ch #-2

Critical Path MethodCrashing a Project


Time and cost are interrelated The faster an activity is completed, the more it costs Change the schedule and you change the budget Thus many activities can be speeded up by spending more money

What is Crashing / Crunching?


To speed up, or expedite, a project Of course, the resources to do this must be available Crunching a project changes the schedule for all activities This will have an impact on schedules for all the subcontractors Crunching a project often introduces unanticipated problems

Direct Cost vs. Indirect Cost


Direct cost increases if the activity duration is to be reduced. The Indirect cost decreases if the activity duration is to be reduced.

Activity Cost Slope

Crash Cost - Normal Cost Slope Crash Time - Normal Time

An Example of Two-Time CPM

Table 9-1

Activity SlopesCost per Period for Crashing

Negative slope: as the time required for a project or task is decreased, the cost is increased.

Table 9-2

Crashing the Project


When crashing a project, first task is to develop a table or graph of the cost of a project as a function of the projects various possible completion dates.

Crash selected activities, one at a time, to decrease the project duration.

Ch #-9

Crashing the Project


Two principles:
Focus on the critical path(s) when trying to shorten the duration of a project. (Crashing a noncritical activity will not influence project duration.) When shortening a projects duration, select the least expensive way to do it.

Ch #-10

Crashing example
D [10,8] 10

5 6

Direct Cost Rs. 25,500 Indirect Cost Rs. 200/day

Crashing Table

Question
3

A [9,6] 210

G [5,3] 180

H [2,1] 300

Direct Cost Rs. 37,500 Indirect Cost Rs. 250/day

Solution

The Resource Allocation Problem

As discussed, CPM/PERT ignore resource utilization and availability With external resources, this may not be a problem It is, however, a concern with internal resources Schedules need to be evaluated in terms of both time and resources

Resource Allocation

It is common to see the resource allocation problem in terms of manpower, but it can apply to equipment and capital as well Resource allocation in project management is very similar to capacity planning in production management Both the approaches to the problem and potential solutions to the problem are very similar

Resource Loading
Resource loading describes the amount of resources an existing schedule requires Gives an understanding of the demands a project will make of a firms resources

Resource A

Figure 9-6a

Resource B

Figure 9-6b

Resource Leveling
Less hands-on management is required May be able to use just-in-time inventory Improves morale Fewer personnel problems

Resource Leveling

Continued

When an activity has slack, we can move that activity to shift its resource usage May also be possible to alter the sequence of activities to levelize resources Small projects can be levelized by hand Software can levelize resources for larger projects Large projects with multiple resources are very complex to levelize

Constrained Resource Scheduling


Heuristic Approach An approach, such as a rule of thumb, that yields a good solution that may or may not be optimal.

Optimization Approach

An approach, such as linear programming, that yields the one best solution.

Heuristic Methods

The only feasible way on large projects While not optimal, the schedules are very good Take the CPM/PERT schedule as a baseline They sequentially step through the schedule trying to move resource requirements around to levelize them Resources are moved around based on one or more priority rules

Common Priority Rules


As soon as possible As late as possible Shortest task first Most resources first Minimum slack first Most critical followers Most successors Arbitrary

Heuristic Methods

Continued

These are just the common ones There are many more The heuristic can either start at the beginning and work forwards Or it can start at the end and work backwards

Optimization Methods
Finds the one best solution Uses either linear programming or enumeration Not all projects can be optimized Approaches only work with small to medium projects

Multi-Project Scheduling and Resource Allocation


Scheduling and resource allocation problems increase with more than one project The greater the number of projects, the greater the problems One way is to consider each project as part of a much larger project However, different projects have different goals so combining may not make sense Must also tell us if there are resources to tackle new projects we are considering

Standards to Measure Schedule Effectiveness


1.

2.
3.

Schedule slippage Resource utilization In-process inventory

Schedule Slippage

The time past a projects due date when the project is completed Slippage may cause penalties Different projects will have different penalties Expediting one project can cause others to slip Taking on a new project can cause existing projects to slip

Resource Utilization
The percentage of a resource that is actually used We want a schedule that smoothes out the dips and peaks of resource utilization This is especially true of labor, where hiring and firing is expensive

In-Process Inventory
This is the amount of work waiting to be processed because there is a shortage of some resource Similar to WIP in manufacturing The cost here is holding cost

Heuristic Techniques
Multi-projects are too complex for optimization approaches Many of the heuristics are extensions of the ones used for one project

Additional Priority Rules


Resource scheduling method Minimum late finish time Greatest resource demand Greatest resource utilization Most possible jobs

Goldratts Critical Chain


Optimism 2. Capacity should be equal to demand 3. The Student Syndrome 4. Multitasking to reduce idle time 5. Assuming network complexity makes no difference 6. Management cutting time to motivate workers 7. Game playing 8. Early finishes not canceling out late finishes
1.

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