PROJECT

CRASHING,UPDATING,
RESOURCE ALLOCATION

Presented By : Deepika
Pooja
Shivang
Shifali
Gagandeep
Arvinder
 Project Crashing
The process of accelerating a project is referred
as crashing.
Crashing a project relates to resource
commitment; the more resources expended, the
faster the project will finish.
There are several reasons to crash a project:
Initial schedule was too optimistic
Market needs change and the project is in demand
earlier than anticipated
The project has slipped considerably behind schedule
There are contractual late penalties
 Project Crashing
Principal methods for crashing are:
Improving existing resources’ productivity
Changing work methods
Increasing the quantity of resources
Increasing the quantity of resources is the most
commonly used method for project crashing.
There are 2 approaches:
Working current resources for longer hours
(overtime, weekend work, etc.)
Adding more personnel
 Project Crashing

Fully expedited (no expense is spared

Crash cost
Crashing activity

Slope = crash cost per unit time

Normal Activity
Normal
cost
Normal
time

Crash time Activity time

Time-Cost Relationship
 Crashing costs increase as project duration decreases
 Indirect costs increase as project duration increases
 Reduce project length as long as crashing costs are less than indirect
costs

Time-Cost Tradeoff
Min total cost = Total project cost
optimal project
time Indirect cost

Direct cost

time
 Project Crashing
In analyzing crash options, the goal is to find the
point at which time and cost trade-offs are
optimized.

Various combinations of time-cost trade-offs for

crash options can be determined by using the
following formula:

Slope = crash cost – normal cost

normal time – crash time
 Project Crashing Example
SUPPOSE:
NORMAL ACTIVITY DURATION = 8 WEEKS
NORMAL COST = $14,000
CRASHED ACTIVITY DURATION = 5 WEEKS
CRASHED COST = $23,000
THE ACTIVITY COST SLOPE =
23,000 – 14,000 OR $9,000 = $3,000 per week
8–5 3

Cease crashing when

the target completion time is reached
the crash cost exceeds the penalty cost
 Project Crashing Example
Normal Crashed
Activity Duration Cost Duration Cost
A 4 days $1,000 3 days $2,000
B 5 days $2,500 3 days $5,000
C 3 days $750 2 days $1,200
D 7 days $3,500 5 days $5,000
E 2 days $500 1 day $2,000
F 5 days $2,000 4 days $3,000
G 9 days $4,500 7 days $6,300

a) Calculate the per day costs for crashing each activity

b) Which are the most attractive candidates for crashing?
Why?
 Project Crashing Example

Activity Per Day Cost

A $1,000
B $1,250
C $450
D $750
E $1,500
F $1,000
G $900
 Project Crashing Example
Normal Crashed
Activity Cost Duration Extra Duration
Cost
A 5,000 4 weeks 4,000 3 weeks
B* 10,000 5 weeks 3,000 4 weeks
C 3,500 2 weeks 3,500 1 week
D* 4,500 6 weeks 4,000 4 weeks
E* 1,500 3 weeks 2,500 2 weeks
F 7,500 8 weeks 5,000 7 weeks
G* 3,000 7 weeks 2,500 6 weeks
H 2,500 6 weeks 3,000 5 weeks

When deciding on whether or not to crash project activities,

a project manager was faced with the following information.
Activities of the critical path are highlighted with an asterisk:
Project Crashing Example

The correct sequence for crashing activities

is listed as:
1. Activity E or G (they both cost
$2,500 more)
2. Activity E or G
3. Activity B
4. Activity D
 Project Crashing Example
Suppose project overhead costs accrued at a fixed rate of
$500 per week.
Assume that a project penalty clause kicks in after 19
weeks.
The penalty charged is $5,000 per week.
Duration Direct Penalties Overhead Total
Costs
21 37,500 10,000 10,500 58,000
weeks
20 40,000 5,000 10,000 55,000
weeks
19 42,500 -0- 9,500 52,000
weeks
18 45,500 -0- 9,000 54,000
weeks
16 49,500 -0- 8,000 56,500
weeks
Project Crashing example

2 4
12
8
7
1 4
12

3 6
4 5 4
4
 Time Cost data

Activity Normal Normal Crash Crash Allowable slope

time cost Rs time cost Rs crash time
1 12 3000 7 5000 5 400
2 8 2000 5 3500 3 500
3 4 4000 3 7000 1 3000
4 12 50000 9 71000 3 7000
5 4 500 1 1100 3 200
6 4 500 1 1100 3 200
7 4 1500 3 22000 1 7000
75000 110700
 R500 R7000
Project duration = 36
2 4
8 12 R700
7
1 From…..
4
12

R400 3 6
4 5 4
4 R200
R3000
R200

R500 R7000

2 4
8 12 R700
To….. 7
1 4
Project 7

duration = 31 6
R400 3
Additional cost = 4 5 4
R2000 4 R200
R3000
R200
 UPDATING PROJECT
• Can be done in 2 ways
– Use the revised time estimate of incomplete activities
and calculate from initial event the earliest completion
time and the latest completion time of each event in the
usual manner to know the Project completion time.
– Change the complete work to zero duration and
represent all the activities already finished by an arrow
called the Elapsed time arrow. Events in the revised
network are renumbered.
• The network for a project is shown below. A review of the project after 15
days reveals that
– Activities 1-2, 1-3, 2-3, 2-4 and 3-4 are completed.
– Activities 3-5 and 4-6 are in progress and need 2 and 4 days more
resp.
– The revised estimate shows that activity 8-9 will take only 8 days but
activity 7-9 will need 10 days.

• Draw the new network after updating the Project and determine the
Critical path.

Network at the start of the

Project
3 13 3 16
7
2 4 6 12
3 13 16

3
8
24 10 34
0 6
4 8 9
1
24 34
0
9
2

7 7 14 19 8
3 5 5 7
7 15 26
 Network at the start of the Project Review at the end of 15th day

3 13 3 16 Activity Time reqd. Activity

7
2 4 6 12 (Days) Status
3 13 16
1-2 0 completed
3
8 1-3 0 completed
24 10 34
0 6 2-3 0 completed
4 8 9
1 24 34
0 2-4 0 completed
9
2 3-4 0 completed

7 8 3-5(13-15) 2 In Progress
7 14 19
3 5 5 7 4-6(14-16) 4 In Progress
7 15 26
5-7(15-17) 5 Not started

5-8(15-18) 9 Not started

6-8(16-18) 8 Not started

6-9(16-19) 12 Not started

Updated Network after day 15 of the Project 7-9(17-19) 10 Not started

8-9(18-19) 8 Not started
(Finished 4-6) 2
15 4

2
3 7
4
13
14
16
19
New critical path
15
3 13 19
1-2-3-4-14-16-18-
12
3
8 19
27 8 35
0 6
4 18 19
1
0 9
27 35 Project duration
2
10 increased by 1
7
(Finished 3-5) 8 15 2 17 22
day to 35 days
13
3 15 5 17
15
7 18 25
 Network at the start of the Project Review at the end of 15th day
Activity Time reqd. Activity
(Days) Status
3 7 13 3 16
2 4 6 1-2 0 completed
12
3 13 16
1-3 0 completed
3
8 2-3 0 completed
24 10 34
0 6 2-4 0 completed
4 8 9
1 24 34
0 3-4 0 completed
2 9
3-5(10-15) 2 In Progress

7 7 14 19 8 4-6(10-16) 4 In Progress
3 5 5 7
7 15 26 5-7(15-17) 5 Not started

5-8(15-18) 9 Not started

6-8(16-18) 8 Not started

2nd Method 6-9(16-19)

7-9(17-19)
12

10
Not started

Not started
8-9(18-19) 8 Not started
Updated Network after day 15 of the Project
19
New critical path
12
16
19 1-10-16-18-19
4 8
27 8 35
18 19

1
0 15
10
15 27 35
Project duration
0 15

2
9
10 increased by 1
17 22
15
18 5 17
25
day to 35 days
Resource Allocation Problem
A shortcoming of most scheduling procedures is
that they do not address the issues of resource
utilization and availability.

Scheduling procedures tend to focus on time

rather than physical resources.
 Resource Allocation Problem
Schedules should be evaluated not merely in
terms of meeting project milestones, but also in
terms of the timing and use of scarce resources.

A fundamental measure of the project

manager’s success in project management is the
skill with which the trade-offs among
performance, time, and cost are managed.

“Ican shorten this project by 1 day at a cost of

$400. Should I do it?”
Resource Allocation Problem
The extreme points of the relationship between
time use and resource use are the following:
Time Limited: The project must be
finished by a certain time, using as few
resources as possible. But it is time, not
resource usage, that is critical
Resource Limited: The project must be
finished as soon as possible, but without
exceeding some specific level of resource
usage or some general resource constraint
 Resource Loading
Resource loading describes the amounts of
individual resources an existing schedule requires
during specific time periods.

The loads (requirements) of each resource type

are listed as a function of time period.

Resource loading gives a general understanding of

the demands a project or set of projects will make
on a firm’s resources.
 Resource Loading
The project manager must be aware of the
flows of usage for each input resource
throughout the life of the project.

It is the project manager’s responsibility to

ensure that the required resources, in the
required amounts, are available when and where
they are needed.
Resource Loading Table
Resource Leveling (Smooting)
Resource leveling aims to minimize the period-by-
period variations in resource loading by shifting
tasks within their slack allowances.
The purpose is to create a smoother distribution
of resource usage.
Resource leveling, referred to as resource
smoothing, has two objectives:
To determine the resource requirements so that they
will be available at the right time,
To allow each activity to be scheduled with the
smoothest possible transition across usage levels.
Resource Leveling (Smooting)
Resource management is a multivariate,
combinatorial problem, i.e. multiple solutions with
many variables, the mathematically optimal
solution may be difficult or infeasible.

More common approach to analyzing resource

leveling problems is to apply some resource leveling
heuristics.
Resource Leveling Heuristics
Prioritizingresource allocation include applying
resources to activities:
with the smallest amount of slack
with the smallest duration
that start earliest
with the most successor tasks
requiring the most resources
 Resource Leveling Steps
Create a project activity network diagram
Create a table showing the resources required
for each activity, durations, and the total float
available
Develop a time-phased resource loading table
Identify any resource conflicts and begin to
smooth the loading table using one or more
heuristics
Resource Leveling Example

Critical path:A-C-F-H-K
Resource Leveling Example

Critical path:A-C-F-H-K
 Resource Leveling Example
Activity Duration Total Float Resource Hours Total Resources
Needed Per Week Required
A 5 0 6 30
B 4 1 2 8
C 5 0 4 20
D 6 3 3 18
E 6 1 3 18
F 6 0 2 12
G 4 3 4 16
H 7 0 3 21
I 5 3 4 20
J 3 5 2 6
K 5 0 5 25
Total 194
Resource Leveling Example
 Resource Leveling Example
On day 10 the required resource hours is 10
If project is budgetted for up to 10 resource
units per day, then it is acceptable.
C, D, and E are all scheduled on this day and
have require 4, 3, and 3 hours respectively
Which activity should be adjusted?
C is on the critical path
E has 1 day slack
D has 3 days of slack (we can split the
activity)
Resource Leveling Example
 Resource Loading Chart
Another way to create a visual diagram of
resource management problem is to use resource-
loading charts.
Resource conflicts can be seen in the resource-
loading charts.
They are used to display the amount of resources
required as a function of time on a graph.
Each activity’s resource requirements are
represented as a block (resource requirement over
time).
 Resource Loading Chart
Resource limit is set at 8 hourly units per day.
Display the amount of resources required as a function of time.

4 B 5 5 D 9 9 E 11
Res = 2 Res = 7 Res = 3

1. Start with a
0 A 4 network diagram
Res = 6 11 F 12
Res = 6
4 C 7
Res = 2
 Resource Loading Chart
Activity Resource Duration ES Slack LF

A 6 4 0 0 4
B 2 1 4 0 5
C 2 3 4 4 11
D 7 4 5 0 9
E 3 2 9 0 11
F 6 1 11 0 12
2. Produce a table that shows the
duration, early start, late finish,
slack, and resource(s) required for
each activity.
 Resource Loading Chart
3. Draw an initial loading chart with
8 each activity scheduled at its ES.
Resources

6
Resource
4 imbalance
A D F
B
2 E
C

2 4 6 8 10 12 14
Project Days
 Resource Loading Chart
4. Rearrange activities within their slack
to create a more level profile. Splitting
8 C creates a more level project.
Resources

4 C
A D F
B
2 E
C

2 4 6 8 10 12 14
Project Days
Resource Loading Chart