Resource Allocation

1
Resource Allocation

• Some definitions
• Resource allocation, loading, leveling
• Expediting and crashing projects
• Goldratts Critical Chain

2
Some Definitions

• Resource allocation permits efficient use of
  physical assets
• Within a project, or across multiple projects
• Drives both the identification of resources, and
  timing of their application
• There are generally two conditions
• Normal
• Crashed

3
Normal and Crashing

• Normal Most likely task duration, like m in
  Chapter 8
• Crash Expedite an activity, by applying
  additional resources
• Specialized or additional equipment
• More people (e.g., borrowed staff, temps)
• More hours (e.g., overtime, weekends)

4
No Free Lunch Crashing Creates a Ripple Effect

• Crashing buys time, but nothing comes free
• Potential cost areas
• Additional equipment/material
• Extra labor
• Negative effects on other projects
• Reduced morale, from excessive hours/shifts
• Lower quality, from the pressure of time,
  inexperienced and tired staff
• If you want it bad, youll get it bad . . .

5
Case Architectural Associates, Inc.

• Projects uniformly run late, thus over budget
• Is that the problem, or just the symptom?

6
Case Architectural Associates, Inc. (contd)

• PROBLEM Deterministic task schedules cause
  workers to plan to meet schedule nothing more,
  nothing less
• Parkinsons Law Work expands to fill the time
  available.
• RESULT Issues arising early in each task can be
  worked around, but late-occurring issues cant be
  absorbed in schedule
• And most issues do arise late

7
Case Architectural Associates, Inc. (concluded)

• The Solution
• Use probabilistic time estimates (optimistic,
  pessimistic, most likely)
• Have staff schedule work for effectiveness and
  efficiency, not just to fill x-number of days

8
When Trying to Crash a Project . . .

• Two basic principles
• 1. Generally, focus on the critical path
• Usually not helpful to shorten non-critical
  activities
• Exception When a scarce resource is needed
  elsewhere, e.g., in another project
• 2. When shortening project duration, choose
  least expensive way to do it

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Compute Cost per Day of Crashing a Project

• Compute cost/time slope for each expeditable
  activity
• Slope crash cost normal cost
  crash time normal time

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An Example (Table 9-1)
Activity Predecessor Days(normal, crash) Cost(normal, crash)
a - 3, 2 40, 80
b a 2, 1 20, 80
c a 2, 2 20, 20
d a 4, 1 30, 120
e b 3, 1 10, 80
Partial crashing allowed Partial crashing
not allowed
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Example (contd) Cost per Day to Crash (Table
9-2)
Activity Saved/Day
a 40
b 60
c -
d 30
e 70 (2 days)
12
A CPM Example, Figure 9-1
13
Another Approach to Expediting
Fast-tracking/Concurrency

• Different terms for similar concept
• Fast-tracking (construction), Concurrent
  engineering (manufacturing)
• Both refer to overlapping project phases
• E.g., design/build, or build/test

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CPM Cost-Duration, Figure 9-2
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Fast-tracking/Concurrency (contd)

• Pros
• Can shorten project duration
• Can reduce product development cycles
• Can help meet clients demands
• Cons
• Can increase cost through redesigns, excessive
  changes, rework, out-of-sequence installation,
  and more

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Cost, Schedule, or Performance Pick Any Two .
. .

• Assuming fixed performance specifications,
  tradeoff areas must be in time or cost
• Time-limited or resource-limited
• If all three dimensions are fixed, the system is
  overdetermined
• Normally, no tradeoffs are possible
• But, something has to give . . .

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Resource Loading

• Resource loading types and quantities of
  resources, spread by schedule across specific
  time periods
• One project, or many
• Identifies and reduces excess demands on a firms
  resources

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Resource Usage Calendar, Figure 9-3
19
AOA Network, Figure 9-4
20
Modified PERT/CPM AOA, Figure 9-5
21
Resource Leveling

• Resource leveling minimizes period-by-period
  variations in resource loading, by shifting tasks
  within their slack allowances
• Advantages
• Less day-to-day resource manipulation needed
• Better morale, fewer HR problems/costs
• Leveling resources also levels costs, simplifies
  budgeting and funding

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Load Diagrams, Figure 9-6
23
Network Before and After Resource Loading, Figure
9-7
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Load Diagrams, Figure 9-8
25
Resource Loading Chart, Figure 9-9
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Constrained Resource Scheduling

• Two basic approaches
• Heuristic
• Rule-based, rules of thumb
• Priority rules, tie-breakers
• Optimization
• Not finding an answer that works, but the best
  answer

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MSP Gantt with Resources, Figure 9-10
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MSP Load Diagram, Showing Resource Conflict,
Figure 9-11
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MSP Load Diagram, Leveled, Figure 9-12
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Network for Resource Load Simulation, Figure 9-13
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Load Chart, Figure 9-14
32
Task a Decomposed, Figure9-15
33
Hierarchy of Gantt Charts, Figure 9-16
34
Sources and Uses of Resources, Figure 9-17
35
Project Life Cycles, Figure 9-18
36
Flow Diagram for SPAR-1, Figure 9-19
37
Goldratts Critical Chain

• There are systemic problems that plague project
  schedule performance
• These problems are not randomly distributed
• If they were random, there would be as many
  projects finishing early as late

38
Some Systemic Causes of Late Projects

• 1. Thoughtless Optimism
• Overpromising at project start
• Success-oriented schedules
• Lack of management reserves
• 2. Setting capacity equal to demand
• Ignoring concepts of resource loading and leveling

39
Some Systemic Causes of Late Projects (contd)

• 3. The Student Syndrome
• Delaying start of non-critical tasks
• Parkinsons Law Work expands to fill the time
  available
• 4. Multitasking to reduce idle time
• Switching back and forth between projects creates
  delays

40
Some Systemic Causes of Late Projects (concluded)

• 5. Complexity of schedule drives delay
• Uncertainty and complex paths join to make
  trouble
• 6. People need reason to strive
• Theres often no advantage seen to finishing
  early
• 7. Game playing
• E.g., lower levels pad estimates, senior
  management slashes them
• Both can be equally arbitrary