Efficient Resource Allocation in Project Management: Crashing, Fast-Tracking, and Leveling

1. Chapter 9 Resource Allocation

2. Critical Path Method—Crashing a Project • Time and costs are interrelated • Faster an activity is completed, more is the cost • Change the schedule and you change the budget • Thus many activities can be speeded up by spending more money

3. 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

4. Activity Slope

5. An Example of Two-Time CPM Table 9-1

6. Activity Slopes—Cost per Period for Crashing Table 9-2

7. Crashing the Project Figure 9-1a

8. Seven Day Schedule Figure 9-1b

9. Six Day Schedule Figure 9-1c

10. Five Day Schedule Figure 9-1d

11. Four Day Schedule Figure 9-1e

12. Cost-Crash Curve Figure 9-2

13. Fast-Tracking • Fast-tracking is another way to expedite a project • Mostly used for construction projects • Can be used in other projects • Refers to overlapping design and build phases • Increases number of change orders • Increase is not that large

14. The Resource Allocation Problem • 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

15. Time Use and Resource Use • Time limited: A project must be finished by a certain time • Resource limited: A project must be finished without exceeding some specific level of resource usage • System-constrained: A project has fixed amount of time and resources

16. 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 firm’s resources

17. Resource A Figure 9-6a

18. Resource B Figure 9-6b

19. Resource Leveling • Less hands-on management is required • May be able to use just-in-time inventory • Improves morale • Fewer personnel problems • When an activity has slack, we can move that activity to shift its resource usage

20. Resource Leveling Continued • 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 complex to levelize

21. Constrained Resource Scheduling

22. Heuristic Methods • They are the only feasible methods used to attack large projects • While not optimal, the schedules are very good • Take the CPM/PERT schedule as a baseline

23. Heuristic Methods Continued • 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

24. 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

25. 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

26. Optimization Methods • Finds the one best solution • Uses either linear programming or enumeration • Not all projects can be optimized

27. 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 the part of a much larger project

28. Multi-Project Scheduling and Resource Allocation Continued • However, different projects have different goals so combining may not make sense • Must also tell us if there are resources to tackle the new projects we are considering

29. Standards to Measure Schedule Effectiveness • Schedule slippage • Resource utilization • In-process inventory

30. Schedule Slippage • The time past a project’s due date • 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

31. 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

32. 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 • Holding cost is incurred

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

34. Additional Priority Rules • Resource scheduling method • Minimum late finish time • Greatest resource demand • Greatest resource utilization • Most possible jobs

35. Goldratt’s Critical Chain • Thoughtless optimism • Capacity should be equal to demand • The “Student Syndrome” • Multitasking to reduce idle time

36. Goldratt’s Critical Chain Continued • Assuming network complexity makes no difference • Management cutting time to “motivate” workers • Game playing • Early finishes not canceling out late finishes