Allocating Resources to the Project 6 1 Introduction

Allocating Resources to the Project 6 -1

Introduction 4 Projects Compete With One Another for Resources – resources that are not consumed – resources that are consumed 4 Goal of Resource Allocation is to Optimize Use of Limited Supply 4 Requires making trade-offs – time constrained – resource constrained 2

EXPEDITING A PROJECT 6 -3

The Critical Path Method 4 Normal Duration Estimates 4 Normal Costs 4 Crash Duration Estimates 4 Crash Cost Per Day 4

Normal Crash Cost per Activity Predecessor Duration Cost Day a ----- 6 days 5 days $60 $90 $30/d b ----- 7 4 50 150 33/d c a 6 4* 100 160 N. A. d a 7 7 30 30 N. A. e b 5 4 70 85 15/d f c 9 7 40 120 40/d g d, e 7 4 50 230 60/d 5

Figure 6 -1(a) Gantt Chart Crash Problem -- 21 -Day Project 6

Figure 6 -1(b) AON Network for Sample Crash Problem -- 21 -Day Project 7

Figure 6 -2 Gantt Chart for 20 Day Solution to Crash Problem 8

Figure 6 -3 Gantt Chart for 19 Day Solution to Crash Problem 9

Figure 6 -4 Gantt Chart for 18 Day Solution to Crash Problem 10

Figure 6 -5 Gantt Chart for 16 Day Solution to Crash Problem 11

Figure 6 -6 Project Cost Versus Project Duration for Sample Crash Problem 12

Using Excel’s Solver to Crash a Project 4 Target Cell – minimize crashing costs 4 By Changing Cells – amount to crash activities – time events occur 4 Constraints – amount each activity can be crashed – precedence relationships – complete project by specified time – nonnegativity 13

Fast-Tracking a Project 4 Used Primarily in Construction Industry 4 Building phase started before design and planning phases completed 4 Particularly appropriate when large proportion of work is routine 14

RESOURCE LOADING 6 -15

Resource Loading 4 Amount of specific resources that are scheduled for use on specific activities or projects at specific times. 4 Usually a list or table. 16

Figure 6 -10 Action Plan and Gantt Chart for Production of a Videotape 17

The Charismatic VP 4 Subordinates have hard time saying no to well liked boss. 4 Leads to overcommitted subordinates. 4 Problem further compounded because more experienced workers tend to be most over worked. 4 One solution is to set specific limits on amount of overscheduling permitted. 18

RESOURCE LEVELING 6 -19

Figure 6 -10 Action Plan and Gantt Chart for Production of a Videotape 20

Figure 6 -12 Resource Overallocation Report for Scriptwriter Showing all Activities 21

Figure 6 -13 Graphic Resource Overallocation Report for Scriptwriter 22

Figure 6 -14 Resource Leveled Report for Scriptwriter Showing all Activities 23

Figure 6 -15 Graphic Resource Leveled Report for Scriptwriter 24

Figure 6 -16 Daily Resource Loading Chart for Videotape Project, Scriptwriter Leveled 25

Figure 6 -17 Final Videotape Project Gantt Chart Schedule, With Two Scriptwriters and Producer Leveled 26

Figure 6 -18 Thirty-Four-Week Resource Loading Chart for a Software Engineering Group 27

Resource Loading/Leveling and Uncertainty 4 28, 282 Hours Needed 4 Group Capacity – 21 (people) 40 (hrs/wk) 34 wk = 28, 560 labor hrs 4 Correction for Holidays – 21 3 (days) 8 (hours) = 504 labor hrs 4 Vacations – 11 2 (weeks) 40 = 880 labor hrs 28

Resource Loading/Leveling and Uncertainty continued 4 Hours Available – 28, 560 - 504 - 880 = 27, 176 – about 1100 less than needed – 28, 282/27176 = 1. 04 4 What about – Workers getting sick? – Task not ready when worker is ready? – Change orders? 29

ALLOCATING SCARCE RESOURCES TO PROJECTS 6 -30

Use of Software 4 Begin with Pert/CPM Schedule 4 Activities examined period by period and resource by resource 4 In cases where demand for resource exceeds supply, tasks considered one by one and resources assigned to these tasks based on priority rules 31

Some Comments about Constrained Resources 4 Scarcity of resources rarely applies to resources in general 4 “Walts” 32

Some Priority Rules 4 As soon as possible 4 As late as possible 4 Shortest task duration first 4 Minimum slack first 4 Most critical followers 4 Most successor 4 Most resources first 33

Choosing a Priority Rule 4 Schedule Slippage – amount project or set of projects delayed 4 Resource Utilization – extent that resources are over or underworked 4 In-Process Inventory – amount of unfinished work in the system 34

ALLOCATING SCARCE RESOURCES TO SEVERAL PROJECTS 6 -35

Pseudoactivities 4 Used to link several project together 4 Have duration but do not require any resources 4 This approach allows a set of projects to be dealt with as though it were a single project – use of MSP’s resource loading and leveling charts and tables 36

Figure 6 -19 Multiple Projects Connected with Pseudoactivities Shown on a Time Line 37

Resource Allocation and the Project Life Cycle Figure 6 -20 Project or task life cycles 38

GOLDRATT’S CRITICAL CHAIN 6 -39

Introduction 4 Similar issues that trouble people about working on projects regardless of type of project – – unrealistic due dates too many changes resources and data not available unrealistic budget 4 These issues/problems related to need to make trade-offs 4 To what extent are these problems caused by human decisions and practices? 40

Figure 6 -21 Three Project Scenarios 41

Table 6 -6 Project Completion Time Statistics Based on Simulating Three Projects 200 Times 42

Observations on Estimating Task Times 4 Average Completion Times 4 Optimistic Completion Times 4 Pessimistic Completion Times 4 Implications of Assuming Known Activity Times 4 Impact of Inflated Time Estimates 4 Shape of the Distribution 4 Worker Time Estimates 4 Student Syndrome 43

Multitasking Figure 6 -24 Two Small Projects 44

Figure 6 -25 Alternative Gantt Charts for Projects A and B 45

Common Chain of Events 4 Underestimate time needed to complete project – assumption of known activity times and independent paths 4 Project team members inflate time estimates 4 Work fills available time – student syndrome – early completions not reported 46

Common Chain of Events continued 4 Safety time misused 4 Misused safety time results in missed deadlines 4 Hidden safety time complicates task of prioritizing project activities 4 Lack of clear priorities results in poor multitasking 47

Common Chain of Events concluded 4 Poor multitasking increases task durations 4 Uneven demand on resources also results due to poor multitasking 4 More projects undertaken to ensure all resources fully utilized 4 More projects further increases poor multitasking 48

Reversing the Cycle 4 Reduce number of projects assigned to each individual 4 Schedule start of new projects based on availability of bottleneck resources 4 Reduce amount of safety time added to individual tasks and then add some fraction back as project buffer – activity durations set so that there is a high probability the task will not be finished on time 49

The Critical Chain 4 Longest chain of consecutively dependent events – considers both precedence relationships and resource dependencies 4 Project Buffer 4 Feeding Buffer 50

Figure 6 -26 Sample Network Diagram 51

Figure 6 -27 Project and Feeder Buffers 52