Resource Allocation

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

Some Definitions
Resource allocation There are generally two conditions:
Normal Crashed

Normal and Crashing

Normal: Crash:

No Free Lunch: Crashing Creates a Ripple Effect

Crashing buys time, but nothing comes free Potential cost areas
equipment/material labor other projects morale quality
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Case: Architectural Associates, Inc.

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

Case: Architectural Associates, Inc. (contd)

PROBLEM: Deterministic task schedules Parkinsons Law: Work expands to fill the time available. RESULT: Issues arising early can be worked around, but late-occurring issues cant

Case: Architectural Associates, Inc. (concluded)

The Solution:
probabilistic time estimates Have staff schedule work for effectiveness and efficiency

When Trying to Crash a Project . . .

Two basic principles
1. Generally, focus on the critical path 2. Choose least expensive way to do it

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
Activity a b c d* e** Predecessor a a a b Days Cost (normal, crash) (normal, crash) 3, 2 2, 1 2, 2 4, 1 3, 1 $40, 80 20, 80 20, 20 30, 120 10, 80
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* Partial crashing allowed ** Partial crashing not allowed

Example (contd): Cost per Day to Crash

Activity
a b c d e

$ Saved/ Day
40 60 30 70 (2 days)
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A CPM Example

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CPM Cost-Duration

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Another Approach to Expediting: Fast-tracking/ Concurrency

Different terms for similar concept Fast-tracking (construction), Concurrent engineering (manufacturing) Both refer to overlapping project phases
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Fast-tracking/Concurrency (contd)
Pros:
shorten duration reduce cycles meet demands

Cons:
increase cost

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Cost, Schedule, or Performance: Pick Any Two

Assuming fixed performance tradeoff areas must be in time or cost Time-limited Resource-limited Over-determined

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Resource Loading
Resource loading: amounts One project, or many
Identifies and reduces excess demands on a firms resources

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Resource Usage Calendar

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AOA Network

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AON Network with Earliest/Latest Start/Finish Times

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Modified PERT/CPM AOA

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Load Diagrams

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Resource Leveling
Resource leveling minimizes variations
shifting tasks within their slack allowances

Advantages
Less day-to-day manipulation Better morale, fewer problems/costs Levels costs, simplifies budgeting and funding
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Network Before & After Resource Loading

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Resource Loading Chart

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Resource Loading Chart

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Constrained Resource Scheduling

Two basic approaches
Heuristic Optimization

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MSP Gantt with Resources

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MSP Load Diagram, Showing Resource Conflict

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MSP Load Diagram, Leveled

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Network for Resource Load Simulation

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Load Chart

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Multiple Projects Resource Leveling

Schedule slippage Resource utilization In-process inventory

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Task a Decomposed

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Hierarchy of Gantt Charts

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Flow Diagram

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Goldratts Critical Chain

systemic problems plague project performance
Not randomly distributed

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Some Systemic Causes of Late Projects

1. Thoughtless Optimism 2. Setting capacity equal to demand 3. Student Syndrome 4. Multitasking
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Some Systemic Causes of Late Projects (concluded)

5. Schedule Complexity 6. Slack Time 7. Game playing

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Critical Chain
Theory of Constraints

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