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 = optimal project time Total project cost Indirect cost

Direct cost

time

Project Crashing
In

analyzing crash options, the goal is to find the point at which time and cost tradeoffs 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 85 3 Cease crashing when the target completion time is reached the crash cost exceeds the penalty cost

Project Crashing Example

Normal Activity Duration A 4 days B 5 days C 3 days D 7 days E 2 days F 5 days G 9 days Cost $1,000 $2,500 $750 $3,500 $500 $2,000 $4,500 Crashed Duration Cost 3 days $2,000 3 days $5,000 2 days $1,200 5 days $5,000 1 day $2,000 4 days $3,000 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 A B C D E F G Per Day Cost $1,000 $1,250 $450 $750 $1,500 $1,000 $900

Project Crashing Example

Normal
Activity A B* C Cost Duration 5,000 4 weeks 10,000 5 weeks 3,500 2 weeks

Crashed
Extra Duration Cost 4,000 3 weeks 3,000 4 weeks 3,500 1 week

D*
E* F

4,500 6 weeks
1,500 3 weeks 7,500 8 weeks

4,000 4 weeks
2,500 2 weeks 5,000 7 weeks

G*
H

3,000 7 weeks
2,500 6 weeks

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 21 weeks 20 weeks 19 weeks Direct Penalties Costs 37,500 40,000 42,500 10,000 5,000 -0Overhead 10,500 10,000 9,500 Total 58,000 55,000 52,000

18 weeks
16 weeks

45,500
49,500

-0-0-

9,000
8,000

54,000
56,500

Project Crashing example

2 8 1
12

4
12

7 4

3 4

5 4

6 4

Time Cost data

Activity Normal time 1 12 2 8 3 4 4 12 5 4 6 4 7 4

Normal cost Rs 3000 2000 4000 50000 500 500 1500 75000

Crash time 7 5 3 9 1 1 3

Crash cost Rs 5000 3500 7000 71000 1100 1100 22000 110700

Allowable crash time 5 3 1 3 3 3 1

slope
400 500 3000 7000 200 200 7000

R500
2 8

R7000 4
12

Project duration = 36
R700 7 4 6 4 R200 R7000 4
12

1
12

From..

R400

3 4

5 4 R200 R500 2 8 1

R3000

R700

To.. Project duration = 31 Additional cost = R2000

7

7 4
6 4 R200

R400

3 4

5 4 R200

R3000

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 7 13 3 16

2
3 3

4
13

6
16

12

8 0 1 0 2 7 5 7 15 9 4 6 8 24 24 10 9 34 34

7 3

14 5 7

19 26

Network at the start of the Project

3 2 3 3 8 0 1 0 2 7 3 7 7 5 15 14 5 7 26 9 8 6 4 24 8 24 10 9 34 34 7 13 4 13

Review at the end of 15th day Activity 12 1-2 Time reqd. (Days) 0 Activity Status completed

3
6

16 16

1-3
2-3 2-4 3-4

0
0 0 0 2 4 5 9 8

completed
completed completed completed In Progress In Progress Not started Not started Not started

19

3-5(13-15) 4-6(14-16) 5-7(15-17) 5-8(15-18) 6-8(16-18)

6-9(16-19)

12
10 8

Not started
Not started Not started

Updated Network after day 15 of the Project

(Finished 4-6) 2 3 2 3 3 8 6 4 18 9 2 10 (Finished 3-5) 8 7 3 7 13 15 15 2 15 18 27 27 8 19 7 4 13 13 14 15 15

7-9(17-19) 8-9(18-19)

4
16

19 19 12

New critical path 1-2-3-4-14-16-1819

35 35

0 1

17 5 17

22 25

Project duration increased by 1 day to 35 days

Network at the start of the Project

3 2 3 8 0 1 0 2 7 3 7 6 4 9 24 8 24 10 9 34 34 3 7 13 4 13 3 6 16 16 12 1-2

Review at the end of 15th day Activity Time reqd. (Days) 0 Activity Status completed

1-3
2-3 2-4 3-4 3-5(10-15)

0
0 0 0 2 4 5 9 8

completed
completed completed completed In Progress In Progress Not started Not started Not started

7
5

14 15 5 7

19 26

4-6(10-16) 5-7(15-17) 5-8(15-18) 6-8(16-18)

2nd Method
Updated Network after day 15 of the Project
19

6-9(16-19)
7-9(17-19) 8-9(18-19)

12
10 8

Not started
Not started Not started

16
4

12
8 27 18 8 19 35 35

19

New critical path 1-10-16-18-19

0 1 0

15 10

15 15 2 15 17 18 5 17 9

27

10 22 25

Project duration increased by 1 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 managers success in project management is the skill with which the trade-offs among performance, time, and cost are managed.
I

can 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 firms resources.

Resource Loading
The

project manager must be aware of the flows of usage for each input resource throughout the life of the project.

is the project managers responsibility to ensure that the required resources, in the required amounts, are available when and where they are needed.
It

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

Prioritizing

resource 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 A B C Duration 5 4 5 Total Float 0 1 0 Resource Hours Needed Per Week 6 2 4 Total Resources Required 30 8 20

D
E F G H I J K

6
6 6 4 7 5 3 5

3
1 0 3 0 3 5 0 Total

3
3 2 4 3 4 2 5

18
18 12 16 21 20 6 25 194

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

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 activitys 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 Res = 2 5 D 9 Res = 7 9 E 11 Res = 3

0 A 4 Res = 6

1. Start with a network diagram 4 C 7 Res = 2

11 F 12 Res = 6

Resource Loading Chart

Activity Resource Duration ES Slack LF

A B C D E F

6 2 2 7 3 6

4 1 3 4 2 1

0 4 4 5 9 11

0 0 4 0 0 0

4 5 11 9 11 12

2. Produce a table that shows the duration, early start, late finish, slack, and resource(s) required for each activity.

Resource Loading Chart

8
Resources 6 3. Draw an initial loading chart with each activity scheduled at its ES.

4
A 2 B

Resource imbalance

F E

C
2 4

6 8 10 12 Project Days

14

Resource Loading Chart

8
Resources 6 4. Rearrange activities within their slack to create a more level profile. Splitting C creates a more level project.

4
A 2 B

C
F E

C
2 4

6 8 10 12 Project Days

14

Resource Loading Chart