MANAGING PROJECT RESOURCES

PART 2

Project CrashingThe 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 anticipatedThe project has slipped considerably behind scheduleThere are contractual late penalties

Project CrashingPrincipal methods for crashing

Improving existing resources’ productivityChanging work methodsIncreasing 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)Adding more personnel

Project Crashing

Cost

Activity Duration

Normal

Crashed

Crashed Normal

CrashPoint

NormalPoint

Cost

Activity Duration

Normal

Crashed

Crashed Normal

CrashPoint

NormalPoint

Time-Cost Trade-Offs for Crashing Activities

Fully expedited (no expense is spared)

Project CrashingIn analyzing crash options, the goal is to find the point at which time and cost trade-offs 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

ExampleSUPPOSE:

NORMAL ACTIVITY DURATION = 8 WEEKSNORMAL COST = $14,000CRASHED ACTIVITY DURATION = 5 WEEKSCRASHED COST = $23,000

THE ACTIVITY COST SLOPE = 23,000 – 14,000 OR $9,000 = $3,000 per week

8 – 5 3

Cease crashing whenthe target completion time is reachedthe crash cost exceeds the penalty cost

Example Normal Crashed

Activity Duration Cost Duration CostA 4 days $1,000 3 days $2,000B 5 days $2,500 3 days $5,000C 3 days $750 2 days $1,200D 7 days $3,500 5 days $5,000E 2 days $500 1 day $2,000F 5 days $2,000 4 days $3,000G 9 days $4,500 7 days $6,300

a) Calculate the per day costs for crashing each activityb) Which are the most attractive candidates for crashing? Why?

Example

Activity Per Day CostA $1,000B $1,250C $450D $750E $1,500F $1,000G $900

Resource Allocation ProblemA 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 ProblemSchedules 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 manager’s 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 ProblemThe 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 criticalResource 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 LoadingResource 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 firm’s resources

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

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

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 HeuristicsPrioritizing resource allocation include applying resources to activities:

with the smallest amount of slackwith the smallest durationthat start earliestwith the most successor tasksrequiring the most resources

Resource Leveling StepsCreate a project activity network diagramCreate a table showing the resources required for each activity, durations, and the total float availableDevelop a time-phased resource loading tableIdentify any resource conflicts and begin to smooth the loading table using one or more heuristics

Resource Loading Chart

Display the amount of resources required as a function of time.

0 A 4 Res = 6

4 B 5 Res = 2

5 D 9 Res = 7

9 E 11 Res = 3

4 C 7 Res = 2

11 F 12 Res = 6

1. Start with a network diagram

Resource Loading ChartsActivity Resource Duration ES Slack LF

A 6 4 0 0 4

B 2 1 4 0 5

C 2 3 4 4 11

D 7 4 5 0 9

E 3 2 9 0 11

F 6 1 11 0 12

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

Resource Loading Charts

A

2

4

6

8

2 1210864 14

C

BD

E

F

Project Days

Res

ourc

es

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

Resource imbalance

Resource Loading Charts4. Rearrange activities within their slack

to create a more level profile. Splitting C creates a more level project.

A

2

4

6

8

2 1210864 14

C

BD

E

F

Project Days

Res

ourc

es

C

Resource Loading Chart