MANAGING PROJECT RESOURCES PART 2

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 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) Adding more personnel

Project Crashing Time-Cost Trade-Offs for Crashing Activities Fully expedited (no expense is spared) Time-Cost Trade-Offs for Crashing Activities

Project Crashing In 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

Example 8 – 5 3 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 8 – 5 3 Cease crashing when the target completion time is reached the crash cost exceeds the penalty cost

Example a) Calculate the per day costs for crashing each activity Normal Crashed Activity Duration Cost Duration Cost A 4 days $1,000 3 days $2,000 B 5 days $2,500 3 days $5,000 C 3 days $750 2 days $1,200 D 7 days $3,500 5 days $5,000 E 2 days $500 1 day $2,000 F 5 days $2,000 4 days $3,000 G 9 days $4,500 7 days $6,300 a) Calculate the per day costs for crashing each activity b) Which are the most attractive candidates for crashing? Why?

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

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 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 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 firm’s resources

Resource Loading The 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 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 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 Start with a network diagram

Resource Loading Charts Activity Resource Duration ES Slack LF A 6 4 B 2 1 5 C 3 11 D 7 9 E F 12 Produce a table that shows the duration, early start, late finish, slack, and resource(s) required for each activity.

Resource Loading Charts Draw an initial loading chart with each activity scheduled at its ES. A 2 4 6 8 12 10 14 C B D E F Project Days Resources Resource imbalance

Resource Loading Charts Rearrange activities within their slack to create a more level profile. Splitting C creates a more level project. A 2 4 6 8 12 10 14 C B D E F Project Days Resources

Resource Loading Chart