Resource Allocation Process (crashing And Crunching) 2y530

Chapter 9

Resource Allocation

Copyright 2012 John Wiley & Sons, Inc.

Critical Path Method—Crashing a Project  Time

and costs are interrelated  Faster an activity is completed, more is the cost  Change the schedule and you change the budget  Thus many activities can be speeded up by spending more money 8-2

What is Crashing / Crunching?  To

speed up, or expedite, a project  Of course, the resources to do this must be available  Crunching a project changes the schedule for all activities  This will have an impact on schedules for all the subcontractors  Crunching a project often introduces unanticipated problems 8-3

Activity Slope

Crash Cost  Normal Cost Slope  Crash Time  Normal Time

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An Example of Two-Time M

Table 9-1

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Activity Slopes—Cost per Period for Crashing

Table 9-2

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Crashing the Project

Figure 9-1a

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Seven Day Schedule

Figure 9-1b

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Six Day Schedule

Figure 9-1c

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Five Day Schedule

Figure 9-1d

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Four Day Schedule

Figure 9-1e

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Cost-Crash Curve

Figure 9-2

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Fast-Tracking  Fast-tracking

is another way to expedite a

project – –

Mostly used for construction projects Can be used in other projects

 Refers

to overlapping design and build phases  Increases number of change orders  Increase is not that large 8-13

The Resource Allocation Problem  M/PERT

ignore resource utilization and availability  With external resources, this may not be a problem  It is, however, a concern with internal resources  Schedules need to be evaluated in of both time and resources 8-14

Time Use and Resource Use  Time

limited: A project must be finished by a certain time  Resource limited: A project must be finished without exceeding some specific level of resource usage  System-constrained: A project has fixed amount of time and resources 8-15

Resource Loading  Resource

loading describes the amount of resources an existing schedule requires  Gives an understanding of the demands a project will make of a firm’s resources

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Resource A

Figure 9-6a

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Resource B

Figure 9-6b

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Resource Leveling  Less

hands-on management is required  May be able to use just-in-time inventory  Improves morale  Fewer personnel problems  When an activity has slack, we can move that activity to shift its resource usage

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Resource Leveling Continued  May

also be possible to alter the sequence of activities to levelize resources  Small projects can be levelized by hand  Software can levelize resources for larger projects  Large projects with multiple resources are complex to levelize 8-20

Constrained Resource Scheduling Heuristic Approach

An approach, such as a rule of thumb, that yields a good solution that may or may not be optimal

Optimization An approach, such as Approach linear programming, that yields the one best solution. 8-21

Heuristic Methods  They

are the only feasible methods used to attack large projects  While not optimal, the schedules are very good  Take the M/PERT schedule as a baseline

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Heuristic Methods Continued  They

sequentially step through the schedule trying to move resource requirements around to levelize them  Resources are moved around based on one or more priority rules

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Common Priority Rules  As

soon as possible  As late as possible  Shortest task first  Most resources first  Minimum slack first  Most critical followers  Most successors  Arbitrary 8-24

Heuristic Methods Continued  These

are just the common ones  There are many more  The heuristic can either start at the beginning and work forwards  Or it can start at the end and work backwards

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Optimization Methods  Finds

the one best solution  Uses either linear programming or enumeration  Not all projects can be optimized

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Multi-Project Scheduling and Resource Allocation  Scheduling

and resource allocation problems increase with more than one project  The greater the number of projects, the greater the problems  One way is to consider each project as the part of a much larger project

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Multi-Project Scheduling and Resource Allocation Continued  However,

different projects have different goals so combining may not make sense  Must also tell us if there are resources to tackle the new projects we are considering

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Standards to Measure Schedule Effectiveness   

Schedule slippage Resource utilization In-process inventory

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Schedule Slippage  The

time past a project’s due date  Slippage may cause penalties  Different projects will have different penalties  Expediting one project can cause others to slip  Taking on a new project can cause existing projects to slip 8-30

Resource Utilization  The

percentage of a resource that is actually used  We want a schedule that smoothes out the dips and peaks of resource utilization  This is especially true of labor, where hiring and firing is expensive

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In-Process Inventory  This

is the amount of work waiting to be processed because there is a shortage of some resource  Similar to WIP in manufacturing  Holding cost is incurred

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Heuristic Techniques  Multi-projects

are too complex for optimization approaches  Many of the heuristics are extensions of the ones used for one project

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Additional Priority Rules  Resource

scheduling method  Minimum late finish time  Greatest resource demand  Greatest resource utilization  Most possible jobs

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Goldratt’s Critical Chain 1. 2. 3. 4.

Thoughtless optimism Capacity should be equal to demand The “Student Syndrome” Multitasking to reduce idle time

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Goldratt’s Critical Chain Continued 5. 6. 7. 8.

Assuming network complexity makes no difference Management cutting time to “motivate” workers Game playing Early finishes not canceling out late finishes 8-36