Project ManagementA Managerial Approach

Resource Allocation

The Resource Allocation ProblemA shortcoming of most scheduling procedures is that they do not address the issues of resource utilization and availabilityScheduling procedures tend to focus on time rather than physical resourcesTime itself is always a critical resource in project management, one that is unique because it can neither be inventoried nor renewed

The 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 resourcesA 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

The Resource Allocation ProblemThe extreme points of the relationship between time use and resource use are these: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

The Resource Allocation ProblemIf all three variables - time, cost, specifications - are fixed, the system is overdeterminedIn this case, the project manager has lost all flexibility to perform the trade-offs that are so necessary to the successful completion of projectsA system-constrained task requires a fixed amount of time and known quantities of resources

Resource LoadingResource loading describes the amounts of individual resources an existing schedule requires during specific time periodsThe loads (requirements) of each resource type are listed as a function of time periodResource loading gives a general understanding of the demands a project or set of projects will make on a firms resources

Resource LoadingAn excellent guide for early, rough project planningBecause the project action plan is the source of information on activity precedences, durations, and resources requirements, it is the primary input for both the project schedule and its budgetThe action plan links the schedule directly to specific demands for resources

Resource LoadingThe PERT/CPM network technique can be modified to generate time-phased resource requirementsThe project manager must be aware of the ebbs and flows of usage for each input resource throughout the life of the projectIt is the project managers responsibility to ensure that the required resources, in the required amounts, are available when and where they are needed.

Resource LevelingResource leveling aims to minimize the period-by-period variations in resource loading by shifting tasks within their slack allowancesThe purpose is to create a smoother distribution of resource usageSeveral advantages include: Less hands-on management is requiredMay be able to use a just-in-time inventory policy

Resource LevelingWhen resources are leveled, the associated costs also tend to be leveledThe project manager must be aware of the cash flows associated with the project and of the means of shifting them in ways that are useful to the parent firmResource leveling is a procedure that can be used for almost all projects, whether or not resources are constrained

Resource Allocation

Figure 9-3

Procedure for resource leveling1324a,2b,3c,5(4)(2)(2)abc 1 2 3 4 5 days86420workersacccbb

After levelingabc

86420workers 1 2 3 4 5 daysabc

HEURISTIC METHODSHeuristic methods----usually rules of thumbs----give better solution. These approaches are generally used because only feasible methods of attacking the large,nonlinear, complex problems that tend to occur in the real world of project. Most heuristic solution methods start with the PERT/CPM schedule and analyze resource usage period by period, resource by resource. In a period when the available supply of a resource is exceeded, the heuristic examines the tasks in that period and allocates the scarce resources to them sequentially, according to some priority rule.The major difference among the heuristics is in the priority rules that they use.Technological necessity always takes precedence.

SOME PRIORITY RULES

As soon as possible- provides general solution for critical path & time.As late as possible-the purpose of this is to defer cash outflow as long as possible.Shortest task first- this will maximize the number of tasks that can be completed by a system during some time period.Most resources first- the assumption behind this rule is that more important tasks usually place a higher demand on scarce resources.Minimum slack first- ties are broken by using the shortest task first rule. Most critical followers- the ones with greatest no. of critical followers go first.

BEST / NEAR BEST SOLUTION

Exercise 4The following table gives the activities in a construction project and other relevant information.A) Draw an arrow diagram for the projectB) Determine the project duration which will return in minimum total project cost

Indirect costs vary as follows- Days151413121110987 6 Cost60050040025017510075503525

ActivityPredNormal TCrash TNormal TCrash TA-436090B-64150250C-213860DA53150250EC22100100FA75115175GD,B,E42100240