copyright 2012 john wiley & sons, inc. chapter 9 resource allocation
TRANSCRIPT
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Copyright 2012 John Wiley & Sons, Inc.
Chapter 9
Resource Allocation
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Critical Path Method—Crashing a Project
Time and costs are interrelatedFaster an activity is completed, more is
the costChange the schedule and you change the
budgetThus many activities can be speeded up
by spending more money
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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
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Activity Slope
Crash Cost Normal Cost
Crash Time Normal TimeSlope
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An Example of Two-Time CPM
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
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The Resource Allocation Problem
CPM/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 terms of both time and resources
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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
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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 requiredMay be able to use just-in-time inventory Improves moraleFewer personnel problemsWhen 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 handSoftware can levelize resources for larger
projectsLarge projects with multiple resources are
complex to levelize
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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 Approach
An approach, such as linear programming, that yields the one best solution.
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Heuristic Methods
They are the only feasible methods used to attack large projects
While not optimal, the schedules are very good
Take the CPM/PERT schedule as a baseline
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Optimization Methods
Finds the one best solutionUses either linear programming or
enumerationNot 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 dateSlippage may cause penaltiesDifferent projects will have different
penaltiesExpediting one project can cause others
to slipTaking on a new project can cause
existing projects to slip
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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 (work in progress) 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