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Project Management A Managerial Approach Chapter 9 Resource Allocation.

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Presentation on theme: "Project Management A Managerial Approach Chapter 9 Resource Allocation."— Presentation transcript:

1 Project Management A Managerial Approach Chapter 9 Resource Allocation

2 Critical Path Method - Crashing a Project zCPM includes a way of relating the project schedule to the level of physical resources allocated to the project zThis allows the project manager to trade time for cost, or vice versa zIn CPM, two activity times and two costs are specified, if appropriate for each activity

3 Critical Path Method - Crashing a Project zThe first time/cost combination is called normal, and the second set is referred to as crash zNormal times are normal in the same sense as the m time estimate of the three times used in PERT zCrash times result from an attempt to expedite the activity by the application of additional resources

4 Critical Path Method - Crashing a Project zCareful planning is critical when attempting to expedite (crash) a project zExpediting tends to create problems; and the solution to one problem often creates several more problems that require solutions zSome organizations have more than one level of crashing

5 Fast-Tracking zAnother way to expedite a project is known as fast-tracking zIt refers to overlapping the design and build phases of a project zBecause design is usually completed before construction starts, overlapping the two activities will result in shortening the project duration

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

7 The Resource Allocation Problem zSchedules should be evaluated not merely in terms of meeting project milestones, but also in terms of the timing and use of scarce resources zA 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

8 The Resource Allocation Problem zThe extreme points of the relationship between time use and resource use are these: yTime 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 yResource Limited:The project must be finished as soon as possible, but without exceeding some specific level of resource usage or some general resource constraint

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

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

11 Resource Loading zAn excellent guide for early, rough project planning zBecause 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 budget zThe action plan links the schedule directly to specific demands for resources

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

13 Resource Leveling zResource leveling aims to minimize the period- by-period variations in resource loading by shifting tasks within their slack allowances zThe purpose is to create a smoother distribution of resource usage zSeveral advantages include: yLess hands-on management is required yMay be able to use a just-in-time inventory policy

14 Resource Leveling zWhen resources are leveled, the associated costs also tend to be leveled zThe 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 firm zResource leveling is a procedure that can be used for almost all projects, whether or not resources are constrained

15 Constrained Resource Scheduling zThere are two fundamental approaches to constrained allocation problems: yHeuristic Methods yOptimization Models zHeuristic approaches employ rules of thumb that have been found to work reasonably well in similar situations zOptimization approaches seek the best solutions but are far more limited in their ability to handle complex situations and large problems

16 Heuristic Methods zHeuristic approaches to constrained resource scheduling problems are in wide, general use for a number of reasons: y1. They are the only feasible methods of attacking the large, nonlinear, complex problems that tend to occur in the real world of project management y2. While the schedules that heuristics generate may not be optimal, they are usually quite good- certainly good enough for most purposes

17 Heuristic Methods zMost heuristic solution methods start with the PERT/CPM schedule and analyze resource usage period by period, resource by resource zIn a period when the available supply of a resource is exceeded, the heuristic examines the tasks in that period and allocates the scarce resource to them sequentially, according to some priority rule zTechnological necessities always take precedence

18 Heuristic Methods zCommon priority rules: yAs soon as possible yAs late as possible yShortest task first yMost resources first yMinimum slack first yMost critical followers yMost successors yArbitrary

19 Heuristic Methods zMost priority rules are simple adaptations of the heuristics used for the traditional job shop scheduling problem of production/operations management zMost heuristics use a combination of rules: a primary rule, and a secondary rule to break ties zAs the scheduling heuristic operates, one of two events will result: yThe routine runs out of activities before it runs out of resources yThe routine runs out of resources before all activities have been scheduled

20 Optimizing Methods zThe methods to find an optimal solution to the constrained resource scheduling problem fall into two categories: yMathematical programming yEnumeration zMathematical programming can be thought of as liner programming (LP) for the most part

21 Optimizing Methods zLinear programming is usually not feasible for reasonably large projects where there may be a dozen resources and thousands of activities zIn the late 1960s and early 1970s, limited enumeration techniques were applied to the constrained resource problem zTree search, and branch and bound methods were devised to handle up to five resources and 200 activities

22 Multiproject Scheduling and Resource Allocation zThe most common approach to scheduling and allocating resources to multiple projects is to treat the several projects as if they were each elements of a single large project zAnother way of attacking the problem is to consider all projects as completely independent zTo describe such a system properly, standards are needed by which to measure scheduling effectiveness

23 Multiproject Scheduling and Resource Allocation zThree important parameters affected by project scheduling are: ySchedule slippage yResource utilization yIn-process inventory zThe organization (or the project manager) must select the criterion most appropriate for its situation

24 Multiproject Scheduling and Resource Allocation zSchedule slippage, often considered the most important of the criteria, is the time past a projects due date or delivery date when the project is completed zResource utilization is of particular concern to industrial firms because of the high cost of making resources available zThe amount of in-process inventory concerns the amount of work waiting to be processed because there is a shortage of some resource

25 Multiproject Scheduling and Resource Allocation zAll criteria cannot be optimized at the same time zAs usual, the project manager will have to make trade-offs among the criteria zA firm must decide which criterion to evaluate its various scheduling and resource allocation options

26 Mathematical Programming zMathematical programming can be used to obtain solutions to certain types of multiproject scheduling problems zThese procedures determine when an activity should be scheduled, given resource constraints zMathematical programming, however, is rarely used in project management to handle the multiproject problem (mostly, heuristics are used)

27 Mathematical Programming zThe three most common objectives of mathematical programming are: y1. Minimum total throughput time (time in the shop) for all projects y2. Minimum total completion time for all projects y3. Minimum total lateness or lateness penalty for all projects zThese objectives are most appropriate for job shop type solutions to resource constraints

28 Heuristic Techniques zThere are scores of different heuristic-based procedures in existence zThey represent rather simple extensions of well-known approaches to job-shop scheduling: yResource Scheduling Method yMinimum late finish time yGreatest resource demand yGreatest resource utilization yMost possible jobs

29 Summary zThe critical path method (CPM) is a network constructed in the same manner as PERT but considers the possibility of adding resources to tasks to shorten their duration zThe resource allocation problem is concerned with determining the best trade-offs between available resources, including time, throughout the duration of the project

30 Summary zResource loading is the process of calculating the total load from project tasks on each resource for each time period of the projects duration zResource leveling is concerned with evening out the demand for various resources required in a project by shifting tasks within their slack allowances Chapter 9-29

31 Summary zThere are two basic approaches to addressing the constrained resources allocation problem: yHeuristic methods yOptimizing methods zFor multiproject scheduling, three important measures of effectiveness are schedule slippage, resource utilization, and level of in- process inventory

32 Summary zWhen a new project is added to a multiproject system, the amount of slippage is directly related to the average resource load zMathematical programming models for multiproject scheduling aim to either minimize total throughput time for all projects, minimize the completion time for all projects, or minimize total lateness for all projects

33 Resource Allocation Questions?

34 Resource Allocation Picture Files

35 Resource Allocation Figure 9-1

36 Resource Allocation Figure 9-2

37 Resource Allocation Figure 9-3

38 Resource Allocation Figure 9-4

39 Resource Allocation Figure 9-5

40 Resource Allocation Figure 9-6

41 Resource Allocation Figure 9-7

42 Resource Allocation Figure 9-8

43 Resource Allocation Figure 9-9a

44 Resource Allocation Figure 9-9b

45 Resource Allocation Figure 9-10

46 Resource Allocation Figure 9-11

47 Resource Allocation Figure 9-12

48 Resource Allocation Figure 9-13

49 Resource Allocation Figure 9-14

50 Resource Allocation Figure 9-15

51 Resource Allocation Figure 9-16

52 Resource Allocation Table Files

53 Resource Allocation



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