9-1 Resource Allocation Some definitions Resource allocation, loading, leveling Expediting and crashing projects Goldratt’s “Critical Chain”

9-2 Some Definitions Resource allocation permits efficient use of physical assets Within a project, or across multiple projects Drives both the identification of resources, and timing of their application There are generally two conditions: “Normal” “Crashed”

9-3 Normal and Crashing Normal: Most likely task duration, like “m” in Chapter 8 Crash: Expedite an activity, by applying additional resources Specialized or additional equipment More people (e.g., borrowed staff, temps) More hours (e.g., overtime, weekends)

9-4 No Free Lunch: Crashing Creates a Ripple Effect Crashing buys time, but nothing comes free Potential cost areas Additional equipment/material Extra labor Negative effects on other projects Reduced morale, from excessive hours/shifts Lower quality, from the pressure of time, inexperienced and tired staff “If you want it bad, you’ll get it bad...”

9-5 Case: Architectural Associates, Inc. Projects uniformly run late, thus over budget Is that the problem, or just the symptom?

9-6 Case: Architectural Associates, Inc. (cont’d) PROBLEM: Deterministic task schedules cause workers to plan to meet schedule – nothing more, nothing less Parkinson’s Law: “Work expands to fill the time available.” RESULT: Issues arising early in each task can be worked around, but late-occurring issues can’t be absorbed in schedule And most issues do arise late

9-7 Case: Architectural Associates, Inc. (concluded) The Solution: Use probabilistic time estimates (optimistic, pessimistic, most likely) Have staff schedule work for effectiveness and efficiency, not just to fill x-number of days

9-8 When Trying to Crash a Project... Two basic principles 1. Generally, focus on the critical path Usually not helpful to shorten non-critical activities Exception: When a scarce resource is needed elsewhere, e.g., in another project 2. When shortening project duration, choose least expensive way to do it

9-9 Compute Cost per Day of Crashing a Project Compute cost/time slope for each expeditable activity Slope = crash cost – normal cost crash time – normal time

9-10 An Example (Table 9-1) ActivityPredecessorDays (normal, crash) Cost (normal, crash) a-3, 2$40, 80 ba2, 120, 80 ca2, 220, 20 d*a4, 130, 120 e**b3, 110, 80 * Partial crashing allowed ** Partial crashing not allowed

9-11 Example (cont’d): Cost per Day to Crash (Table 9-2) Activity$ Saved/ Day a40 b60 c- d30 e70 (2 days)

9-12 A CPM Example, Figure 9-1

9-13 Another Approach to Expediting: Fast-tracking/Concurrency Different terms for similar concept “Fast-tracking” (construction), “Concurrent engineering” (manufacturing) Both refer to overlapping project phases E.g., design/build, or build/test

9-14 CPM Cost-Duration, Figure 9-2

9-15 Fast-tracking/Concurrency (cont’d) Pros: Can shorten project duration Can reduce product development cycles Can help meet clients’ demands Cons: Can increase cost through redesigns, excessive changes, rework, out-of- sequence installation, and more

9-16 “Cost, Schedule, or Performance: Pick Any Two...” Assuming fixed performance specifications, tradeoff areas must be in time or cost Time-limited or resource-limited If all three dimensions are fixed, the system is “overdetermined” Normally, no tradeoffs are possible But, something has to give...

9-17 Resource Loading Resource loading: types and quantities of resources, spread by schedule across specific time periods One project, or many Identifies and reduces excess demands on a firm’s resources

9-18 Resource Usage Calendar, Figure 9-3

9-19 AOA Network, Figure 9-4

9-20 Modified PERT/CPM AOA, Figure 9-5

9-21 Resource Leveling Resource leveling minimizes period-by-period variations in resource loading, by shifting tasks within their slack allowances Advantages Less day-to-day resource manipulation needed Better morale, fewer HR problems/costs Leveling resources also levels costs, simplifies budgeting and funding

9-22 Load Diagrams, Figure 9-6

9-23 Network Before and After Resource Loading, Figure 9-7

9-24 Load Diagrams, Figure 9-8

9-25 Resource Loading Chart, Figure 9-9

9-26 Constrained Resource Scheduling Two basic approaches Heuristic Rule-based, rules of thumb Priority rules, tie-breakers Optimization Not finding an answer that works, but the best answer

9-27 MSP Gantt with Resources, Figure 9-10

9-28 MSP Load Diagram, Showing Resource Conflict, Figure 9-11

9-29 MSP Load Diagram, Leveled, Figure 9-12

9-30 Network for Resource Load Simulation, Figure 9-13

9-31 Load Chart, Figure 9-14

9-32 Task a Decomposed, Figure 9-15

9-33 Hierarchy of Gantt Charts, Figure 9-16

9-34 Sources and Uses of Resources, Figure 9-17

9-35 Project Life Cycles, Figure 9-18

9-36 Flow Diagram for SPAR-1, Figure 9-19

9-37 Goldratt’s Critical Chain There are systemic problems that plague project schedule performance These problems are not randomly distributed If they were random, there would be as many projects finishing early as late

9-38 Some Systemic Causes of Late Projects 1. Thoughtless Optimism Overpromising at project start “Success-oriented” schedules Lack of management reserves 2. Setting capacity equal to demand Ignoring concepts of resource loading and leveling

9-39 Some Systemic Causes of Late Projects (cont’d) 3. “The Student Syndrome” Delaying start of non-critical tasks Parkinson’s Law: “Work expands to fill the time available” 4. Multitasking to reduce idle time Switching back and forth between projects creates delays

9-40 Some Systemic Causes of Late Projects (concluded) 5. Complexity of schedule drives delay Uncertainty and complex paths join to make trouble 6. People need reason to strive There’s often no advantage seen to finishing early 7. Game playing E.g., lower levels pad estimates, senior management slashes them Both can be equally arbitrary