MANAGING PROJECT

RESOURCES

Project Crashing
The process of accelerating a project is
referred as crashing.
Crashing a project relates to resource
commitment; the more resources expended, the
faster the project will finish.
There are several reasons to crash a project:
Initial schedule was too optimistic
Market needs change and the project is in demand
earlier than anticipated
The project has slipped considerably behind
schedule
There are contractual late penalties

Project Crashing
Principal methods for crashing are:
Improving existing resources productivity
Changing work methods
Increasing the quantity of resources
Increasing the quantity of resources is the
most commonly used method for project
crashing. There are 2 approaches:
Working current resources for longer hours
(overtime, weekend work, etc.)
Adding more personnel

Project Crashing
Fully expedited (no expense is spared)

Crash
Point
Crashed

Cost
Normal
Point
Normal

Crashed

Normal

Activity Duration

Time-Cost Trade-Offs for Crashing Activities

Project Crashing
In analyzing crash options, the goal is to find
the point at which time and cost trade-offs are
optimized.
Various combinations of time-cost trade-offs
for crash options can be determined by using
the following formula:
Slope = crash cost normal cost
normal time crash time

Project Crashing Example

SUPPOSE:
NORMAL ACTIVITY DURATION = 8 WEEKS
NORMAL COST = $14,000
CRASHED ACTIVITY DURATION = 5 WEEKS
CRASHED COST = $23,000
THE ACTIVITY COST SLOPE =
23,000 14,000 OR
$9,000 = $3,000 per week
85
3
Cease crashing when
the target completion time is reached
the crash cost exceeds the penalty cost

Project Crashing Example

Normal
Activity Duration
A
4 days
B
5 days
C
3 days
D
7 days
E
2 days
F
5 days
G
9 days

Cost
$1,000
$2,500
$750
$3,500
$500
$2,000
$4,500

Crashed
Duration
Cost
3 days
$2,000
3 days
$5,000
2 days
$1,200
5 days
$5,000
1 day
$2,000
4 days
$3,000
7 days
$6,300

a) Calculate the per day costs for crashing each activity

b) Which are the most attractive candidates for crashing?
Why?

Project Crashing Example

Activity
A
B
C
D
E
F
G

Per Day Cost

$1,000
$1,250
$450
$750
$1,500
$1,000
$900

Project Crashing Example

Normal
Activity

Crashed

Cost Duration

Extra Duration
Cost

5,000 4 weeks

4,000 3 weeks

B*

10,000 5 weeks

3,000 4 weeks

3,500 2 weeks

3,500

D*

4,500 6 weeks

4,000 4 weeks

E*

1,500 3 weeks

2,500 2 weeks

7,500 8 weeks

5,000 7 weeks

G*

3,000 7 weeks

2,500 6 weeks

2,500 6 weeks

3,000 5 weeks

1 week

When deciding on whether or not to crash project activities,

a project manager was faced with the following information.
Activities of the critical path are highlighted with an asterisk:

Project Crashing Example

The correct sequence for crashing activities
is listed as:
1. Activity E or G (they both cost
$2,500 more)
2. Activity E or G
3. Activity B
4. Activity D

Project Crashing Example

Suppose project overhead costs accrued at a fixed rate of $500 per
week.
Assume that a project penalty clause kicks in after 19 weeks.
The penalty charged is $5,000 per week.
Duration

Direct Penalties
Costs

Overhead

Total

21
weeks

37,500

10,000

10,500

58,000

20
weeks

40,000

5,000

10,000

55,000

19
weeks

42,500

-0-

9,500

52,000

18
weeks

45,500

-0-

9,000

54,000

16
weeks

49,500

-0-

8,000

56,500

Resource Allocation Problem

A shortcoming of most scheduling procedures
is that they do not address the issues of
resource utilization and availability.
Scheduling procedures tend to focus on time
rather than physical resources.

Resource Allocation Problem

Schedules should be evaluated not merely in
terms of meeting project milestones, but also in
terms of the timing and use of scarce
resources.
A 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.
I can shorten this project by 1 day at a cost of
$400. Should I do it?

Resource Allocation Problem

The extreme points of the relationship between
time use and resource use are the following:
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 critical
Resource Limited: The project must be
finished as soon as possible, but without
exceeding some specific level of resource
usage or some general resource constraint

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

Resource Loading
The project manager must be aware of the
flows of usage for each input resource
throughout the life of the project.
It is the project managers responsibility to
ensure that the required resources, in the
required amounts, are available when and
where they are needed.

Resource Loading Table

Resource Leveling (Smooting)

Resource leveling aims to minimize the
period-by-period variations in resource loading
by shifting tasks within their slack allowances.
The purpose is to create a smoother
distribution of resource usage.
Resource leveling, referred to as resource
smoothing, has two objectives:
To determine the resource requirements so that
they will be available at the right time,
To allow each activity to be scheduled with the
smoothest possible transition across usage levels.

Resource Leveling (Smooting)

Resource management is a multivariate,
combinatorial problem, i.e. multiple solutions
with many variables, the mathematically optimal
solution may be difficult or infeasible.
More common approach to analyzing
resource leveling problems is to apply some
resource leveling heuristics.

Resource Leveling Heuristics

Prioritizing resource allocation include
applying resources to activities:
with the smallest amount of slack
with the smallest duration
that start earliest
with the most successor tasks
requiring the most resources

Resource Leveling Steps

Create a project activity network diagram
Create a table showing the resources required
for each activity, durations, and the total float
available
Develop a time-phased resource loading table
Identify any resource conflicts and begin to
smooth the loading table using one or more
heuristics

Resource Leveling Example

Critical path:A-C-F-H-K

Resource Leveling Example

Critical path:A-C-F-H-K

Resource Leveling Example

Activity

Duration

Total Float

Resource Hours
Needed Per Week

Total Resources
Required

30

20

18

18

12

16

21

20

25

Total

194

Resource Leveling Example

Resource Requirements

12
10
8
6
4
2
0
1

11

13

15

17

Project Days

19

21

23

25

27

Resource Leveling Example

On day 10 the required resource hours is 10
If project is budgetted for up to 10 resource
units per day, then it is acceptable.
C, D, and E are all scheduled on this day and
have require 4, 3, and 3 hours respectively
Which activity should be adjusted?
C is on the critical path
E has 1 day slack
D has 3 days of slack (we can split the
activity)

Resource Leveling Example

Resource Loading Chart

Another way to create a visual diagram of
resource management problem is to use
resource-loading charts.
Resource conflicts can be seen in the
resource-loading charts.
They are used to display the amount of
resources required as a function of time on a
graph.
Each activitys resource requirements are
represented as a block (resource requirement
over time).

Resource Loading Chart

Resource limit is set at 8 hourly units per day.
Display the amount of resources required as a function of
time.
4 B 5
Res = 2
0 A 4
Res = 6

5 D 9
Res = 7

9 E 11
Res = 3

1. Start with a
network diagram
4 C 7
Res = 2

11 F 12
Res = 6

Resource Loading Chart

Activity

A
B
C
D
E
F

Resource

6
2
2
7
3
6

Duration

ES

Slack

LF

4
1
3
4
2
1

0
4
4
5
9
11

0
0
4
0
0
0

4
5
11
9
11
12

2. Produce a table that shows the

duration, early start, late finish,
slack, and resource(s) required for
each activity.

Resource Loading Chart

3. Draw an initial loading chart with
each activity scheduled at its ES.

Resources

8
6
4

2
C
2

F
E

6
8 10 12
Project Days

14

Resource
imbalance

Resource Loading Chart

4. Rearrange activities within their slack
to create a more level profile. Splitting
C creates a more level project.

Resources

8
6
4

2
C
2

E
6
8 10 12
Project Days

14

Resource Loading Chart

Critical Chain Project Management

Critical Chain Project Management (CCPM), which
was developed and publicized by Dr. Eliyahu M.
Goldratt (1997) in his book Critical Chain, is a novel
approach for managing projects.
Goldratt is well known in the operations management
community as the inventor of the Theory of Constraints
(TOC).
TOC is a tool for managing repetitive production
systems based on the principle that every system has a
constraint, and system performance can only be
improved by enhancing the performance of the
constraining resource.

Critical Chain Project Management

CCPM identifies the critical chain as the set of
tasks that results in the longest path to project
completion after resource leveling.
CCPM is the same as conventional project
management except for the terminology "critical
chain", which would otherwise be called the
"leveled critical path".

Critical Chain Project Management

CCPM planning consists of recalculating the project
schedule based on shortened task duration estimates.
The rationale for shortening the original duration estimates
is as follows:
all tasks in the project are subject to some degree of
uncertainty
when asked to provide an estimate of the duration, the task
owner adds a safety margin in order to be almost certain of
completing the task on time. This means that, in general, task
durations are overestimated
In most cases, the task will not require the entire amount of
safety margin and should be completed sooner than scheduled
Because the safety margin is internal to the task, if it is not
needed, it is wasted.

Critical Chain Project Management

For project plan execution, CCPM prescribes the
following principles:
Resources working on critical chain tasks are
expected to work continuously on a single task at a
time. They do not work on several tasks in parallel or
suspend their critical tasks to do other work
Resources are to complete the task assigned as
soon as possible, regardless of scheduled dates

Critical Chain Project Management

If the task is completed ahead of schedule, work on
its successor is to begin immediately. If the task
successor utilizes a critical resource for which a
resource buffer has been defined, advance warning is
provided to that resource at the point in time where
the resource buffer begins
If the task is completed past its planned completion
date, as shown on the CCPM schedule, this is no
reason for immediate concern, as the buffer will
absorb the delay.
Source: http://en.wikipedia.org/wiki/Critical_chain