EMGT 5220

Engineering Project Management

Resource Allocation

Tahmina Ferdousi Lipi

 What is Resource Allocation?
Will discuss the issues involved in developing a project
plan and schedule in the face of constrained resources
(people or facilities).

• Allocating resources (human, technical, etc.) to projects

• Used in both individual and multiple, simultaneous projects
• Relates to scheduling and costs – time is a resource too
• Resource Allocation can help avoid project delay and cost of
excess resources

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 Critical Path Method
• Time and costs are interrelated in a project
• Faster an activity is completed, more is the
cost
• Change the schedule and you change the
budget
• Thus 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
• Process of attempting to shorten project activities and in
turn the overall project by assigning additional resources
(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
• Used to determine if crashing makes sense
• Does not take risks into consideration that
may be associated with crashing

Crash Cost  Normal Cost

Slope 
Crash Time  Normal Time

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 Example of Two-Time CPM

Crash Cost  Normal Cost

Slope 
Crash Time  Normal Time

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Exercise 1: Given the following network, determine the first activity to be crashed
by the following priority rules:
(a) Shortest task first
(b) Minimum slack first
(c) Most critical followers
(d) Most successors

a) B is the shortest task.

b) B, C, or D all have zero slack.
c) B has the most critical followers, 2.
d) B has the most successors, 2.
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Exercise 2: Using the network above and the additional information below,
find:
(a) The crash cost per day
(b) Which activities should be crashed to meet a project deadline of 13
days at minimum cost? Assume partial crashing is allowed.

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 Activity Crash Days Δ Crash $Δ Crash $/Day
A 1 $200.00 $200.00
B 2 $75.00 $37.50
C 3 $150.00 $50.00
D 2 $100.00 $50.00

b) Task B is on the critical path and it has the lowest cost per day $37.50 to crash
(additional cost of $75.00). It enables a 13-day completion without making any other new
tasks critical.

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Exercise 4: Given the following highway rerouting project,

(a) Draw the network.

(b) Find the ESs, LSs, and slacks.
(c) Find the critical path.
(d) If the project has a 1 1/2-year deadline for reopening, should we consider
crashing some activities? Explain.
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c) The critical path is B, D, G
d) On the surface the answer is no, since the duration as calculated is
one month less than the project deadline requires. It would be prudent,
however, to perform analysis as described in Chapter 8 to determine the
probability of actually achieving this schedule. Based on that analysis it
may in fact be prudent to crash some activities 11
 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 some specific level of resource usage

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 The Resource Allocation Problem
• Fixed. If all three variables—time, cost, scope
(specifications)—are fixed, the system is “overdetermined.”
• On occasion, it may be that one or more tasks in a project are
system-constrained. A system-constrained task requires a
fixed amount of time and known quantities of resources.
– The material must “cook” for a specified time to achieve the desired
effect.
• The only matter of interest in these cases is to make sure that
the required resources are available when needed.

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 Resource Loading
• Resource loading describes the amount of resources
an existing schedule requires during specific time
periods.
• Gives an understanding of the demands a project will
make of a firm’s resources
• it is also a first step in attempting to reduce excessive
demands on certain resources, regardless of the
specific technique used to reduce the demands.

8-15
 Resource Loading

the use of
resources on a
project is often
nonlinear.
8-16
 Resource Usage Calendar

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 Resource A

8-18
 Resource B

8-19
 Resource Leveling
• minimize the period-by-period variations in resource
loading by shifting tasks within their slack allowances
• May also be possible to alter the sequence of
activities to levelize resources
• Small projects can be levelized by hand
• Software can levelize resources for larger projects
• Large projects with multiple resources are complex
to levelize

8-20
 Resource Leveling-Benefits
• Less hands-on management is required
• Have the supplier furnish constant amounts
• May be able to use just-in-time inventory
• Improves morale
• Fewer personnel problems
• When resources are leveled, the associated
costs also tend to be leveled (hiring and layoff)

8-21
 Resource Leveling

8-22
 Resource Loading/Leveling and
Uncertainty
• Resource availability, needs, etc may fluctuate over
time such that resources required and capacity
available may not be constant
• Methods to address this issue:
– Attempt to level demand
– Alter supply of human resource availability
• Disruptions, emergencies, maintenance, personnel
issues, inefficiencies
• Schedule scarce resources between 85-90% capacity
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 Constrained Resource Scheduling
Failure to include resource availability in risk identification
activities causes resource constraints. Two methods to
scheduling in a constrained resource environment:

Heuristic Approach An approach, such as a rule of

thumb, that yields a good solution
that may or may not be optimal

Optimization An approach, such as linear

Approach programming, that yields the one
best solution.
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 Heuristic Methods
• They apply rules of thumb to determine which
activity should receive constrained resources first
• They are the only feasible methods used to attack
large projects
• Take the CPM/PERT schedule as a baseline
• They sequentially step through the schedule trying to
move resource requirements around to levelize them
• Resources are moved around based on one or more
priority rules

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 Common Priority Rules
• As soon as possible: Default rule
• As late as possible
• Shortest task first
• Most resources first
• Minimum slack first: Works Best
• Most critical followers
• Most successors
• Arbitrary

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 Heuristic Methods Continued
• These are just the common ones
• There are many more
• The heuristic can either start at the beginning
and work forward
• Or it can start at the end and work backwards
• They can also employ simulation techniques,
where a number of possibilities are tested and
the best is kept
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 Optimizing Methods
Optimization attempts to calculate the best
solution using mathematical models.
• Finds the one best solution
• Uses either linear programming or enumeration
but are only applicable to relatively small
projects
• Not all projects can be optimized

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