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
8–5
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
A
5,000 4 weeks
4,000 3 weeks
B*
10,000 5 weeks
3,000 4 weeks
C
3,500 2 weeks
3,500
D*
4,500 6 weeks
4,000 4 weeks
E*
1,500 3 weeks
2,500 2 weeks
F
7,500 8 weeks
5,000 7 weeks
G*
3,000 7 weeks
2,500 6 weeks
H
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
manager’s 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 firm’s 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 manager’s 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
A
5
0
6
30
B
4
1
2
8
C
5
0
4
20
D
6
3
3
18
E
6
1
3
18
F
6
0
2
12
G
4
3
4
16
H
7
0
3
21
I
5
3
4
20
J
3
5
2
6
K
5
0
5
25
Total
194
Resource Leveling Example
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 activity’s 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
A
D
B
2
C
2
4
Resource
imbalance
F
E
6
8 10 12
Project Days
14
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
A
B
2
C
2
4
D
C
F
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