Chapter 8
SCHEDULING RESOURCES AND COSTS
Chapter Outline
*This chapter examines methods of scheduling resources so the team can make realistic
judgments of resource availability and project durations.
1. Overview of the resource scheduling problem
Once staff and other resources are assigned to a project, the PM may list questions
that still need to be addressed, such as:
1) Will the assigned labor and/or equipment be adequate and available
for my project?
2) Will outside contractors have to be used?
3) Do unforeseen resource dependencies exist?
4) How much flexibility do we have in using the resources?
5) Is the original deadline realistic?
*A good project scheduling system should help in finding quick easy answers to
these questions.
Resource Problems:
*If resources are adequate but the demand varies, it may be desirable to delay
noncritical activities to lower the peak demand. This process is called Resource
Leveling or Smoothing.
*On the other hand, if resources are not adequate to meet peak demands, the start
of some activities must be delayed. This process is called Resource Constrained
Scheduling.
*The absence or shortage of resources can drastically alter a project.
*If one person has to perform all activities, the resource constraint requires the
activities to be performed in Sequence or Series. They cannot be occurring in
Parallel.
*If only one person at a time can be performing an activity that a few are schedule
to be performing, then Sequencing must be performed.
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2. Types of resource constraints
Resources are people, equipment, and materials that can be drawn on to
accomplish something. In projects, the availability or unavailability of resources
will often influence the way projects are managed.
1) People: This the most obvious and important resource. Human resources are
usually classified by the skills they bring to the project.
2) Materials: Project materials cover a large spectrum, but otherwise these are
the tangible items needed to complete the project. In projects, the availability
or shortages or long lead times of materials have been blamed for the delay of
many projects.
3) Equipment: Equipment is usually presented by type, size, and quantity. In
projects, the availability or unavailability of equipment when needed can also
be blamed for project delays.
3. Classification of a scheduling problem
Most of the scheduling methods available today require the project manager to
classify the project as either time constrained or resource constrained.
Time Constrained Project: is one that must be completed by an imposed date. If
required, resources can be added to ensure the project is completed by a specific
date. (project duration is fixed and resources are flexible)
Resource Constrained Project: is one that assumes the level of resources
available cannot be exceeded. If the resources are inadequate, it may be
acceptable to delay the project. (resources are fixed and time is flexible)
4. Resource allocation methods
A. Assumptions
*First, splitting activities cannot be allowed. Once an activity is placed on the
schedule, assume that it will be worked on continuously until finished.
* Second, the level of resources used for an activity cannot be changed. If
two people are required to complete an activity, keep both on the activity.
**Note: limiting assumptions are not cast-in-stone; meaning that these are
what the PM starts with, and if required, the PM should adjust the project
resources accordingly.
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B. Time constrained projects: smoothing resource demand
Scheduling time-constrained projects focuses on resource utilization. When
the demand for a specific resource is erratic, it is difficult to manage, and
utilization may be very poor. The problem can be addressed by using leveling
resource techniques that balance or smooth the demand for a resource.
Basically, by delaying non-critical activities, the PM can use positive slack to
reduce peak demand.
C. Resource-constrained projects
When the number of people and/or equipment is not adequate to meet peak
demand requirements and it is impossible to obtain more, the PM faces a
resource constrained problem. The problem can be addressed by prioritizing
and allocating resources to minimize project delay.
5. Computer demonstration of resource-constrained scheduling
It is important to note that the software used, regardless of the type, is not the one
managing the project. The software is simply a tool the PM uses to view the
project from different perspectives and conditions, so that tracking resources,
timelines, and budgets are made easier.
6. Splitting Activities
Planners should avoid the use of splitting activities as much as possible, except in
situations where splitting costs are known to be small or when there is no
alternative for resolving the resource problem. If this must take place, then the
planner will split an activity by interrupting the work and sending the resource to
another activity for a period of time and then having the resource resume work on
the original activity.
7. Benefits of scheduling resources
Once established, resource schedule provide a quick means for the PM to gauge
the impact of unforeseen events such as turnover, equipment breakdowns, or
transfer of personnel. It also allows PM’s to assess how much flexibility they
have over certain resources. This is useful when the PM receives requests to
borrow or share resources. Honoring such requests create goodwill and an “IOU”
that can be cashed in during a time of need.
8. Assigning project work
When making individual assignments, PM’s should match, as best they can, the
demands and requirements of specific work with the qualifications and experience
of available participants. However, because PM’s tend to always have the best
people work on the toughest activities, there can be resentment that they always
do the hardest stuff. As well as when the less experience people are given
mediocre activities, there can be resentment that they are not given the
opportunity to expand their skill/knowledge base. Therefore, PM’s need to
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balance task performance with the need to develop the talents of people assigned
to the project.
Also, PM’s not only need to decide who does what, but who works with whom.
Here are a couple of factors to consider:
1) First, PM’s should pick people with compatible work habits and
personalities, but who also complement each other.
2) Second, veterans should be teamed up with new hires so that the new
hires can be groomed to the customs and norms of the organization.
Also, if the veteran becomes unavailable, the new hire would have
been groomed to continue on with the project.
9. Using the resource schedule to develop a project cost baseline
A. Why a time-phased budget baseline is needed
Ex. 10 week project at $400,000 per week for a total cost of 4 million.
*Planned costs for the first 5 weeks are $2,000,000.
*Actual costs for the first 5 weeks are $2,400,000.
It appears as if the project is overrun by $400,000. But there is no real way of
knowing. The $400,000 may represent money used to move the project ahead
of schedule. Without a time-phasing cost to match your project schedule, it is
impossible to have reliable information to verify where the money went.
B. Creating a time-phased budget
By using information from your WBS and resource schedule, you can create a
time-phased cost baseline. In chapters 4 & 5 we integrated the WBS and OBS
organization breakdown structure so the work packages could be tracked by
deliverable and organization responsible.
The sum of all cost accounts in a column should represent the total costs or
budget for the organization unit responsible to accomplish the work. As well
as the costs for materials, and equipment.
11. Summary
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