Resource allocation and crashing

Created by Jesper Antonius Wolters

Abstract

Common to all projects is the need to allocate available resources in the best possible manner. Resources are not infinite and in order to obtain the most optimal result, they have to be allocated thoughtfully. If done correctly by the project manager, she can optimize the way the project uses it resources and minimize the negative effect of unforeseen events. However, if done casually, this might result in delays, penalty fees, using unnecessarily many resources on wrong events and not on critical events. From this article, the PM will learn techniques to help allocate resources efficiently in order to avoid the situations described above. In addition, by analyzing the possibility of crashing the project, the project manager might be able to find a more optimal solution than would be possible by the simple PERT/CPM analysis, this analysis thus builds upon a PERT/CPM analysis. This article aims at giving the reader a greater understanding of how to allocate resources to a project as well as presenting an example of how a project could be crashed. Three different techniques to resource allocation will be presented and explained in depth. Furthermore, in order to give the reader a greater understanding of how resource allocation can effect a project, positively as well as negatively, two examples using CPM crash heuristics will be presented.

Resource allocation

In project management, the term resource allocation covers the action of allocating resources to specific activities or people, in order to reach a goal set by the project manager. The project might have a limited amount of resources at any given point in time which challenges the project manager to make sure that resource capacity is neither wasted nor that extra resources need to be bought externally. By smoothing out the resource requirement over the life cycle of the project, it makes it easier to add a buffer, which in turn can help the project manager to avoid delays, expensive penalties for not meeting deadlines, the need for hiring extra personal and avoiding bad work ethic as a result of overtime. "One cannot save time - one can only spend more of less of it."

Resource loading

"Resource loading describes the amounts of individual resources an existing schedule requires during specific time periods." As described in the abstract, the resource loading builds upon a CPM/PERT analysis. The resource loading technique includes the problem of resources whereas a CPM/PERT analysis assumes that there are infinite resources. . This is the main problem with just doing a CPM analysis, projects do not have infinite resources! Assuming that a CPM analysis has been made and a Critical Path established, the first step of resource loading is to identify the types and quantities of resources, and spread them by a schedule across specific time periods. The aim is to identify and reduce excess demands on a company's resources. It is important to mention that by allocating twice as many resources to one activity does not mean that it will be completed in half the time originally planned. In order to better illustrate the challenges arising when including resource loading to a CPM/PERT analysis, a short example, project X, is presented. From figure 1, a simple project is presented and from the AON network created on figure 2, the critical path is found to be ABFI Without taking resource loading into account, this might be enough to say that ABFI is the critical path, but by taking into account the amount of workers needed for each activity, the PM gets more insight into the resource required at a given point in time.

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  Figure 1: Project X
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  Figure 2: Activity on Node network
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  Figure 3: Resource loading graph

From this simple example it is clear that the simple CPM/PERT analysis using early start times will result in a congestion of required workers in the beginning of the project, whereas the end of the project requires very few workers in comparison. It can also be seen from figure 3 that there are opportunities for the PM to utilize the slack, or late starting times, of each activity in order to try and even out the workers required over the duration of the project. The author will not go into detail about slack and late start times, but refers to the article on REF CPM/PERT.

Resource leveling

Resource leveling has been investigated since the early 1960s and can be defined as "Aiming to minimize period-by-period variations in resource loading, by shifting tasks within their slack allowances." The technique is applied to projects in order to more evenly distribute the required resources needed from period-to-period. This means aiming for a resource graph that is as smooth as possible while of course simultaneously reaching the required deadline. It takes advantage of the slack of activities and the possibility of starting and ending activities depending on the resources needed for activities running simultaneously. This can often cause the critical path to change.

Returning to project X from previous chapter, it is obvious that it is possible to apply the theory of resource leveling to this project in order to smooth out the worker requirement over the life cycle of the project. The

The advantages of doing resource leveling are that there are less day to day resource manipulation needed, there is better morale and fewer HR problems/costs. Lastly leveling resources also levels costs, which simplifies budgeting and funding.

Figure 4: Steps of resource leveling in project X

Annotated bibliography

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