Project Management

By: Eng. Mohammed Alsaeed

WM-PRJM-7 1
Resource Allocation

Topic 7

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 Content
• Expediting a Project
• Resource loading
• Resource Leveling

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 Expediting a Project
• The Critical Path Method
• Fast‐Tracking a Project

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 Critical Path Method—Crashing a Project

• Time and costs are interrelated

• 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
• Of course, the 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
• Compute cost/time slope for each expeditable
activity

• Slope = crash cost – normal cost

crash time – normal time
• Slope is the cost of crashing the project for the
potential (or estimated) crashing time.

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 An Example (Table 9-1)
Activity Predecessor Days Cost
(normal, crash) (normal, crash)
a - 3, 2 $40, 80

b a 2, 1 20, 80

c a 2, 2 20, 20

d* a 4, 1 30, 120

e** b 3, 1 10, 80

* Partial crashing allowed

** Partial crashing not allowed
WM-PRJM-7 81-1
 Example (cont’d):
Cost per Day to Crash (Table 9-2)
Activity $ Saved/
Day (Slope)
a 40

b 60

c -

d 30

e 70 (2 days)

WM-PRJM-7 91-1
 Example (cont’d): Crashing
What to crash depends on how much we need to Activity $ Saved/
Day (Slope)
reduce the duration of the project.
a 40
Normal Time
b 60
Normal Cost 2 $60 c -

b 3 $70
d 30

e 70 (2 days)
$20 e
3 $40
$10
S a c 2 $0 F
$40 $20

Activity Pred. Days Cost

(normal, (normal,
d 4 $30
crash) crash)
a - 3, 2 $40, 80
$30
- CP: a  b  e (ET=8) b a 2, 1 20, 80

- Ratios c a 2, 2 20, 20
d* a 4, 1 30, 120
- Total Cost: $120 e** b 3, 1 10, 80

- Total Lead Time: 8 days

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 Crashing the Project

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Figure 9-1a
 Example (cont’d): Crashing
Activity $ Saved/
Day (Slope)

a 40

b 60
Normal Cost 2 $60 c -

Ratios b d 30
3 $70
e 70 (2 days)
2 $20* e
3 $40
$10*
S a c 2 $0 F
$40 $20*
$80*

d 4 $30
Activity Pred. Days Cost
$30*
- Crash a: (lowest) for 1 day (max1) (normal, (normal,
crash) crash)
- New Cost: $120 + $40 = $160 a - 3, 21 $40, 80

- New Lead Time: 7 days (still on CP) b a 2, 1 20, 80

v. a  c (4) vs a  d (6) c a 2, 2 20, 20
d* a 4, 1 30, 120
e** b 3, 1 10, 80

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 Seven Day Schedule

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Figure 9-1b
 Example (cont’d): Crashing
Activity $ Saved/
Day (Slope)

a 40

1 b 60
Normal Cost 2 $60 c -

Ratios b d 30
3 $70
e 70 (2 days)
2 $20$80* e
3 $40
$10*
S a c 2 $0 F
$40 $20*
$80*

d 4 $30
Activity Pred. Days Cost
$30*
- Crash b: (lowest) for 1 day (max) (normal, (normal,
crash) crash)
- New Cost*: $160 + $60 = $220 a - 3, 2 $40, 80

- New Lead Time: 6 days b a 2, 1 20, 80

-(2 paths with same LT: a  b  e (6) vs a  d (6) c a 2, 2 20, 20

d* a 4, 1 30, 120
e** b 3, 1 10, 80

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 Six Day Schedule

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Figure 9-1c
 Example (cont’d): Crashing
Activity $ Saved/
Day (Slope)

a 40

1 b 60
Normal Cost 2 $60 c -

Ratios b d 30
3 $70
e 70 (2 days)
2 $20 $80* e
3 $40
$10*
S a c 2 $0 F
$40 $20*
$80*

d 4 $30
Activity Pred. Days Cost
$30 3 $60* (normal, (normal,
- Crash d for 1 day (partial crashing allowed) crash) crash)

- New Cost*: $220 + $30 = $250 a - 3, 2 $40, 80

- LT for path a  d = 5 (Not critical) b a 2, 1 20, 80

- CP is again a  b  e (6 days) c a 2, 2 20, 20
d* a 4, 1 30, 120
e** b 3, 1 10, 80

WM-PRJM-7 161-1
 Example (cont’d): Crashing
Activity $ Saved/
Day (Slope)

2 a 40

1 b 60
Normal Cost 2 $60 c -
1
Ratios b d 30
3 $70
e 70 (2 days)
2 $20 $80 $20* e
3 $40
$10 $80*
S a c 2 $0 F
$40 $20*
$80*

d 4 $30
-Say that lead time of 5 days is acceptable. $30 3 $60*
Activity Pred. Days
(normal,
Cost
(normal,
-Can backtrack and undo the earlier crashing at b. crash) crash)
-Add 1 day and subtract $60. a - 3, 2 $40, 80
-Now (a  b  e ) and (a  d ) have LT =5. b a 2, 1 20, 80
-New Cost*: $320 - $60 = $260
c a 2, 2 20, 20
d* a 4, 1 30, 120
e** b 3, 1 10, 80

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 Five Day Schedule

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Figure 9-1d
 Example (cont’d): Crashing
Activity $ Saved/
Day (Slope)

a 40

1 b 60
Normal Cost 2 $60 c -
1
Ratios b d 30
3 $70
e 70 (2 days)
2 $20 $80* e
3 $40
$10 $80*
S a c 2 $0 F
$40 $20*
$80*

d 4 $30
Activity Pred. Days Cost
$30 3 $60* (normal, (normal,
- Crash e for 2 days (no partial crashing allowed) crash) crash)

- New Cost*: $250 + $70 = $320 a - 3, 2 $40, 80

- LT for path a  b  e = 4 b a 2, 1 20, 80

c a 2, 2 20, 20
d* a 4, 1 30, 120
e** b 3, 1 10, 80

WM-PRJM-7 191-1
 Example (cont’d): Crashing
Activity $ Saved/
Day (Slope)
1
2 a 40

1 b 60
Normal Cost 2 $60 c -
1
Ratios b d 30
3 $70
e 70 (2 days)
2 $20 $80 $20 e
3 $40 $80*
2 $10 $80*
S a c $0 F
$40 $20*
$80*
$30
-LT (a  b  e ) = 5 d
-Assume that acceptable lead time is now 4 days. 4 Activity Pred. Days Cost
-Crash d for 1 more day. $30 3 $60 (normal, (normal,
crash) crash)
-Cost*: $260 + $30 = $290 2 $90*
a - 3, 2 $40, 80
-Crash b again for 1 more day.
-New Cost*: $290 + $60 = $350 b a 2, 1 20, 80

-Now (a  b  e, a  c and a  d ) have LT =4. c a 2, 2 20, 20

-Addtn. Cost of reducing project from 8 to 4 days: $230 d* a 4, 1 30, 120

-You could still crash d 1 more day, but it would be a waste of $. e** b 3, 1 10, 80

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 Four Day Schedule

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Figure 9-1e
 Cost-Crash Curve

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Figure 9-2
 Fast-Tracking/Concurrency
• Fast-tracking is another way to expedite a
project
– Mostly used for construction projects
– Can be used in other projects
• Refers to overlapping design and build phases
• Increases number of change orders
• Increase is not that large

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 Fast-Tracking/Concurrency Continue
• Pros:
– Can shorten project duration
– Can reduce product development cycles
– Can help meet clients’ demands
• Cons:
– Can increase cost through redesigns, excessive
changes, rework, out-of-sequence installation,
and more

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 Project Expediting in Practice
• Expediting can occur in three different ways.
– First, the PM may know ahead of time that this is
a time‐critical project and will need to take steps
to finish the project as early as possible.
– Second, the PM may get the word during the
execution of the project that the due date has had
to be moved up.
– Or finally, something happens during the project
to delay some activities so that the due date is
going to be missed.
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 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
• Gives a general understanding of the
demands a project or set of projects will
make on a firm’s resources

Chapter 9-9 261-1

Resource Usage Calendar, Figure 9-3

271-1
AOA Network, Figure 9-4

281-1
Modified PERT/CPM AOA, Figure 9-5

291-1
 Resource A

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Figure 9-6a
 Resource B

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Figure 9-6b
 Resource Leveling
• May be able to use just-in-time inventory
• Fewer personnel problems
• When an activity has slack, we can move that activity
to shift its resource usage
• 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

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 • Assignment 7.1
– Workout this
problem

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