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ENGG461 Week 5: Resource Optimisation and

Schedule Compression

• Resource Optimisation (resources

smoothing and levelling)
– time-constrained scheduling
– resource-constrained scheduling

• Schedule Compression (reducing the

duration of the project)
– project crashing
– fast-tracking
8–1

Resource Optimisation and Schedule Compression

• Learning Objectives
–Identify/appreciate the key issues/challenges
associated with allocating resources to a project
–Apply resource allocating techniques (methods) to
ensure efficient and effective utilisation of resources –
hence to meet project deliverables
–Apply selected techniques for reducing project duration
under different resource conditions

8–2

Project Planning Process

In week 3, when developing network diagrams, we

assumed that resources required to complete activities
are available at the times they are needed – but this
may not always be the case!

FIGURE 8.1

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PMBOK Schedule Mgmt. Processes

Knowledge Initiation Planning Executing Monitoring Closing

Area and
Controlling

Schedule
Compression

Resources Smoothing
Resources Levelling
Schedule Compression

(Source: PMBOK Guide, 6th Edition; p. 556)

Resources Smoothing

Painters
4
3
2
1
1 2 3 4 5 6 7 8 9 10 11 12

Painters
3
2
1
1 2 3 4 5 6 7 8 9 10 11 12

Even out (smoothen) utilisation of resources without

extending the overall project duration
– peak demand is reduced
– minimise fluctuations in demand for resources

Resources Levelling

Only 2 painters
are available
3 4 5 6 7 8 9 10 11 12

Painters
3
2
1
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Project duration is extended

Scheduling under conditions of constrained resources to

minimise the extra time needed to complete the project
– establishes which activities are allocated resources first and
which activities are delayed

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The Resource Optimisation Problem

• Time-constrained scheduling (smoothing)

–involves attempting to even out varying demands
on resources by using slack (delaying noncritical
activities) to manage resource utilization when
resources are adequate over the life of the project
–otherwise, additional resources need to be assigned

• Resource-constrained scheduling (levelling)

–the duration of a project may be increased by delaying
the late start of some of its activities if resources are
not adequate to meet peak demands

Types of Project Constraint

• Technical or Logic Constraints

– constraints related to the networked sequence in which project
activities must occur (e.g. erect frame after foundation laid)

• Physical Constraints
– activities that cannot occur in parallel or are affected by
contractual or environmental conditions (e.g. confined space)

• Resource Constraints
– the absence, shortage, or unique interrelationship and interaction
characteristics of resources that require a particular sequencing of
project activities (only one overhead crane is available to share)
– types of resource: people, materials, equipment

Constraint Examples
Building construction?

Software development?

the number of
people available?

FIGURE 8.2
8–9

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Classification of A Scheduling Problem

• Classification of Problem
–using a priority matrix will help determine if the project
is time-constrained or resource-constrained

• Time-constrained Project
–must be completed by an imposed date
• time is fixed, resources are flexible: additional resources may
be required to ensure project meets the set completion date

• Resource-constrained Project
–the level of resources available cannot be exceeded
• resources are fixed (by availability or cost), time is flexible:
lack of resources means the project will be delayed

Project Priority Matrix

performance = scope + quality (specifications) ?

4–11

Performance-constrained

FIGURE 4.2a 4–12

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Time-constrained

new product development projects? FIGURE 4.2a 4–13

Time-constrained

FIGURE 4.2b
4–14

Time-constrained

special events – emergency response?

FIGURE 4.2b
4–15

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Cost-constrained

FIGURE 4.2c
4–16

Cost-constrained

research and development projects ? FIGURE 4.2c

4–17

Resource Allocation Methods

• Limiting Assumptions
–splitting activities is not allowed—once an activity is
started, it is carried to completion
–level of resources used on an activity cannot be changed

• Risk Assumptions
–activities with the highest slack pose the lowest risk
–reduction of flexibility does not increase risk???
–the nature of a task (easy, complex) doesn’t increase risk

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Resource Allocation Methods (cont’d)

• Time-Constrained Projects
–must be completed by an imposed date
–require use of levelling techniques that focus
on balancing or smoothing resource demands
–use positive slack (delaying non-critical activities)
to manage resource utilization over the duration
of the project

Example: Botanical Garden - scheduling of equipment

(Backhoes) for a simple project

FIGURE 8.3
8–20

Example: Levelled schedule: the number of backhoes

required has reduced from 4 to 3

2Bh

FIGURE 8.3
8–21

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Example: Levelled schedule: the number of backhoes

required has reduced from 4 to 3

2Bh

FIGURE 8.3
8–22

Resource Allocation Methods (cont’d)

• Resource Demand Leveling Techniques

for Time-Constrained Projects
– advantages
• peak resource demands are reduced
• resources over the life of the project are reduced
• fluctuation in resource demand is minimized
– disadvantages
• loss of flexibility that occurs from reducing slack
• increases in the criticality of all activities

Resource-constrained Scheduling

• Resources are limited in quantity or availability

• Activities are scheduled using heuristics
(rules-of-thumb) that focus on:
– minimum slack
– shortest (least) duration
– lowest activity identification number
• The parallel method is used to apply heuristics
– an iterative process starting at the first time period
of the project and scheduling period-by-period the
start of any activities using the three priority rules

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Parallel Method

• Start from the beginning of the project

• When there are multiple tasks competing for
the same resource, that resource is allocated
based on the following priority rules:
1. minimum slack
2. shortest (least) duration
3. lowest activity identification number
• The above rules are used to break the ties
– e.g. if there are two tasks with equal slack, then the
one with the shortest duration is given the priority
8–25

Assumptions

• Limiting Assumptions
– splitting activities is not allowed—once an activity
is started, it is carried to completion
– level of resources used for an activity cannot be
changed
• Risk Assumptions
– activities with the most slack pose the least risk
– reduction of flexibility does not increase risk
– the nature of an activity (easy, complex) doesn’t
increase risk

Resource-Constrained Scheduling - Example

Example: scheduling of programmers in a software development project

Only 3 programmers are available

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Resource-Constrained Schedule through Period 2–3

1. minimum slack
2. smallest (least) duration
Only 3 programmers are available
3. lowest activity identification number

Resource-Constrained Schedule through Period 2–3

Resource-Constrained Schedule through Period 5–6

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Resource-Constrained Schedule through Period 5–6

Resource-Constrained Schedule through Period 5–6

Resource-constrained Scheduling:
Implications?

• Reduces delay but reduces flexibility

• Increases criticality of events
• Increases scheduling complexity
• May make the traditional critical path no longer
meaningful
• Can break sequence of events
• May cause parallel activities to become
sequential and critical activities with slack (?) to
become noncritical

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Splitting

• Splitting
– A scheduling technique use to get a better project
schedule and/or increase resource utilization.
• involves interrupting work on an activity to employ
the resource on another activity, then returning the
resource to finish the interrupted work
• is feasible when startup and shutdown costs are low
• is considered the major reason why projects fail to
meet schedule

Splitting Activities

FIGURE 8.11

Multi-project Resource Schedules

• Multi-project Scheduling Problems

1. Overall project slippage

• delay on one project create delays for other projects

2. Inefficient resource application

• the peaks and valleys of resource demands create
scheduling problems and delays for projects.

3. Resource bottlenecks
• shortages of critical resources required for multiple
projects cause delays and schedule extensions.

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Multi-project Resource Schedules (cont’d)

• Managing Multi-project Scheduling:

• create project offices or departments to oversee
the scheduling of resources across projects.
• use a project priority queuing system: first come,
first served for resources.
• centralize project management: treat all projects
as a part of a “megaproject.”
• outsource projects to reduce the number
of projects handled internally.

Reducing Project Duration

• Motivations for reducing project duration

– reducing ‘time-to-market’.
• e.g. new product/technology development

– imposed deadlines; incentive contracts

• e.g. political commitments, benefits to stakeholders.

– high overhead costs

• e.g. indirect costs are so high that it is more economical
to complete the project as quickly as possible.

Options for Accelerating Project Completion

• Resources Not
Constrained
–project crashing (add
resources or work overtime)
–outsourcing project work • Resources Constrained
–establishing a core –fast-tracking (undertake
project team (reduces the critical activates concurrently)
need for multi-tasking) –critical-chain (Goldratt)
–do it twice – first, fast –reducing project scope
and then correctly (may
incur a much higher cost!)
–compromise quality

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Project crashing vs Fast-tracking

• Crashing: used to shorten the • Fast tracking: activities or

duration for the least
incremental cost by
progressively adding resources
• Examples: working overtime,
bringing in additional resources,
or paying to expedite delivery to
activities on the critical path
• Comments: works only for
activities on the critical path,
where additional resources will
shorten the activity’s duration;
does not always produce a
viable alternative and may result
in increased risk
phases normally done in
sequence are performed in
parallel for at least a portion of
their duration
• Example: constructing the
foundation for a building before
completing all of the architectural
drawings
• Comments: may result in rework;
works only when activities can be
overlapped; usually increases
coordination efforts between the
activities concerned and
increases quality risk and costs
8–40

Explanation of Project Costs

• Project Direct Costs

– normal costs that can be assigned directly to
a specific work package or project activity
• labor, materials, equipment, and subcontractors
– crashing activities increases direct costs
• Project Indirect Costs
– costs that cannot be associated with any particular
work package or project activity
• supervision, administration, consultants, and interest
– costs that vary (increase) with time
• Reducing project time directly reduces indirect costs

Reducing Project Duration

to Reduce Project Cost

Identifying direct costs to reduce project time

Gather information about direct and indirect

costs of specific project durations.

Search critical activities for lowest direct-cost

activities to shorten project duration.

Compute total costs for specific durations and

compare to benefits of reducing project time.

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Project Cost–Duration Graph

Reducing duration

Constructing a Project Cost–Duration Graph

• Find total direct costs for

selected project durations
• Find total indirect costs for
selected project durations
• Sum direct and indirect costs for
these selected project durations
• Compare additional cost
alternatives for benefits

Constructing a Project Cost–Duration Graph

• Determining Activities to Shorten

– shorten the activities with the smallest increase in cost
per unit of time.
– assumptions:
• the cost relationship is linear.
• normal time assumes low-cost, efficient
methods to complete the activity.
• crash time represents a limit—the greatest time reduction
possible under realistic conditions.
• Slope represents a constant cost per unit of time.
• All accelerations must occur within the normal
and crash times.

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Activity Graph

Cost–Duration Trade-off Example

Cost–Duration Trade-off Example (cont’d)

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Cost–Duration Trade-off Example (cont’d)

Cost–Duration Trade-off Example (cont’d)

Cost–Duration Trade-off Example (cont’d)

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Cost–Duration Trade-off Example (cont’d)

Cost–Duration Trade-off Example (cont’d)

Summary Costs by Duration

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Project Cost–Duration Graph

Reducing Project Duration

https://www.youtube.com/watch?v=soOl_FpfBOM

Crashing Project Activities

https://www.youtube.com/watch?v=hJQW9_I-0hI

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