Resource management

Avraham Shtub - Project management

Chapter 9
EFFECT OF RESOURCES ON PROJECT
PLANNING
Project resource planning is mainly concerned with the tradeoff analysis between
(1) the cost of alternative schedules designed to accommodate resources
shortages

and

(2) the cost of using alternative resources; for example, overtime to meet a
schedule or subcontracting to accommodate a schedule change.

Constraints: resource availability, budget allocations, and task deadlines.

CLASSIFICATION OF RESOURCES USED IN
PROJECTS
● Based on accounting principles
- labor costs (human resources), material costs, and other
“production” costs, such as subcontracting and borrowing ..
- useful for budgeting and accounting
- not specifically include the cost of the less tangible resources such as
information (blueprints, databases)
- not capture the main aspect of project resource management (i.e., the
availability of resources)
CLASSIFICATION OF RESOURCES USED IN
PROJECTS
● Based on resource availability
- Some resources are available at the same level in every time period
(e.g., a fixed workforce). These are renewable resources.
- resources that come in a lump sum at the beginning of the project and
are used up over time. These are depletable resources, such as
material or computer time.
- resources is available in limited quantities each period. However, their
total availability throughout the project is also circumscribed. These
are called doubly constrained resources. Eg. budget
CLASSIFICATION OF RESOURCES USED IN
PROJECTS
● Based on resource availability
- “nonconstrained” resources—those that are available in unlimited quantities for a cost. Eg. cloud based,
freelancer
- resources that are very expensive or impossible to obtain within the time span of the project. eg. Special
facilities, such as the use of a supercomputer, and technical experts who work on many projects
- similar to an ABC inventory management system. Resources of C category are available in unlimited
quantities and so do not require continuous monitoring. Nevertheless, they still might be expensive, so their
efficient use will help keep project costs down. Resources in A category have high priority and should be
monitored closely because shortages might significantly affect the project schedule and success.
- In general, depletable resources and those limited by periodic availability should be considered
individually during the planning process. This means that project schedules should be designed to ensure
optimal use of nonconstrained resources and that tight controls should be placed on the consumption of
constrained resources.
Multiple project environment
● maximum flexibility so that resources that are not essential for one project
can be used simultaneously on other projects. This flexibility can be achieved
by buying general-purpose equipment and by broadly training employees.
● Up to a certain point,the more of a particular resource used,the less
expensive it is per unit of time (as a result of savings in setup cost, greater
learning, and economies of scale).

● The marginal contribution of a resource decreases with usage. Frequently,

when increasing the quantity of a resource type assigned to an activity, a
point at which additional resources do not shorten the activity’s duration is
reached. That is, inefficiencies and diminishing returns set in.
Multiple project environment

● Some resources are discrete. When this is the case, decreasing resource
levels, necessarily in integer quantities, could result in a sharp decline in
productivity and efficiency.

● Resources are organizational assets. Resource planning should take into

consid- eration not only what is best for an individual project but also what is
best for the organization as a whole.

● The organization has better control over its own resources. When the choice
of acquiring or subcontracting for a resource exists, the degree of availability
and control should be weighed against cost considerations.
 RESOURCE LEVELING SUBJECT TO
PROJECT DUE-DATE CONSTRAINTS

Sum = 196

Sum (resource day) / project duration = 196 labor days/22 weeks = 8.91
WEEK 1,2,3: 17 labor-days per week

(17/5 = 3.4 unskilled workers per day)

WEEK 13: 3 labor-days per week

WEEK 3,4,5: 12 labor-days per week

WEEK 6: 3 labor-days per week

Resource leveling

● reallocation of total or free slack in activities to minimize fluctuations in the

resource requirement profile (assumed that a more steady usage rate leads to
lower resource costs)
● Calculate the average number of resource-days per period(e.g.,week).
(Total resource-days / project duration)
● With reference to the early-start schedule and noncritical activities,
gradually delay activities one at a time, starting with those activities that have
the largest free slack. Check the emerging resource requirement profile after
each delay. Select the schedule that minimizes resource fluctuations by
generating daily resource requirements close to the calculated average.
 Step 1: delay the start of E by 3 weeks
Week 3,4,5: 12 labor-days per week until the end of activity B
Week 6: 3 labor-days per week
Step 1: delay the start of E by 3 weeks until the end of activity B

Step 2: delay the start of E until week 5

The next candidate for adjustment is activity

B with a free slack of 2 weeks. However,
delaying B by 1 or 2 weeks will only increase
the load in weeks 4 and 5 from 8 to 12,
yielding a net gain of zero.

Step 3: delay D by 1 week

RESOURCE ALLOCATION SUBJECT TO
RESOURCE AVAILABILITY CONSTRAINTS
Under resource availability constraints, the project completion date calculated in
the critical path analysis may not be achieved. This is the case when the
resources required exceed the available resources in one or more time periods
and the slack of noncritical activities is not sufficient to solve the problem.

In the example, If 17 or more labor-days are available every week, then either an
early-start or a late-start schedule can be used to complete the project within 22
weeks. The leveled resource profile derived above requires at most 12 labor-days
per week. Therefore, as long as this number is available, no delays will be
experienced
Strategy

1. Performing activities at a lower rate using available resource levels

2. Activity splitting.
3. Modifying the network.
4. Use of alternative resources

If these strategies cannot solve the problem, then one or more activities will
have to be delayed beyond their total slack, causing a delay in the completion
of the project.
 1. Performing activities at a lower rate using available resource levels

Consider activity B in the example. Assuming that only 11 labor-days are available
each week and activity A (which is critical) is scheduled to be performed using 8 of
those days, only 3 days a week are left for activity B. Because B requires a total of
3 weeks * 4 labor-days per week = 12 labor- days of the resource, it may be
possible to schedule B for 3 days per week for 4 weeks. If this is not satisfactory,
then extending B to 5 weeks at 3 days per week may provide the solution.
 2. modifying the network

For example, if an end-to-start connection on the critical path is replaced by a

start-to-start connection, then the delay caused by lack of resources may be
eliminated. By considering the real precedence constraints among activities and
modeling these constraints using all types of precedence relations, some
conflicts can be resolved.
 4. Use of alternative resources.

This option is available for some resources.Subcontractors or personnel agencies,

for example, are possible sources of additional labor. However, the corresponding
costs may be relatively high, so a cost overrun versus a schedule overrun tradeoff
analysis may be appropriate.
Because activity A requires 8 of these 11 days, activity B can start only when A finishes. The
precedence relations force a delay of activity D—the successor of B, as well as F and G
RESOURCE UTILIZATION
Resource utilization is
defined as the proportion of
time that a renewable
resource is used.

Eg. 196 days / (12x22

resource days) = 0.74
PRIORITY RULES FOR RESOURCE ALLOCATION

The analysis of multiple projects in which several types of resources are used in
each is a complicated scheduling problem. In most real-life applications, the
problem is solved with heuristics using priority rules to make the allocations
among activities.

Examples of common priority rules:

- Activity with the smallest slack
- Activity with minimum late finish time(as determined by critical path analysis)
- Activity that requires the greatest number of resource units(or the smallest
number of resource units)
- Shorter activities(or longer activities)