Week 5 Discussion Discussion-625

Week 5 Discussion Discussion-625

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Where We Are Now

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Learning Objectives

1. Understand the differences between time-constrained and

resource-constrained schedules

2. Identify different types of resource constraints

3. Describe how the smoothing approach is used on time-

constrained projects

4. Describe how leveling approach is used for resource-

constrained projects

5. Understand how project management software creates

resource-constrained schedules

6. Understand when and why splitting tasks should be avoided

7. Identify general guidelines for assigning people to specific tasks

8. Identify common problems with multiproject resource scheduling

9. Explain why a time-phased budget baseline is needed

10. Create a time-phased project budget baseline

8–2

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Chapter Outline

8.1 Overview of the Resource Scheduling Problem

8.2 Types of Resource Constraints

8.3 Classification of a Scheduling Problem

8.4 Resource Allocation Methods

8.5 Computer Demonstration of Resource-Constrained

Scheduling

8.6 Splitting Activities

8.7 Benefits of Scheduling Resources

8.8 Assigning Project Work

8.9 Multiproject Resource Schedules

8.10 Using the Resource Schedule to Develop a Project

Cost Baseline 8–3

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Overview of the Resource

Scheduling Problem

• Resources and Priorities

– Project network times are not a schedule until

resources have been assigned.

• The implicit assumption is that resources will be available in the required amounts when needed.

• Adding new projects requires making realistic judgments of resource availability and project durations.

– Cost estimates are not a budget until they have been

time-phased.

8–4

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Project Planning Process

FIGURE 8.1

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The Resource Scheduling Problem (cont’d)

• Resource Smoothing (or Leveling)

– 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.

• Resource-Constrained Scheduling

– 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.

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Types of Project Constraints

• Technical or Logic Constraints

– Constraints related to the networked sequence in which project

activities must occur

• Physical Constraints

– Activities that cannot occur in parallel or are affected by

contractual or environmental conditions

• Resource Constraints

– The absence, shortage, or unique interrelationship and

interaction characteristics of resources that require a particular

sequencing of project activities

• People, materials, equipment

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Constraint Examples

FIGURE 8.2

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Classification of a Scheduling Problem

• Classification of Problem

– Using a priority matrix will help determine if the

project is time or resource constrained.

• Time-Constrained Project

– Must be completed by an imposed date.

• Time is fixed, resources are flexible: additional resources are required to ensure project meets schedule.

• Resource-Constrained Project

– Is one in which the level of resources available

cannot be exceeded.

• Resources are fixed, time is flexible: inadequate resources will delay the project.

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Resource Allocation Methods

• Limiting Assumptions

– Splitting activities is not allowed—once an activity is

start, 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.

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Resource Allocation Methods (cont’d)

• Time-Constrained Projects

– Must be completed by an imposed date.

– Require use of leveling techniques that focus

on balancing or smoothing resource demands.

– Use positive slack (delaying noncritical activities) to

manage resource utilization over the duration

of the project.

• Peak resource demands are reduced.

• Resources over the life of the project are reduced.

• Fluctuation in resource demand is minimized.

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Botanical

Garden

FIGURE 8.3

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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

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Resource Allocation Methods (cont’d)

• Resource-Constrained Projects

– Resources are limited in quantity or availability.

– Activities are scheduled using heuristics

(rules-of-thumb) that focus on:

1. Minimum slack

2. Smallest (least) duration

3. 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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Resource-Constrained Schedule through Period 2–3

FIGURE 8.4

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Resource-Constrained Schedule through Period 2–3

FIGURE 8.4 (cont’d)

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Resource-Constrained Schedule through Period 2–3

FIGURE 8.4 (cont’d)

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Resource-Constrained Schedule through Period 5–6

FIGURE 8.5

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Resource-Constrained Schedule through Period 5–6

FIGURE 8.5 (cont’d)

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Resource-Constrained Schedule through Period 5–6

FIGURE 8.5 (cont’d)

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Computer Demonstration of Resource-

Constrained Scheduling

• EMR Project

– The development of a handheld electronic medical

reference guide to be used by emergency medical

technicians and paramedics

• Problem

– There are only eight design engineers who can be

assigned to the project due to a shortage of design

engineers and commitments to other projects.

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EMR Project:

Network View

Schedule before

Resources Leveled

FIGURE 8.6

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EMR Project before Resources Added

FIGURE 8.7

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EMR Project—Time Constrained Resource Usage View,

January 15–23

FIGURE 8.8A

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Resource Loading Chart for EMR Project, January 15–23

FIGURE 8.8B

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EMR Project

Network View

Schedule

after Resources

Leveled

FIGURE 8.9

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EMR Project Resources Leveled

FIGURE 8.10

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The Impacts of Resource-Constrained

Scheduling

• Reduces slack; 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

• Activities with slack may become critical

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Splitting

• Splitting

– A scheduling technique for creating 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.

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Splitting Activities

FIGURE 8.11

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Benefits of Scheduling Resources

• Leaves time for consideration of reasonable

alternatives:

– Cost-time tradeoffs

– Changes in priorities

• Provides information for time-phased work

package budgets to assess:

– Impact of unforeseen events

– Amount of flexibility in available resources

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Assigning Project Work

• Reasons why we should not always assign the

best people the most difficult tasks

– Best people: resent to the fact that they are always

given the toughest assignments

– Less experienced participants: resent to the fact that

they are never given the opportunity to expand their

skill/knowledge base

• Factors to be considered in deciding who should

work together

– Minimize unnecessary tension; complement each

other

– Experience: veterans team up with new hires

8–32

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Multiproject Resource Schedules

• Multiproject 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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Multiproject Resource Schedules (cont’d)

• Managing Multiproject 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

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Using the Resource Schedule to Develop

a Project Cost Baseline

• Why a Time-Phased Budget Baseline Is Needed

– To determine if the project is on, ahead, or behind schedule and

over or under its budgeted costs?

– To know how much work has been accomplished for the

allocated money spent—the project cost baseline (planned

value, PV)

• Creating a Time-Phased Budget

– Assign each work package to one responsible person or

department and deliverable

– Compare planned schedule and costs using an integrative

system called earned value

8–35

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Direct Labor Budget

Rollup ($000)

FIGURE 8.12

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Time-Phased Work Package Budget (Labor Cost Only)

FIGURE 8.13

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Two Time-Phased Work Packages (Labor Cost Only)

FIGURE 8.14

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Patient Entry Project Network

FIGURE 8.15

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Patient Entry Time-Phased Work Packages Assigned

FIGURE 8.16

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CEBOO Project Monthly Cash Flow Statement

FIGURE 8.17

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CEBOO Project Weekly Resource Usage Schedule

FIGURE 8.18

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Where We Are Now

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Learning Objectives

1. Understand the different reasons for crashing a

project

2. Identify the different options for crashing an activity

when resources are not constrained

3. Identify the different options for crashing an activity

when resources are constrained

4. Determine the optimum cost-time point in a project

network

5. Understand the risks associated with compressing

or crashing a project

6. Identify different options for reducing the costs of a

project

9–44

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Chapter Outline

9.1 Rationale for Reducing Project Duration

9.2 Options for Accelerating Project Completion

9.3 Project Cost-Duration Graph

9.4 Constructing a Project Cost-Duration Graph

9.5 Practical Considerations

9.6 What If Cost, Not Time, Is the Issue?

9–45

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Rationale for Reducing Project Duration

• Time Is Money: Cost-Time Tradeoffs

– Reducing the time of a critical activity usually incurs

additional direct costs.

• Cost-time solutions focus on reducing (crashing) activities on the critical path to shorten overall duration of the project.

– Reasons for imposed project duration dates:

• Time-to-market pressures

• Unforeseen delays

• Incentive contracts (bonuses for early completion)

• Imposed deadlines and contract commitments

• Overhead and public goodwill costs

• Pressure to move resources to other projects

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Options for Accelerating Project Completion

• Resources Not

Constrained

– Adding resources

– Outsourcing project

work

– Scheduling overtime

– Establishing a core

project team

– Do it twice—fast and

then correctly

• Resources

Constrained

– Improving project team

efficiency

– Fast-tracking

– Critical-chain

– Reducing project

scope

– Compromise quality

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Reducing Project Duration

to Reduce Project Cost

Compute total costs for specific durations and compare to benefits of reducing project time

Search critical activities for lowest direct-cost activities to shorten project duration

Identifying direct costs to reduce project time

Gather information about direct and indirect costs of specific project durations

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Explanation of Project 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

• 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.

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Project Cost–Duration Graph

FIGURE 9.1

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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

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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-time 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

FIGURE 9.2

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Cost–Duration Trade-off Example

FIGURE 9.3

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

FIGURE 9.3 (cont’d)

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

FIGURE 9.4

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

FIGURE 9.4 (cont’d)

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Summary Costs by Duration

FIGURE 9.5

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Project Cost–Duration Graph

FIGURE 9.6

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Practical Considerations

• Using the Project Cost–Duration Graph

• Crash Times

• Linearity Assumption

• Choice of Activities to Crash Revisited

• Time Reduction Decisions and Sensitivity

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What if Cost, Not Time Is the Issue?

• Commonly Used Options for Cutting Costs

– Reducing project scope

– Having owner take on more responsibility

– Outsourcing project activities or even the entire

project

– Brainstorming cost savings options

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Key Terms

Heuristics

Leveling

Planned value (PV)

Resource-constrained projects

Resource smoothing

Splitting

Time-constrained projects

Time-phased budget baseline

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Key Terms

Crashing

Crash point

Crash time

Direct costs

Fast-tracking

Indirect costs

Outsourcing

Project cost–duration graph


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