ch09 Numericals

Project Management: A Managerial Approach, 9th edition Instructor’s Resource Guide
Chapter 9
Resource Allocation
CHAPTER OVERVIEW
Overview – This chapter addresses the issues involved in developing a project plan and
schedule in the face of constrained resources, whether they are people or facilities.
9.1 Critical Path Method – Crashing a Project – Crashing is the process of attempting to
shorten project activities and in turn the overall project by assigning additional
resources. To determine if crashing makes sense, a cost/time slope is calculated for
each activity that can be expedited (crashed). The formula looks like this:
crash cost  normal cost

Slope =
crash time  normal time
This formula allows the analyst to determine the relative cost of crashing each
activity. Then the most cost effective plan for crashing can be determined. The
formula implies that the activities can always be crashed in one-day increments,
which may not be true. The formula also does not address the risks that may be
associated with crashing. Reducing the labor of a manual task like painting is
relatively straight forward. Reducing the design process for a new CPU, on the other
hand, may involve the application of promising, but untested, technology. The text
goes on to give numeric examples for the crashing process.
 Fast-Tracking – Another way to expedite a project is to overlap activities. In a
design to production project, one way to accomplish this is to overlap the design
and production phases. In other words the design is not complete when
construction starts. Research has shown that this can be an effective method of
expediting.
9.2 The Resource Allocation Problem – The CPM method by itself does not address the
issue of resource availability. Typically, the durations are set with “normal”
resources, and the schedule is calculated with no assumed resource limit. In many
cases this is clearly not so. The extremes that the PM may be confronted with are:
 Time limited projects – The project must be finished on time with resources
applied as necessary.
 Resource limited projects – The project must stay within set resource limits and
the schedule is allowed to drift as necessary.
If schedule, cost, and specification (scope) are all fixed, it is unlikely that the PM can
succeed. Generally, at least one of the three must be flexible. The PM may also
encounter system-constrained tasks that need fixed amounts of time and resource.
No tradeoff of time or resource is possible with these.
Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 1

9.3 Resource Loading – The amount of resource required by a task during a specific
time frame is its resource loading. This information can be easily displayed using
tools like Microsoft® Project.
9.4 Resource Leveling – Typically the first resource-loading pattern coming from a CPM
schedule has problems. Either the peak load exceeds the availability or the variation
in load is too extreme from time period to time period. In many cases, both problems
will occur simultaneously. Resource leveling attempts to solve these problems by
shifting activities within their slack. There are many advantages to a level resource
plan including improved morale and reduced administrative costs. Project that have
more than a few tasks are very difficult to level manually and benefit from the use of
tools like Microsoft® Project.
 Resource Loading/Leveling and Uncertainty – Typical load diagrams for resource
show uneven distribution of labor. Often management assumes that if the
aggregate demand exceeds the aggregate supply then everything is okay. Two
problems, however, can occur from this situation. The first is that during the
under capacity times, the staff still needs something to do. If they are not adding
value during those times, then that “production” is lost forever. The second
problem occurs if the aggregate demand exceeds 85-90 percent of the supply.
Research has shown that if a manufacturing process is run at more than 85%
capacity, it has no resources available to deal with the inevitable disruptions in
flow. Once behind, the process can never catch up.
9.5 Constrained Resource Scheduling – There are two methods to scheduling in a

constrained resource environment: heuristics and optimization models. Heuristics
apply rules of thumb to determine which activity should receive constrained
resources first. Optimization attempts to calculate the best solution using
mathematical models.
 Heuristic Methods – The heuristic method typically starts with a schedule
calculated using the CPM method. Then it steps through the schedule period by
period. For each period it determines if sufficient resources are available. If they
are it proceeds to the next period and repeats the process. If insufficient
resources are available, it uses a priority rule to determine activities receiving
resources in that time period. Activities that do not receive resources are delayed
to the next time period and the process is repeated. The most common priority
rules are:
 As Soon As Possible – This is the general rule for scheduling tasks using
CPM.
 As Late As Possible – This rule attempts to delay activities as much as
possible to defer their use of resources.
 Shortest Task First – This rule sorts the competing tasks by duration and
assigns resources starting at the short end of the list. This rule maximizes the
number of activities to be completed in any given time period.

 Most Resources First – This rule sorts the competing tasks by the amount of
resource required and assigns resources starting at the highest end of the
list. This favors tasks with high resource consumption under the assumption
that they are more important.
 Minimum Slack First – This rule sorts the competing tasks by the amount of
slack they currently have and assigns resources starting at the low end of the
list. This rule favors activities on or close to being on the critical path. Tasks
that are delayed lose slack and so have a relatively higher priority in the next
time period.
 Most Critical Followers – This rule sorts the competing tasks by the number
(count) of critical path activities that follow each one. Resources are assigned
starting at the high end of the list.
 Most Successors – This rule sorts the competing tasks by the number (count)
of successors that follows each one. Resources are assigned starting at the
high end of the list.
 Arbitrary – Resources are assigned in some other way. This may involve a
value judgment like which customer is perceived as most important.
Research has shown that, in general, the minimum slack rule works the best.
Heuristics can also employ simulation techniques, where a number of
possibilities are tested and the best is kept.
 Optimizing Methods – Two optimizing methods may be used; mathematical
programming or enumeration. These methods are only applicable to relatively
small projects and to date have unproven results.
9.6 Multiproject Scheduling and Resource Allocation – The problems described so far
become even more complex when applied in the multi project environment.
Typically the problem is treated as if the multiple projects were combined into one
large one. Three metrics are used to measure the effectiveness of any resource
allocation solution:
 Schedule slippage – The time past a project’s due or delivery date.
 Resource utilization – The effectiveness of the resource leveling activities.
 Amount of in-process inventory – The amount of work waiting to be processed
because there is a shortage of some resource(s).
A good predictor of the effect of adding a new project into a resource constrained
environment is the average resource load factor. This measures the average
resource requirement during a set period divided by resource availability.
 Heuristic Techniques – Similarly to the single project problem, multiproject
scheduling can benefit from the application of heuristics. In addition to the rules
described in the previous section, some additional rules have been applied to the
multiproject problem. They are:
 Resource Scheduling Method – This method compares pairs of activities and
finds the one that causes the minimum increase in project duration.
 Minimum Late Finish Time – The earliest late finisher gets the resources first.

 Greatest Resource Demand – This method favors activities or projects with

the greatest resource demand.
 Greatest Resource Utilization – This rule favors the combination of activities
that gives the best utilization of resources during the period.
 Most Possible Jobs – This rule favors the largest combination of activities
that can be scheduled in any given period.
 A Multiproject Scheduling Heuristic – This method depends on the development
of a network based schedule for each project. Then the networks are linked
together, either through real dependencies or through artificial “dummy” links. To
allocate resources across the project, each activity is recognized to be in one of
four states during any given time period:
 Ongoing
 Stopping
 Waiting and able to start
 Waiting and unable to start
Activities that are on-going are resource users. Those that are stopping are
resource contributors, while those that are waiting are resource demanders.
Activities are assigned resources based on the minimum slack rule. If insufficient
resources are available, non-critical activities can be either slowed or stopped to
free up more resources. This heuristic, like others, makes the simplifying
assumption that all like resources are fungible, that is completely
interchangeable. This is of course is a highly suspect assumption.
9.7 Goldratt’s Critical Chain – Eli Goldratt in the Critical Chain addresses the constrained
resource problem based on his Theory of Constraints made famous in The Goal.
Some of the problems addressed in this theory are:
 Thoughtless optimism
 Management’s desire to set capacity equal to demand in spite of evidence to
the contrary coming from the shop floor.
 The “Student Syndrome” which describes the tendency of people to put tasks
off until the last minute.
 Multitasking used as a justification by management to reduce idle time.
 Complexity of networks makes no difference
 People need a reason to work hard is used as a justification by management
to cut back on durations.
 Game playing, wherein workers inflate estimates under the assumption that
management will arbitrarily cut them.
 Do Early Finishes and Late Finishes Cancel Out? So What? – The probabilistic
networks assume that early and late finishes cancel out. However, these
assumptions are rarely true in a practical project environment. One of the
reasons offered for the explanation is that the workers seldom report early
completions before the scheduled date in fear of being held responsible for

similar early finishes in the future as well. The resources rarely become available
before the expected start of an activity due to various reasons.
 The Critical Chain – Goldratt recommends that projects be schedule based on
the availability of key resources. He also recommends that individual activities
have such short durations that workers can’t apply the Student Syndrome. To
manage uncertainty, however, he recommends that discrete buffer time be
added to the overall project duration. Finally, Goldratt recommends ordering
activities into paths based on their resource dependencies as well as their
predecessor/successor relationships. The longest path is the “critical chain.”
Activities on the critical chain are given the priority for resources. Buffers are also
introduced into paths that feed the critical chain to ensure that delays off the
critical chain never slow it down.
TEACHING TIPS
Students will benefit from some simple in class examples about the concepts of resource
loading and leveling. One way to accomplish this is to work through a simple six or
seven activity network as a class exercise. The forward and backward pass is completed
and drawn out as a Gantt chart. Then, a resource is assigned to the activities. A graph is
then drawn, showing how the resource assignment causes some demand for each
consuming activity on each day. Then an activity with slack can be moved to illustrate
the leveling process.
The resource management tools in Microsoft® Project are very powerful, but in my
experience cause some of the worst problems for new users. To save the students
considerable frustration, the instructor should be prepared to discuss the following MSP
topics in class:
 Resource loading. How MSP interprets the percentage of a resource assigned to
an activity. What “Max Units” means and how it affects scheduling activities.
 Task Types. How the different task types affect the way MSP schedules activities
with resources.
 Effort Driven. How the effort driven choice affects the way MSP schedules
activities with resources.
PROJECT MANAGEMENT IN PRACTICE
Expediting Los Angeles Freeway Repairs after the Earthquake

Question 1: Of the six constraints, which were cost trade-offs and which were
scope trade-offs?

1) Cost Trade-offs: Constraints 2, 3, and 6 were cost trade-offs.

2) Performance Trade-offs: Constraints 1 and 4 were performance trade-offs.
3) Constraint 5 did not fall into either of the above categories of trade-offs.
Question 2: In what way were the performance trade-offs made? That is, how did
they affect performance?
The final product was not affected by the trade-offs. However, the work methods were
affected, sometimes leading to higher costs for execution of the work.
Question 3: What kinds of resource allocation approaches discussed in the
chapter were used in this situation?
From the available information, crashing under CPM was used. Resources were loaded
using the ASAP heuristic to identify the critical path.
Thirty Days to Rescue

Question 1: What “lessons learned” could you suggest for GHP from this project
for similar, future projects?
GHP could have learned immensely by working on this project. I would suggest them to
first understand the needs of the situation before taking on a project. Accordingly, the
resources for the situation should be assigned to prevent people performing the job from
feeling overwhelmed. Finally, I would suggest looking up any documented cases that
could match with the upcoming project to help plan for risks effectively.
Question 2: Does this project sound like a “mission impossible?” In what
regards?
At the onset, this project does sound to be a “mission impossible” given the
overwhelming needs of the project. The absence of the basic necessities required not
only careful planning, but also thoughtful consideration in terms of the community’s
literacy and education. It was only the hard work and continuous toil of the university
student volunteers that made this mission possible.
Question 3: What would you suggest to GHP regarding overcoming the short time
span for this kind of project?
I would suggest recruiting some experienced members of the society, in order to avoid
the 30-day restriction for the students. The experience and proper risk management
could help in overcoming the short time span of such a project in the future.
MATERIAL REVIEW QUESTIONS
Question 1: Identify several resources that may need to be considered when

scheduling projects
The typical resource managed in most projects is people’s time. Additional resources
that may need to be considered are:
 Machine time/capacity – Does the project require time on a specific machine,
particularly one that is a scarce resource?

 Facility availability – Are facilities physically large enough to serve the needs of
the project? In labor-intensive projects, this could be the facility of office space
including desks, chairs, phones, and computers.
 Transportation – Some projects, such as a major demolition or a large
convention, may put unusual strains on the transportation capacity of an area.
Question 2: What is resource loading? How does it differ from resource leveling?
1) Resource loading is the level of demand placed upon individual resources during a
specific time interval in a project schedule.
2) Resource leveling seeks to minimize fluctuations in the resource demand created
by a project.
Question 3: What is an activity slope and what does it indicate?

The activity slope, associated with “crashing” a project, identifies the trade-off between
time and money when duration is reduced to expedite a project. Generally, the cost to
perform an activity goes up as its duration is reduced.
Question 4: Name four priority rules. What priority rule is best overall? How would
a firm decide which priority rule to use?
Four of the many priority rules are:
 As Soon as Possible
 As Late as Possible
 Shortest Task First
 Minimum Slack First
As described in the text, the Minimum Slack First rule seems to work best for projects.
This rule favors the assignment of resources to tasks that are on/near the critical path.
Tasks that are delayed by not receiving resources will tend to become more critical in
the next round of assignments and rise to the top of the list.
A firm may choose to conduct its own research to determine which rule works best for
their unique circumstances. To do this, the firm needs to determine what constitutes a
measurably “better” outcome. If the literature does not describe a result that meets their
needs, then they could conduct trials using their own schedules and resource loading
patterns.
Question 5: Name three efficiency criteria that might be considered when

choosing a multiproject scheduling system.
Schedule slippage, resource utilization, and the amount of in-process inventory are three
efficiency criteria to be considered when selecting a multiproject scheduling system.
Question 6: What are two methods for addressing the constrained resources
allocation problem?
Heuristics (rules of thumb) and optimization models (mathematical programming
techniques) are two methods used to address constrained resource allocation problems.

Because of the scope and complexity of many project networks, heuristics are often
favored over optimization models.
Question 7: How does the task life cycle type affect our attempts to level the
resource loads?
We might face scenarios in which we have a choice either to borrow resources from a
task or to de-schedule the task. The task life cycle type helps us to identify the different
types of tasks from which the resources may be borrowed. In addition, it can be used to
deschedule an entire task in favor of a critical task that needs the resources. The life
cycle helps us to quantify the amount of damage that may be done to a project on the
basis of our descheduling or borrowing actions. It greatly helps in a manager’s attempt to
level resources.
Question 8: Describe the concept “critical chain” in your own words.

Using Goldratt’s meaning of the word “dependent,” the activities of a project can be
ordered into paths based on their resource dependencies as well as on their
technological precedence requirements. The longest of these paths of sequentially time-
dependent activities is known as the “critical chain.” A project, therefore, is composed of
its critical chain and of noncritical chains that feed into it. There are two sources of delay
for the project. One comes from a delay of one or more activities in the critical chain. The
second results from a delay in one or more of the activities on a noncritical or “feeder”
chain because such delays could delay activities on the critical chain. A project buffer
protects the critical chain, and feeding buffers protect the feeder paths. Resources used
by activities on the critical chain are given priority so that they are available when
required.
CLASS DISCUSSION QUESTIONS
Question 9: Why are large fluctuations in the demands for particular resources
undesirable? What are the costs of resource leveling? How would a PM determine
the “best” amount of leveling?
1) Large fluctuations in the demand for resources are very disruptive in the work place.
Raw material fluctuations, for example, can cause price increases or decreases,
which can lead to inaccurate budget estimates. Fluctuations may cause the need for
hiring and firing that is both time consuming and demoralizing for the participants.
The folks brought in must be trained to be effective, and then their training and
experience walk out the door when the demand drops.
2) When resources are leveled, the associated costs also tend to be leveled. If
resource use increases as time goes by, and if resources are shifted closer to the
present by leveling, costs will be shifted in the same way. The opposite is true, of
course, if resource usage is shifted to the future. Perhaps most important from a cost
perspective is leveling employment throughout a project or task. For most
organizations, the costs of hiring and layoff are quite significant. It is often less

expensive to level labor requirements in order to avoid hiring and layoff, even if it
means some extra wages will be paid. In any case, the PM must be aware of the
cash flows associated with the project and of the means of shifting them in ways that
are useful to the parent firm. The typical process is a negotiation between the PM
and the sponsor or customers, which tries to move milestones in a manner that
minimizes the resource fluctuations. Then resource leveling within the constrained
schedule takes place. The remaining fluctuations are dealt with through overtime,
outsourcing and contract labor. In general, the “best” amount of leveling is the
amount that minimizes cost and delay while maximizing productivity and morale.
Question 10: When might a firm choose to crash a project? What factors must be
considered in making this decision?
There are many potential reasons for crashing a project. They include:
1) Delay in predecessor activities requires compression in successors to maintain the
project schedule.
2) A risk event can be mitigated or avoided by crashing. For example, hurrying a project
to completion in order to avoid a hurricane.
3) Resources need to be freed up sooner to allow taking on a new and more profitable
project.
4) The customer may provide financial incentives for completing the project sooner than
originally planned.
5) Early project completion may be critical for political or economic reasons. The repair
of the LA freeway system is an example of this situation.
The bottom line to a business is that crashing has to make economic sense. The benefit
must outweigh the added cost. For a Government or non-profit organization, crashing
must provide some other perceived benefit that exceeds the cost. It should be noted that
costs and benefits in these types of considerations may not always be in monetary
terms.
Question 11: Why is the impact of scheduling and resource allocation more
significant in multiproject organizations?
In multiproject organizations, schedules and resource allocation have a greater impact
because of the complexity of the environment. The multi-project organization has PMs
competing against each other on behalf of a variety of projects, where each has a
different set of costs, benefits, and risks. The resource decisions are made in the context
of not just an individual task, but also the impact on many projects.
Question 12: How much should a manager know about a scheduling or resource
allocation computer program to be able to use the output intelligently?
Managers need a good working knowledge of strengths, weaknesses, and assumptions
used by a schedule or resource allocation computer program for several reasons:
 They need to understand whether the program is applicable in a particular
situation.

 They need to understand requirements for the type and quality of data that
makes the program work.
 They need to be able to evaluate the result to ensure that it makes sense.
 They need to be able to explain the result to the project team.
 They need to be able to defend the result to senior management.
Managers should perform due diligence and talk to multiple vendors and
possibly other customers of the software package in order to get a good
understanding related to the use of the software as well as support services
offered.
Question 13: With the significantly increased power of today’s -computers, do you
think the mathematical programming optimization approaches will become more
popular?
There is a difference between availability, popularity, and usefulness. Mathematical
programming will certainly become more available. For example, the Karmakar algorithm
is currently capable of processing about 800,000 variables simultaneously using a
desktop computer. However, very few people will have the skills needed to program
such complex equations successfully. My experience is that, unfortunately, most people
don’t have the skills to adequately use a far simpler tool like Microsoft® Project. Most
projects benefit far more from the mundane “blocking and tackling” tasks like
establishing a proper WBS than from sophisticated programming techniques.
Question 14: What are some of the limitations of AON networks?

The fundamental limitation is that it ignores resources. Based solely on task
predecessor/successor relationships, it determines the mathematically correct schedule.
The fact that the schedule may require the staff to grow by 600% in a week is ignored.
Like any modeling technique, it also is limited by the quality of the input data. It is
incapable of creating a good schedule out of bad data.
Question 15: Why is leveling of resources needed?

There are many potential benefits that can be realized by leveling resources assigned to
work on a project. They include:
1) Perceptions: When a project is hiring, laying off, hiring, laying off, and so on, it is
generally perceived as an unfavorable work environment. Current and potential
employees may wish to work somewhere else where the environment is more stable.
2) Economic Consequences: It is expensive to alter the employment relationship for
any resource. These expenses include setup and shutdown expenses each time a
change is made. Productivity will suffer, as there is a reduction in experience levels.
Question 16: What are some implications of resource allocation when an

organization is involved in several projects at once?
When several projects are managed at once, the optimization of each project must be
balanced against the total performance of the organization. In addition to schedule and
budget changes within a project, the organization will also need to respond to newly

authorized projects and the early shutdown of unsuccessful projects. To manage these
types of issues, the program manager should have a broader strategic perspective than
the one typically expected of a project manager in this environment. The program
manager will also need access to relevant, accurate, and useable data regarding the
issues of available capacity, current utilization, and expected demand arrival patterns.
In this environment, priorities are likely to be dynamic. The program manager will need
to ensure that the benefits of any resource changes will in fact exceed the costs
associated with making assignment changes.
Question 17: What are some of the indirect costs of crashing?

Some of the indirect costs that might be incurred by crashing include:
 Impact on employee morale to the extent that crashing involves sudden changes
in their priorities and/or unexpected overtime.
 The opportunity cost of tying up additional resources on crashed projects as
opposed to using them in other places where they may be used.
 Additional administrative costs for the additional resources which could include
management for increased headcounts.
 The added management focus required to manage the compressed schedule
and resource plan.
Question 18: How might AON be used for strategic planning purposes?
It is a tool for planning projects. In that context, it can become a part of strategic planning
in a couple of different ways:
 It can be used to schedule the strategic planning process itself.
 It, at whatever level of detail the process chooses, can be used to create a
schedule and a resource loading plan for the work being contemplated.
Question 19: List all the various ways that resources greatly increase scheduling
complexity.
The simplification that typically is applied to the resource loading process is that the
resources are distributed within each activity in a uniform manner. The reality is that
resource demands may not be uniform even within a single task. In addition, the skills
needed by a task often are defined in relatively broad categories, like “programmer.”
This implies that if the total demand is for six, where any six will do. It fails to recognize
the special skills that might be required for a particular task (e.g. left handed, C++
programmer with experience in high-speed graphics) or the ability level (e.g. apprentice
programmer versus twenty years of experience). Both of these considerations can
increase greatly the complexity of the scheduling task.
Question 20: Goldratt suggests setting task durations so short there is a high
probability they will not be done on time. What is his thinking here? Do you agree
with him?
Goldratt’s premise is that if the duration is short enough, it will eliminate the “Student
Syndrome,” which causes people to set tasks aside until the last minute. He is trying to

create for every task, the same sense of urgency that a single task being personally
expedited by the CEO would get.
This question has the potential for a very lively class discussion. Students who have
spent any time in the business environment will probably turn green at the thought of
signing up to task durations that they are unlikely to meet. What is often missing from
discussions of Goldratt’s Critical Chain is the tremendous change required in the
organization’s culture to make it work. The typical employee in the typical business takes
a long time to get things done because they are multi-tasking. Managers like multi-
tasking because it makes their resource planning simpler, all the bits and pieces of
resource demand can be added up to get whole numbers (sometimes called Full Time
Equivalents). Employees like multi-tasking for two reasons. First, they are always busy
which helps defend their position against a layoff. Second, it provides a ready-made
excuse for why something is late (“I would have gotten this done, except I had to work
on …”). For the short durations to work, multi-tasking has to be eliminated, and it has to
be okay to be late provided that you worked exclusively on that task. Further, as
explained in the text, the resource loading must on average be less than about 85% to
allow for uncertainty and surges in demand. This means that once in a while the
employee may be sitting around with nothing to do, and that’s okay too. All of this is
much different from the typical environment. Advocates of the Critical Chain method
have some powerful stories of the success that these methods bring, but only with the
full and enlightened commitment of senior management.
PROBLEMS
Problem 1: Given the following network, determine the first activity to be crashed
by the following priority rules:
(a) Shortest task first
(b) Minimum slack first
(c) Most critical followers
(d) Most successors

a) B is the shortest task.

b) B, C, or D all have zero slack.
c) B has the most critical followers, 2.
d) B has the most successors, 2.
Problem 2: Using the network above and the additional information below, find:
(a) The crash cost per day
(b) Which activities should be crashed to meet a project deadline of 13 days at
minimum cost? Assume partial crashing is allowed.
Activity Crash Days Δ Crash $Δ Crash $/Day

A 1 $200.00 $200.00
B 2 $75.00 $37.50
C 3 $150.00 $50.00
D 2 $100.00 $50.00
Figure 2
Figure 9.2 uses the data from problems 1 and 2 to answer problem 2.
b) Task B is on the critical path and it has the lowest cost per day $37.50 to crash
(additional cost of $75.00). It enables a 13-day completion without making any other new
tasks critical.
Problem 3: Consider the following network for conducting a two-week (10 working
days) computer training class:
(a) Construct a schedule showing:

ESs for all activities
LSs for all activities
Slacks for all activities

Critical path
(b) Given the following.
1. Find the crash cost per day.

2. Which activities should be crashed to meet a project deadline of 10 days
with a minimum cost? Assume partial crashing.
3. Find the new cost.
4. Is partial crashing an appropriate assumption in this kind of project?
Figure 9.3a converts the AOA diagram into an AON diagram.

Figure 9.3a answers the questions for problem 3a.
Activity Crash Days Δ Normal $ Crash $Δ Crash $/Day
A 3 $500.00 $300.00 $100.00
B 1 $200.00 $150.00 $150.00
C 2 $500.00 $400.00 $200.00
D 2 $200.00 $300.00 $150.00
E 1 $300.00 $250.00 $250.00
Σ Normal $ $1,700.00 Net Cost $
Option 1 A=1, E = 1 $350.00 $2,050.00
Option 2 A=2, D=1 $350.00 $2,050.00
Figure 9.3b responds to part b of problem 9.
4. The logic of compressing activities associated with training has to be examined
closely. If the activities have to do with preparation, then crashing may be appropriate. If
they are associated with classroom time, then crashing is probably a poor choice.

Problem 4: Given the following highway rerouting project,
(a) Draw the network.

(b) Find the ESs, LSs, and slacks.
(c) Find the critical path.
(d) If the project has a 1 1/2-year deadline for reopening, should we consider
crashing some activities? Explain.
Figure 9.4 shows the AON network data for problem 4.

c) The critical path is B, D, G as shown in Figure 9.4
d) On the surface the answer is no, since the duration as calculated is one month less
than the project deadline requires. It would be prudent, however, to perform analysis as
described in Chapter 8 to determine the probability of actually achieving this schedule.
Based on that analysis it may in fact be prudent to crash some activities.
Problem 5: Given the following network for a stock repurchase project with
outside consulting resource demands, construct a modified Gantt AOA chart with
resources and a resource load diagram. Suggest how to level the outside
consulting load if you can split operations.
code: activity, time/ resource units

Figure 9.5a is a modified Gantt chart indicating resource consumption at the end
of each task bar. The major timescale is in weeks and the minor timescale is in
days.
In Figure 9.5a, the peak resource load is 26 units beginning on September 4th and
ending on September 10th.
The Original Offered Load from Figure 9.5a.

Task 21 22 23 26 27 28 29 30 2 3 4 5 6 9 10 11 12 13 16 17 18 19 20 23 24
A 6 6 6 6 6 6 6 6 6 6
B 4 4 4 4 4 4 4 4 4 4
C 4 4 4 4 4
D 2 2 2 2 2 2 2 2 2 2
E 10 10 10 10 10
F 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8
G 6 6 6 6 6 6 6 6 6 6
H 2 2 2 2 2
I 2 2 2 2 2
Sum 14 14 14 14 14 16 16 16 16 16 26 26 26 26 26 12 12 12 12 12 10 10 10 10 10
Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Figure 9.5b presents the offered load in Figure 9.5a as a spreadsheet.

Original Offered Load
30
25
20
Resource Units
15
10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A B C D E F G H I Days
Figure 9.5c shows the resource histogram for Figure 9.5b.

The graphical layout of the resource histogram is useful in understanding the shape and
dispersion of the offered load to project resources. In leveling load, trade-offs may be
required between flattening a spiked distribution and increasing the number of critical
and near critical tasks in the project.
The Leveled Load from Figure 9.5a.
Task 21 22 23 26 27 28 29 30 2 3 4 5 6 9 10 11 12 13 16 17 18 19 20 23 24
A 6 6 6 6 6 6 6 6 6 6
B 4 4 4 4 4 4 4 4 4 4
C 4 4 4 4 4
D 2 2 2 2 2 2 2 2 2 2
E 10 10 10 10 10
F 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8
G 6 6 6 6 6 6 6 6 6 6
H 2 2 2 2 2
I 2 2 2 2 2
Sum 14 14 14 14 14 16 16 16 16 16 16 16 16 16 16 20 20 20 20 20 12 12 12 12 12
Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Legend
New critical path.
Original position of task.
Original critical path.
Original noncritical path.
Figure 9.5d presents the changes made to level load as a spreadsheet

Original Offered Load After Leveling
25
20
Resource Units
15
10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A B C D E F G H I Days
Figure 9.5e shows the leveled resource histogram for Figure 9.5bd.
Compare Figure 9.5e to Figure 9.5c. The peak demand for resources has been lowered
by six units. However, tasks E and I are now critical tasks due to the changes made in
leveling the originally offered resource loads.
Assuming the operations can be split, an outside consulting firm could help add
additional human resources to assist in leveling load.
Problem 6: Consider the following activity information and the constraint that the
project must be completed in 16 weeks.
In addition, activities c, f, h, and i may be crashed as follows. Assume partial

crashing.

Find the best schedule and its cost
Figure 9.6a shows the normal and crashed networks for problem 9.6.
Activity Crash Wk Δ Crash $/Wk

C 1 $40.00
F 4 $20.00
H 3 $10.00
I 3 $30.00
Options Σ Crash $
Option 1 H3,F4,I2 $170.00
Option 2 H3,F3,I1,C1 $160.00
Option 3 H2,F4,I1,C1 $170.00
Figure 9.6b shows the crashing options.
Option 2 is the most favorable option because it satisfies the time constraint and has the
lowest cost. However, it also increases the number of critical activities (Figure 9.6a).
Because two critical paths converge at event 7, completion probabilities should consider
the effects of path convergence.

Problem 7: The following data were obtained from a study of the times required to
conduct a consumer test panel study:
Figure 9.7a shows the normal and all-crash networks, times, and costs for
problem 7.
Normal Crash Slope Normal Crash Slope Slope ($000

Activity
Time Time Denominator $(000) $(000) Numerator per Week)
1-2 5 3 2 $6 $4 $2 $ 1.0
1-3 5 1 4 $5 $3 $2 $0.5
2-4 10 5 5 $7 $4 $3 $0.6
3-4 7 2 5 $6 $4 $2 $0.4
2-6 6 2 4 $5 $3 $2 $0.5
4-6 11 5 6 $9 $6 $3 $0.5
4-5 6 4 2 $6 $3 $3 $1.5
6-7 5 1 4 $4 $2 $2 $0.5
5-7 4 1 3 $5 $2 $3 $ 1.0
Least-Cost Crash Time = 14 Weeks
Least-Cost Cost = $47,100
5 8 13
3 D3 4 G5 5
5 8 13
B5
0
1 C5 F5 I1
0
A3
3 13 14
2 E6 6 H1 7
3 13 14
Figure 9.7b shows the tabular data required to evaluate problem 7d.

Saving
New
Activity s
Time
$(000)
4-5 5 $1.5
2-6 6 $2.0
1-3 5 $2.0
3-4 3 $0.4
Σ $ Saved $5.9
Figure 9.7c shows the outcome for problem 7d.
The least-cost crash time is 14 weeks and will cost $47,100.
Problem 8: Given the data in Problem 7, determine the first activities to be crashed
by the following priority rules:
(a) Shortest task first.
(b) Most resources first (use normal cost as the basis).
(c) Minimum slack first.
(d) Most critical followers.
(e) Most successors.
In all cases, crashing is applied only to critical path activities (1-2, 2-4, 4-6, and 6-7).
a) 1-2 and/or 6-7
b) 4-6, assuming that duration is equivalent to resource consumption.
c) All activities on the critical path have zero slack at present.
d) 1-2 has the most critical followers in problem 7.
e) 1-2 has the most successors in problem 7
Problem 9: Consider the project network below. Suppose the duration of both
activities A and D can be reduced to one day, at a cost of $15 per day of reduction.
Also, activities E, G, and H can be reduced in duration by one day at a cost of $25
per day of reduction. What is the least-cost approach to crash the project two
days? What are the shortest “crashed” duration, the new critical path, and the
cost of crashing?

Figure 9.9a compare the normal and least-duration crash networks for problem
8.14.
Normal Crash Δ Slope

Activity
Time Time Time $
A 4 1 3 $15
B 3 3 0 $-
C 1 1 0 $-
D 5 1 4 $15
E 4 3 1 $25
F 1 1 0 $-
G 3 2 1 $25
H 5 4 1 $25
I 2 2 0 $-
J 1 1 0 $-
Least-Cost Crash Options
New Crash
Activity
Time Costs

A1,D1 11 $30
A2 11 $30
D2 11 $30
Least-Duration Crash
New Crash
Activity
Time Costs
A1,D2,E1,G1,H1 5 $120
Figure 9.9b shows the tabular data used for problem 9.
Problem 10: Given a network for an HR training project with normal times and
crash times (in parentheses), find the cost-duration history. Assume indirect costs
for facilities and equipment are $100 per day. The data are:
The critical path is defined by the events 1,2,3,4. The normal duration is 17 days and a
normal cost of $100 per day; a total cost of $1,700.
Completio Crash Total
Activity Figure 9.10 shows the cost-duration
n Date Costs Cost
Norma history for problem 10.
l 17d $- $1,700 Since activity 2-4 is not on the critical
3-4 16d $25 $1,625 path, it is not crashed. The table indicates
that the lowest-cost crashing option was
1-2 15d $30 $1,555
always the first crash option taken.
1-2 14d $50 $1,505
3-4 13d $60 $1,465
2-3 12d $80 $1,445
Problem 11: Reconsider Problem 2, assuming a fixed overhead cost of $30 per
day but no project deadline. What is the least-cost crash program? What if the
overhead cost was $40? What if it was $60?

The benefits of crashing should exceed the costs of doing so. If overhead is $30 per day
and the least-cost option is $37.50 per day (activity B) then there is no benefit from
crashing this project.
If the overhead cost is $40 per day, then crashing activity B for two days should create a
savings of $5.00 and reduce the project’s duration by 13.3%. Assuming that early
completion reduces risk and/or that additional throughput (other opportunities) can be
captured, it makes sense to crash in this scenario.
If the overhead cost is $60 per day, activities B, C, and D should be crashed as much as
possible due to the impact on financial performance. Doing so will reduce the project’s
duration by 7 days (46.7%) while lowering costs by $95 (6.1%) from $1,550 to $1,455.
Problem 12: The network for shooting a TV commercial as shown in the table has
a fixed cost of $90 per day, but money can be saved by shortening the project
duration. Find the least-cost schedule.
Figure 9.12a shows the network history of crashing the TV commercial project.

Completion Crash Figure 9.12b shows the tabular

Activity Total Cost history for Figure 9.12a.
Date Costs
Crashing attacks duration to
Normal 19d $- $1,710
compress the schedule. As slack
1-2 18d $30 $1,650
approaches zero, the benefits of
2-3 17d $40 $1,600
crashing can be expected to fall
1-2 16d $50 $1,560 below the costs required to remove
1-2 15d $70 $1,540 time by crashing the critical path.
1-3,2-3,2-4 14d $140 $1,590
Problem 13: Given the following project to landscape a new building site,
(a) Draw a Gantt chart using MSP.

(b) Find the critical path and project duration in days.
(c) Given that each resource is assigned 100% to each task, identify the
resource constraints.
(d) Level the resources and determine the new project duration and critical
path.
(e) Identify what alternative solutions can be used to shorten the project
duration and not over-allocate the resources.
B, 2 E, 3
A, 2 D, 4 G, 2
C, 3 F, 1
The Gantt chart with critical path (A, C, D, E, G) in red looks like this:

The Resource Usage View from Microsoft® Project looks like this:
Looking at the usage, unless resources (x and w) have max equivalent headcount >2,
the 16 hour days should cause an over-allocation flag.
Over allocation of X cannot be solved within the slack of B, since it cannot move more
than one day until it encounters its successor, D. MSP’s resource leveling tools can be
used to seek a solution. If the analysis is allowed to go outside of slack, but is prevented
from adjusting resource assignments or creating splits, the result looks like this:

The system’s best answer is to extend the completion date of the project. If the system
is allowed to adjust resource assignments, its new solution looks like this:
Note that the completion date is the same, but activity F is very different. Its duration
has been extended to four days. On the first day resource Y is consumed, on days two
and three nothing happens, and then on day four resource X is consumed. The PM
would have to consider this schedule carefully before accepting it as in reality resource X
and Y may have to work simultaneously to complete the task.
In addition to these options created by the leveling algorithms in MSP the PM has other
options to consider:
 The project could work the intervening weekends or overtime during the week.
 Additional resources could be added to the project (e.g. a resource “Z”)
 Y could help X during week one.
 The scope of the project could be reduced.
The students need to be reminded that MSP, or any project management software for
that matter, will never come up with any of these other options. The only solution MSP
can initiate is to level the resources based on its internal rules. The other “managerial”
options are up to the PM to identify and explore.
Problem 14: Assume that a resource used by activities e, f, g, and h in the figure
below is scarce. To which activity would you assign the resource, based on the
following rules?

a. Minimum slack
b. Most successors
c. Most critical followers
d. Shortest task first
e. As late as possible.
a. g has a slack of 1
b. e, g, and h all have 1 successor
c. e has 1 critical follower
d. g has shortest time of 4
e. f has latest start time of 29
Problem 15: Given the following project (all times are in days):
(a) Draw the network and find the critical path, time, and cost for an all-normal
level of project activity.
(b) Calculate the crash cost-per-day (all activities may be partially crashed).
(c) Find the optimal way of getting an 18-day delivery time. What is the project
cost?
(d) Find the optimal way of getting a 16-day delivery time. What is the project
cost?
(e) Calculate the shortest delivery time for the project. What is the cost?

a. The network for this project is as follows:
D 4
G
1 A
3 E
C 5 6
B H
2 F
The critical path is B-C-E-H. The project duration and cost for all the normal level of
project activity is 20 days and $400, respectively.
b. The crash costs per day for all activities are shown in column F.
A B C D E F
Normal Normal Crash Crash Crash
Activity Time Cost Time Cost Cost/Day
a 5 $50 3 $150 50
b 4 $40 2 $200 80
c 7 $70 6 $160 90
d 2 $20 1 $50 30
e 3 $30
f 8 $80 5 $290 70
g 5 $50 4 $100 50
h 6 $60 3 $180 40
c. The spreadsheet that follows was created to find the optimal way of getting to an 8-
day delivery time. As shown, the total normal cost is $400 (cell C14) and the total crash
cost is $80 (cell I14) for a total project cost of $480 (cell B2). The 18 day duration was
achieved by crashing activity H 2 days (cell H13).

The optimal solution using Solver was found in the following way:
 Cell I14 was specified as the target cell to minimize
 The ranges H6:H13 and B18:B22 were specified as the changing cells
The following constraints were added:
 H6:H13 < G6:G13 (maximum amount each activity can be crashed)
 B18 > J7 (node 2)
 B19 > B18 + J8 (node 3)
 B19 > J6 (node 3)
 B20 > B19 + J9 (node 4)
 B21 > B18 + J11 (node 5)
 B22 > B20 + J12 (node 6)
 B22 > B21 + J13 (node 6)
 B22 < B1 (node 6 – project deadline)
 6:H13 > 0 and B18:B22 > 0 (all decision variables must be > 0)
 The “Assume linear model” check box was also selected
d. The optimal 16-day project duration can be found by entering 16 in cell B1 and then
resolving using the Solver. The optimal solution calls for crashing activity H 3 days, B 1
day, and D 1 day. The cost of completing the project in 16 days is $400 + $230 = $630.
e. If all activities are crashed as much as possible, the project can be completed in 14
days. Entering 14 in cell B1 and resolving, it is discovered that the project can be
completed in 14 days at a cost of $400 + $400 = $800.
Problem 16: A simulation model was developed in Section 9.7 to illustrate the
problem with assuming activity times were known with certainty. However, in the
simulation analysis, the activity times were assumed to be normally distributed.
Do you have any concerns with assuming that the activity times were normally
distributed? Redo the simulation analysis using a BetaPERT distribution with

parameters of 7, 10, and 15, for the optimistic, most likely, and pessimistic times
estimates. How do the results compare with the results obtained using a normal
distribution?
Problem 17: In Section 9.7 the consequences of not reporting early completion
times were discussed. Modify the simulation model you created for Problem 16
above so that early completion of the tasks before the scheduled time of 10 days
is not reported. Compare your results to the results obtained in Problem 16.
INCIDENTS FOR DISCUSSION
Bryce Power Tool Company

Questions: Is this technique a reasonable way to schedule the IT resources of
Bryce? Why or why not? What complication is added by making this four separate
projects?
No, it’s not. The first problem that Ertle needs to address is how the four schedules fit
together. He and Bryce need to know that the four individual projects are in fact not
working in resource conflict with each other. Once that has been assured he can
examine the resource demands. Choosing the minimum slack activity is a technique for
allocating resources among competing activities. It doesn’t guarantee that the projects
will complete on time, nor does it ensure that the people with the right talents are
assigned to the right jobs. Ertle needs to analyze the resource demand for his people
and examine all the options for solving over allocations, before choosing a single
solution.
Critical Care Hospital

Questions: What information must the project manager gather to use this method
properly? How should she use this version of CPM to reduce the project time?
This incident is a good opportunity to review all the data that is required to put together a
complete schedule and resource plan.
Once the project manager understands the resource loads, capacities, task durations,
probability distributions, and dependencies, she can run a simulation of interactions to
determine the best options for compressing the schedule by crashing tasks on the
critical path. She may also consider adjusting dependencies to compress the schedule
as well. This would involve finding more tasks that can work in parallel.
CASE: D. U. SINGER HOSPITAL PRODUCTS CORP.
Question 1: Construct the nine elements of the plan identified above.

The following are the nine plan elements:
1) Statement of Objectives

a) Aim: To make a market entry of the long-term antiseptic at the earliest possible
time.
i) Sub objectives:
(a) Achieve 95% product yield at a level of 80% of the full production goal
of 10 million liters/year ASAP.
(b) Meet all current FDA, EPA, OSHA regulations as well as internal
specifications.
(c) To completely document the manufacturing process.
2) WBS
3) The following AON network was developed using Microsoft® Project:

Note that the “Box Style” has been simplified from the MSP default for clarity.
4) The critical path and project duration (in weeks) are displayed with the Gantt chart
from MSP:
Activity ID Task Name Duration -2 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67
Start 0 days
a Product Rationale 8 wks
b Develop Formula 12 wks
c Product Specification 3 wks
d Regulatory Documentation 3 wks
g Develop Processing System 6 wks
e Develop Packaging Concept 8 wks
f Design Package 6 wks
h Develop Packaging System 8 wks
i Study Facility Requirements 4 wks
j Develop Capital Equipment List 3 wks
q Develop Procedures - Phase I 7 wks
q' Develop Procedures - Phase II 3 wks
k Procure Process Equipment 18 wks
l Procure Packaging Equipment 8 wks
m Procure Facilities 4 wks
n Install Process Equipment 4 wks
o Install Packaging Equipment 4 wks
p Install Facilities 4 wks
r Pilot Test 6 wks
End 0 days

5) Based on the network shown, and a start date of 9/12/05, the activity list, early-start
date, slack list and schedule would be as follows:
6) The following graphs from MSP illustrate the period labor requirements for each
group. The graphs show the hours of work per week required by each resource to
achieve the schedule. Note that the graphs change color to show resource over
allocation. This is because MSP allows the designation of “Max Units” for each
resource. For these graphs, all the Max Units had been set to 100% meaning that
the resource was available for 100% of its calendar. The calendar was set to the
“Standard” for both the tasks and the resources; a 5-day, 40-hour workweek. Note
that unless the Resource Leveling Tool is invoked, the value of Max Units has no
direct effect on the schedule.

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
140h
120h
100h
80h
60h
40h
20h
Packaging Task Force Overallocated: Allocated:
Note that the graph is scaled at “hours per week”, so a demand such as that during weeks 24-30 of 120 hrs/week indicates the need
for three workers.

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
300h
250h
200h
150h
100h
50h
R&D Group Overallocated: Allocated:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
180h
160h
140h
120h
100h
80h
60h
40h
20h
Corporate Engineering Overallocated: Allocated:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
80h
70h
60h
50h
40h
30h
20h
10h
H-P Manufacturing Overallocated: Allocated:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
140h
120h
100h
80h
60h
40h
20h
Package Production Mfg Overallocated: Allocated:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
100h
90h
80h
70h
60h
50h
40h
30h
20h
10h
Maintenance Overallocated: Allocated:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
140h
120h
100h
80h
60h
40h
20h
Purchasing Overallocated: Allocated:

The graph for the project as a whole cannot be viewed directly in MSP. One of its
limitations is that it cannot take separate resources and combine them in meaningful
ways. While some grouping is possible in certain views, no facility exists to display more
than one resource on a resource graph. The underlying data, however, can be easily
exported to Excel where the graph can be created. The following graph was created
from the “Work” data element that shows the total number of hours to be worked each
week, divided by forty to show workers.
Total Hours
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
53
55
57
59
61
63
65
Weeks
7) The cumulative work graphs can be taken directly from MSP and they look like this:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
2,500h
2,000h
1,500h
1,000h
500h
Packaging Task Force Total:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
4,500h
4,000h
3,500h
3,000h
2,500h
2,000h
1,500h
1,000h
500h
R&D Group Total:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
3,500h
3,000h
2,500h
2,000h
1,500h
1,000h
500h
Corporate Engineering Total:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
2,500h
2,000h
1,500h
1,000h
500h
H-P Manufacturing Total:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
2,500h
2,000h
1,500h
1,000h
500h
Package Production Mfg Total:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
1,400h
1,200h
1,000h
800h
600h
400h
200h
Maintenance Total:

-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67
1,400h
1,200h
1,000h
800h
600h
400h
200h
Purchasing Total:

Finally the cumulative graph from Excel looks like this:
8) Lengthening the schedule by 14% would change the completion from month 16,
week 65 to month 18, week 74. The key tasks to move for best leveling are c, d and
h. Since h is on the critical path, it will be delayed by the full 9 weeks. Activities c
and d will each be delayed by two weeks. The new schedule looks like this:
9) The cash flow requirements can be graphed by exporting the MSP data to Excel.
Use the “Analyzed Timescale Data in Excel” function from the Task Usage view with

the Table set to Cost. By using this view, the fixed cost associated with each task is
prorated across the duration and added to the labor costs. The result looks like this:
The peak in cash flow is caused by the equipment purchases beginning in week 48.
Question 2: Analyze the plan for potential problems.

The project has some areas of potential problems:
 The demand for R&D personnel is still quite high in months six and seven
 The demand for engineers is still quite high during the middle of the project
 Both maintenance and purchasing have high demand toward the back end of the
project
 The development of the processing and packaging systems are significant
activities that could become bottlenecks
Question 3: Analyze the plan for opportunities.

This project benefits considerably from level loading, achieving a significant reduction in
the overall peal load for resources with a small increase in duration. The project plan
would benefit from an analysis of the potential for crashing to reduce durations.
Question 4: Should the executive committee approve the plan? Why or why not?

Factors in favor of approval are:

 The project plan has a sound basis in recent experience and appears to be
detailed and well thought out.
 The risks are well understood
Factors against the approval:
 Uncertainty in the market for this product
Therefore, if test marketing of this product indicates sufficient demand, then the
committee should approve the project.
Question 5: What alternatives might the executive committee suggest for

analysis?
The committee should have marketing analyze how time sensitive the product launch is.
If the launch would benefit from acceleration, then the committee should have analysis
done on crashing costs. If the launch could be delayed, then the committee should
consider lengthening or delaying the project.

ch09 Numericals

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

ch09 Numericals

Încărcat de

Drepturi de autor:

Formate disponibile

Project Management: A Managerial Approach, 9th edition Instructor’s Resource Guide

crash cost  normal cost

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 1

9.5 Constrained Resource Scheduling – There are two methods to scheduling in a

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 2

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 3

 Greatest Resource Demand – This method favors activities or projects with

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 4

PROJECT MANAGEMENT IN PRACTICE

Expediting Los Angeles Freeway Repairs after the Earthquake

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 5

1) Cost Trade-offs: Constraints 2, 3, and 6 were cost trade-offs.

Thirty Days to Rescue

MATERIAL REVIEW QUESTIONS

Question 1: Identify several resources that may need to be considered when

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 6

Question 3: What is an activity slope and what does it indicate?

Question 5: Name three efficiency criteria that might be considered when

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 7

Question 8: Describe the concept “critical chain” in your own words.

CLASS DISCUSSION QUESTIONS

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 8

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 9

Question 14: What are some of the limitations of AON networks?

Question 15: Why is leveling of resources needed?

Question 16: What are some implications of resource allocation when an

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 10

Question 17: What are some of the indirect costs of crashing?

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 11

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 12

a) B is the shortest task.

Activity Crash Days Δ Crash $Δ Crash $/Day

(a) Construct a schedule showing:

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 13

1. Find the crash cost per day.

Figure 9.3a converts the AOA diagram into an AON diagram.

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 14

Problem 4: Given the following highway rerouting project,

(a) Draw the network.

Figure 9.4 shows the AON network data for problem 4.

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 15

The Original Offered Load from Figure 9.5a.

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 16

Original Offered Load

Figure 9.5c shows the resource histogram for Figure 9.5b.

Figure 9.5d presents the changes made to level load as a spreadsheet

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 17

Original Offered Load After Leveling

In addition, activities c, f, h, and i may be crashed as follows. Assume partial

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 18

Find the best schedule and its cost

Activity Crash Wk Δ Crash $/Wk

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 19

Normal Crash Slope Normal Crash Slope Slope ($000

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 20

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 21

Normal Crash Δ Slope

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 22

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 23

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 24

Completion Crash Figure 9.12b shows the tabular

(a) Draw a Gantt chart using MSP.

Copyright ©2015 John Wiley & Sons, Inc. Chapter 9 - 25