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Resource Allocation

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Resource Allocation

BBUS541

Hiroshi Ochiumi

- Projects Compete With One Another for Resources
- resources that are not consumed
- resources that are consumed

- Goal of Resource Allocation is to Optimize Use of Limited Supply
- Requires making trade-offs
- time constrained
- resource constrained

Expediting a Project

BBUS541

Hiroshi Ochiumi

- Time-Cost Trade-off Model
- A model that develops the relationship between direct project costs, indirect costs, and time to complete the project by minimizing the sum of direct and indirect costs.

- Crash Costs
- The additional costs of an activity when time to complete it is shortened.

Step 1:Prepare CPM-type network diagram.

a. Normal cost (NC)

b. Normal time (NT)

c. Crash time (CT)

d. Crash Cost (CC)

Step 2:Determine the cost per unit of time to expedite (or crash) each activity.

Step 3:Compute the critical path.

Step 4:Shorten the critical path at the least cost.

Step 5: Plot project direct, indirect, and total-cost curves and find the minimum-cost schedule.

5

B

3

2

2

7

D

A

7

10

ES=0

EF=2

4

C

2

6

- A-B-D
2+5+3=10

- A-C-D
2+4+3=9

- Where exactly do we want to crash?

5

Cost +2

B

2

2

2

7

D

A

7

9

ES=0

EF=2

4

C

2

6

- A-B-D
2+5+2=9

- A-C-D
2+4+2=8

- Where do we want to crash?

5

Cost +2+2

B

1

2

2

7

D

A

7

8

ES=0

EF=2

4

C

2

6

- A-B-D
2+5+1=8

- A-C-D
2+4+1=7

- Where do we want to crash?

4

Cost +2+2+3

B

1

2

2

6

D

A

6

7

ES=0

EF=2

4

C

2

6

- A-B-D
2+4+1=7

- A-C-D
2+4+1=7

- Where do we want to crash?
- Do we want to crash C?

4

Cost +2+2+3+4

B

1

1

1

5

D

A

5

6

ES=0

EF=1

4

C

1

5

- A-B-D
1+4+1=6

- A-C-D
1+4+1=6

- Where do we want to crash?
- Do we want to crash C only?

3

Cost +2+2+3+4+3+2

B

1

1

1

4

D

A

4

5

ES=0

EF=1

3

C

1

4

- Can we continue?

- Can we use Excel Solver?

- Objective
- minimize crashing costs

- Decision Variables
- amount to crash activities
- time events occur, or EST’s

- Constraints
- amount each activity can be crashed
- precedence relationships
- complete project by specified time
- nonnegativity

Resource Loading

BBUS541

Hiroshi Ochiumi

- Amount of specific resources that are scheduled for use on specific activities or projects at specific times.
- Usually a list or table.

Resource Leveling

BBUS541

Hiroshi Ochiumi

- We evaluated project durations only in terms of time.
- We have to consider when and for what purposes:
- People
- Equipment
- Material
- Facilities

- are used.

- Overallocation must be resolved.
- Move activities so that resources do not exceed their capacities.
- Without extending the project duration if possible