SCHEDULING RESOURCES AHMET LEVENT YENER, PhD

MUSTAFA HAFIZOĞLU, PMP

 Estimating Projects
• Estimating
–The process of forecasting or approximating the time
and cost of completing project deliverables.
–The task of balancing the expectations of stakeholders
and the need for control while the project is
implemented
• Types of Estimates
–Top-down (macro) estimates:
• analogy, group consensus, or mathematical relationships
–Bottom-up (micro) estimates:
• estimates of elements of the work breakdown structure

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 Why Estimating Time and Cost Are Important

• Estimates are needed to support good decisions.

• Estimates are needed to schedule work.
• Estimates are needed to determine how long the project
should take and its cost.
• Estimates are needed to determine whether the project
is worth doing.
• Estimates are needed to develop cash flow needs.
• Estimates are needed to determine how well the project
is progressing.
• Estimates are needed to develop time-phased budgets
and establish the project baseline.

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 Factors Influencing the Quality of Estimates

Planning
Horizon

Other (Nonproject) Project

Factors Duration

Quality of
Organization Estimates People
Culture

Padding Project Structure

Estimates and Organization

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 Estimating Guidelines for Times,
Costs, and Resources

1. Have people familiar with the tasks make the estimate.

2. Use several people to make estimates.
3. Base estimates on normal conditions, efficient methods,
and a normal level of resources.
4. Use consistent time units in estimating task times.
5. Treat each task as independent, don’t aggregate.
6. Don’t make allowances for contingencies.
7. Adding a risk assessment helps avoid surprises to
stakeholders.

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 Macro versus Micro Estimating

Conditions for Preferring Top-Down or Bottom-up

Time and Cost Estimates

Condition Macro Estimates Micro Estimates

Strategic decision making X
Cost and time important X
High uncertainty X
Internal, small project X
Fixed-price contract X
Customer wants details X
Unstable scope X

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 Estimating Projects: Preferred Approach
• Make rough top-down estimates.
• Develop the WBS/OBS.
• Make bottom-up estimates.
• Develop schedules and budgets.
• Reconcile differences between top-down and bottom-up
estimates

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 Budgeting

• Budgets:
–are plans for allocating organizational
resources to project activities.
• forecasting required resources, quantities needed,
when needed, and costs
–help tie project to overall organizational
objectives.
–can be used as tool by upper management to
monitor and guide projects.

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 Methods for Estimating Project
Times and Costs
• Macro (Top-down) Approaches
–Based on collective judgments and experiences of top
and middle managers.
–Overall project cost estimated by estimating costs of
major tasks
Project Estimate
• Consensus methods (Delphi Technique) Times
Costs
• Ratio methods (Parametrics, i.e.
cost estimate for m2 in construction)
• Apportion method
• Learning curves

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 Methods for Estimating Project
Times and Costs

• Micro (Bottom-up)
Approaches
–Template method
• Costs from past projects
–Parametric Procedures
Applied to Specific Tasks
–Detailed Estimates for the
WBS Work Packages
–Phase Estimating (Hybrid)

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 Phase Estimating over Product Life Cycle

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 Level of Detail
• Level of detail is different for different levels of
management.
• Level of detail in the WBS varies with the
complexity of the project.
• Excessive detail is costly.
–Fosters a focus on departmental outcomes
–Creates unproductive paperwork
• Insufficient detail is costly.
–Lack of focus on goals
–Wasted effort on nonessential activities

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 Comparison

• Top-Down Estimates • Bottom-Up Estimates

– Intended Use – Intended Use
• Feasibility (at conceptual • Budgeting
phase) • Scheduling
• Fund requirements • Resource requirements
• Resource capacity • Fund timing
– Preparation Cost – Preparation Cost
• 0,1-0,3 % • 0,3-1 %
– Accuracy – Accuracy
• - 20 %, + 60 % • - 10 %, + 30 %
– Method – Method
• Consensus • Template
• Ratio • Parametric
• Apportion • WBS packages

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 Comparison
• Top-Down • Bottom-Up
–Advantages –Advantage
• accuracy of • more accurate in the
estimating overall detailed tasks
budget
• errors in funding
small tasks need not –Disadvantage
be individually • risk of overlooking
identified tasks
–Disadvantage
• includes significant
error for low level
tasks

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 Developing Budgets
• Time-Phased Budgets
–A cost estimate is not a budget unless it is time-
phased.
•Time phasing begins
with the time estimate for
a project.
•Time-phased budgets
mirror how the project’s
cash needs (costs) will
occur or when cash flows
from the project can be
expected.
•Budget variances occur
when actual and forecast
events do not coincide.

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 Types of Costs
• Direct Costs
–Costs that are clearly chargeable to a specific work
package.
• Labor, materials, equipment, and other
• Direct (Project) Overhead Costs
–Costs incurred that are directly tied to an identifiable
project deliverable or work package.
• Salary, rents, supplies, specialized machinery
• General and Administrative Overhead Costs
–Organization costs indirectly linked to a specific
package that are apportioned to the project

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 Three Views of Cost

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 Refining Estimates
• Reasons for Adjusting Estimates
–Interaction costs are hidden in estimates.
–Normal conditions do not apply.
–Things go wrong on projects.
–Changes in project scope and plans.
• Adjusting Estimates
–Time and cost estimates of specific activities are
adjusted as the risks, resources, and situation
particulars become more clearly defined.

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 Refining Estimates
• Contingency Funds and Time Buffers
–Are created independently to offset uncertainty.
–Reduce the likelihood of cost and completion time
overruns for a project.
–Can be added to the overall project or to specific
activities or work packages.
–Can be determined from previous similar projects.
• Changing Baseline Schedule and Budget
–Unforeseen events may dictate a reformulation of the
budget and schedule.

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 The Resource 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.
• Resource-Constrained Scheduling
–Resource leveling (or smoothing) involves attempting
to even out demands on resources by using slack
(delaying noncritical activities) to manage resource
utilization.

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 Types of Project Constraints

• Project constraints delay the start of activities.

–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.

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 Constraint Examples

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 Classification of A Scheduling Problem
• Time Constrained Project
–A project that 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

–A project 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
started, it is carried to completion.
–Level of resource used for an activity cannot be
changed.
–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
– Projects that must be completed by an imposed date.
– Require the use of leveling techniques that focus on balancing or
smoothing resource demands by using positive slack (delaying
noncritical activities) to manage resource utilization over the duration of
the project.
• Eg. Botanical Garden Project
Project uses only one resource (backhoes); all backhoes are
interchangeable. The top bar chart shows the activities on a time scale.
The dependencies are shown with the vertical connecting arrows. The
horizontal arrows following activities represent activity slack. The number
of backhoes needed for each task is shown in the shaded activity
duration block. After the land has been scarified and the plan laid out,
work can begin on the walkways, irrigation, and fencing and retaining
walls simultaneously. The middle chart shows the resource profile for the
backhoes. For periods 4 through 10, four backhoes are needed.

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 Botanical Garden

•The bar chart shows the activities on a time scale.

•The dependencies are shown with the vertical connecting arrows.
•The horizontal arrows following activities represent activity slack.
•The number of backhoes needed for each task is shown in the
shaded activity duration block.

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 Botanical Garden
• Because this project is declared time constrained, the goal will be to
reduce the peak requirement for the resource and thereby increase
the utilization of the resource.
• A quick examination of the ES (early start) resource load chart
suggests only two activities have slack that can be used to reduce
the peak-fence and walls provide the best choice for smoothing the
resource needs.
• Another choice could be irrigation, but it would result in an up and
down resource profile. The choice will probably center on the
activity that is perceived as having the least risk of being late. The
smoothed resource loading chart shows the results of delaying the
fence and walls activity. Note the differences in the resource
profiles.
• The important point is the resources needed over the life of the
project have been reduced from four to three (25 percent). In
addition the profile has been smoothed, which should be easier to
manage.

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 Botanical Garden (cont’d)

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 Resource Allocation Methods
• The Botanical Garden project schedule reached
the three goals of smoothing:
–The peak of demand for the resource was reduced
–Resources over the life of the project have been
reduced.
–The fluctuations in resource demand were minimized.

• The latter improves the utilization of resources.

–Costs associated with changing the level of resources
are diminished
• the movement of people and equipment back and forth
among projects.

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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
– Projects that involve resources that are limited in quantity or by
their availability.
– Scheduling of activities requires the use of heuristics (rules-of-
thumb) that focus on:
Rule 1. Minimum slack
Rule 2. Smallest (least) duration
Rule 3. Lowest activity identification number
Others:
As soon as possible, As late as possible, Most critical followers
Most successor, Most resources first
– The parallel method is used to apply heuristics
• An iterative process that starts at the first time period of the
project and schedules period-by-period any activities scheduled to
start using the three priority rules.

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 Resource Allocation Methods (cont’d)
• The parallel method is the most widely used approach to apply
heuristics.
• The parallel method is an iterative process that starts at the first
time period of the project and schedules period-by-period any
activities eligible to start.
• In any period when two or more activities require the same
resource, the priority rules are applied.
– For example, if in period 5 three activities are eligible to start (i.e., have
the same ES) and require the same resource, the first activity placed in
the schedule would be the activity with the least slack (rule 1).
However, if all activities have the same slack, the next rule would be
invoked (rule 2), and the activity with the smallest duration would be
placed in the schedule first.
– In very rare cases, when all eligible activities have the same slack and
the same duration, the tie is broken by the lowest activity identification
number (rule 3), since each activity has a unique ID number.

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 Resource Allocation Methods (cont’d)
• When a resource limit has been reached, the early start
(ES) for succeeding activities not yet in the schedule will
be delayed (and all successor activities not having free
slack) and their slack reduced. In subsequent periods
the procedure is repeated until the project is scheduled.
• The shaded areas in the resource loading chart
represent the "scheduling interval" of the time
constrained schedule (ES through LF). You can
schedule the resource any place within the interval and
not delay the project. Scheduling the activity beyond the
LF will delay the project.
• The programmers are limited to three. Follow the actions
described in Figures. Note how the limit of three
programmers starts to delay the project.

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 Resource-Constrained Schedule through Period 2–3

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 Resource-Constrained Schedule

ES resource load chart

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 Resource-Constrained Schedule through Period 2–3

Period Action
0-1 Only activity 1 is eligible. It requires 2 programmers.
Load activity 1 into schedule.
1-2 No activities are eligible to be scheduled.
2-3 Activities 2, 3, and 4 are eligible to be scheduled. Activity 3
has the least slack (0) -apply rule 1. Load Activity 3 into
schedule.
Activity 2 is next with slack of 2; but, activity 2 requires 2
programmers and only 1 is available.
Delay activity 2. Update ES = 3, slack = 1.
The next eligible activity is activity 4, since it only requires 1
programmer. Load activity 4 into schedule.

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 Resource-Constrained Schedule (cont’d)

Resource-constrained schedule through period 2–3

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 Resource-Constrained Schedule through Period 3–7

Period Action
3-4 Activity 2 is eligible but exceeds limit of 3 programmers in pool.
Delay activity 2. Update ES = 4, slack = 0.
4-5 Activity 2 is eligible but exceeds limit of 3 programmers in pool.
Delay activity 2. Update ES = 5, slack = -1.
Delay activity 7. Update ES = 11, slack = -1.
5-6 Activity 2 is eligible but exceeds limit of 3 programmers in pool.
Delay activity 2. Update ES = 6, slack = -2.
Delay activity 7. Update ES = 12, slack = -2.
6-7 Activities 2, 5, and 6 are eligible with slack of -2, 2, and 0,
respectively.
Load activity 2 into schedule (rule 1).
Because activity 6 has 0 slack, it is the next eligible activity.
Load activity 6 into schedule (rule 1).
The programmer limit of 3 is reached.
Delay activity 5. Update ES = 7, slack = 1

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 Resource-Constrained Schedule (cont’d)

Resource-constrained schedule through period 3–7

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 Resource-Constrained Schedule through Period 7–13

Period Action
7-8 Limit is reached. No programmers available.
Delay activity 5. Update ES = 8, slack = 0.
8-9 Limit is reached. No programmers available.
Delay activity 5. Update ES = 9, slack = -1.
9-10 Limit is reached. No programmers available.
Delay activity 5. Update ES = 10 slack = -2.
10-11 Activity 5 is eligible.
Load activity 5 into schedule.
(Note: Activity 6 does not have slack because there are no
programmers available 3 maximum.)
11-12 No eligible activities.
12-13 Activity 7 is eligible.
Load activity 7 into schedule.

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 Resource-Constrained Schedule (cont’d)

Final resource-constrained schedule

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 Resource-Constrained Schedule

New, resource-constrained network

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 Resource-Constrained Schedule

• Observe how it is necessary to update each period to reflect

changes in activity early start and slack times so the heuristics can
reflect changing priorities. The new network reflects the new
schedule date of 14 time units, rather than the time-constrained
project duration of 12 time units. The network has also been revised
to reflect new start, finish, and slack times for each activity.
• Note that activity 6 is still critical and has a slack of 0 time units
because no resources are available (they are being used on
activities 2 and 5). Compare the slack for each activity found in the
earlier Figures; slack has been reduced significantly.
• Note that activity 4 has only 2 units of slack rather than what
appears to be 6 slack units. This occurs, because only three
programmers are available, and they are needed to satisfy the
resource requirements of activities 2 and 5.
• Even though the project duration has increased from 12 to 14 time
units, the number of critical activities (1, 2, 3, 5, 6, 7) has increased
from four to six.

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 The Impacts of Resource-Constrained
Scheduling

• Reduces delay but reduces flexibility.

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

• Given the network plan that follows, compute the

early, late, and slack times.
– What is the project duration?
– Develop a loading chart for resources Electrical Engineers (EE),
and Mechanical Engineers (ME). Assume only one of each
resource exists.
– Given your resource schedule, compute the early, late, and
slack times for your project.
– Which activities are now critical?
– What is the project duration now?
– Could something like this happen in real projects?

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 Exercise

1 4 5
EE EE ME
2 1 6

2 6
Start EE ME End
4 2

3 7
ME EE
3 4
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 Develop a loading schedule for each resource below

EE

ME

0 1 2 3 4 5 6 7 8 9 10 11 12

Fill in the times below for a resource activity schedule

ES LS EF LF SLK

1 EE LEGEND

2 EE ES ID EF

3 ME SLK R* SLK

4 EE LS DUR LF

5 ME

6 ME * Resource

7 EE

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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:
• Customer requirements and contract commitments
• Time-to-market pressures
• Incentive contracts (bonuses for early completion)
• Unforeseen delays
• Overhead and goodwill costs
• Pressure to move resources to other projects

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Options for Accelerating Project Completion
• When resources are not
constrained: (maintains
the essence of the
original plan)
– Adding Resources
– Outsourcing Project Work
– Scheduling Overtime
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• When resources are
constrained: (departs
from the original plan)
– Fast-Tracking
– Reducing Project Scope
– Compromise Quality
– Critical-Chain
• to save the slack as a time
buffer to complete project
early or cover delay
problems.
6–49