ISOM 4750 Business Project Management

Course Outline

Project Life Cycle:

Overview

• Defining the project

• Estimating project time and costs
Project Planning • Developing a project plan
• Managing risk
and Control • Analyzing resource and optimizing tradeoffs
• Tracking and evaluating project performance
• Project audit and closure

Organizational and
People issues

1
Technical vs. Resource Constraints

After limited resources

are considered

2
Outline
 Resource constrained projects
 Time constrained projects vs. resource
constrained projects
 Resource leveling method
 Parallel method (slack, duration, and ID)
 Splitting and Multi-project resource schedules

 Project optimization using MS Project

3
Time-constrained vs. resource-constrained

If the critical path is delayed, will resources be added to get back on

schedule?

Time Performance Cost

Constrain

Enhance

Accept

4
Project Scheduling Problems
 Project network times are not a schedule until resources
have been assigned

 Types of project scheduling problems

 Time-constrained project: Limited time, flexible resources
 Resource-constrained projects: Limited resources, flexible time

 Resource constraints
 People
 Materials
 Equipment
 Working Capital

5
Time-constrained problems

 Resources are available and adequate

 The focus is on resource utilization

 Try to even out resource demand (e.g., lower peak

demand by delaying non-critical activities)

6
Time Constrained Project Example:
Botanical Garden

Deadline
Bh = number of backhoes required; max = 3 Bh

7
 Before
smoothing

Fence and
walls, 2 Bh

After Fence and

smoothing
walls, 2 Bh

8
Botanical Garden Example After Resource
Smoothing

2 Bh

Bh = number of backhoes required; max = 3 Bh

If the project’s required completion time is less
than 24, more resources must be added.

9
Resource-constrained problems
 Prioritize and allocate resources to minimize delay

 Resource-constrained project scheduling problems

 Complex mathematical problems that often require the use of
heuristic methods

 Parallel method
 Minimum slack (as a primary rule to select task)
 Smallest (least) duration (as a secondary rule to break any tie)
 Lowest activity ID

10
Resource Constrained Project Example
Using Minimum Slack Heuristic Method

TS TS

11
 ES Resource Load Chart

With resource constraint,

TS = LF – EF Max = 3P
= LF – ES – Dur

12
Resource Constrained Schedule: Period 2–3
Load task 3 first (minimum slack heuristic) and then task 2.
Since there is not enough resource for task 2, delay it by
one period. Afterward, load task 4 since there is one more
programmer is available. Continue with the next period.

13
Resource Constrained Schedule: Period 5–6
Task 2 is delayed until period 6 before
enough programmers are available. The
slack times for both tasks 2 and 7 need
to be updated. A negative TS means the
project will be delayed as well.

14
Final Resource Constrained Schedule
The process continues until all task are loaded according to the
heuristic procedure (in the order of minimum slack, shortest duration
and ID number). The final result suggests that the project completion
time needs to be delayed by 2 periods due to the resource constraint.

X X X X
12

10

15
Revised Network Diagram with Resource
Constrained Consideration

1 3 7

TS TS

16
Computer Demonstration of Resource
Constrained Scheduling: EMR project
 EMR project
 Develop a handheld electronic medical reference guide used by
emergency medical technicians and paramedics
 Download the project file from the course web for reference

 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
 Capacity = 8 x 8 or 64 person-hours per day

17
EMR Project: Network Diagram View Before
Resources Leveled

Project start date: January 1

Completed by: February 14
Duration: 45 days

18
EMR Project: Before Resources Leveled

45 days

19
ERM Project: Time Constrained Resource
Usage View

Only a capacity of 64 person-hours per day is available

20
Resource Graph for the EMR Project

21
EMR Project: Leveling Resource Utilization

22
EMR Project: Resource Usage View After
Leveling

Resource usage is now within the capacity of 64 person-hours per day

23
EMR Project: Network Diagram View After
Resources Leveled

Project start date: January 1

Completed by: Feb 26
Duration: 57 days

24
EMR Project: After Resources Leveled

25
Splitting Activities

Activity duration without splitting

Activity A Activity B Activity C

Activity duration split into three segments: A,B,C

Activity A Activity B Activity C

shutdown start-up

Activity duration split with shutdown and start-up

26
Splitting/Multitasking
 What it does?
 A scheduling technique for getting a better project schedule
and/or increase resource utilization
 Involve interrupting work on an activity to employ the resource
on another activity, then returning the resource to finish the
interrupted work

 Issues to consider:
 Only feasible when startup and shutdown costs are low
 Potentially loss of productivity and more delays

27
Multi-Project Resource Schedules
 Common multi-project scheduling problems
 Overall project slippage: Delay on one project creates delays for
other projects
 Inefficient resource utilization: The peaks and valleys of
resource demands create inefficient utilization
 Resource bottlenecks: Shortages of critical resources required
for multiple projects cause delays

 Managing multi-project scheduling

 Create project offices or departments to oversee the scheduling
of resources across projects
 Use a project priority system
 Outsource projects if possible

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Learning Objectives
 Describe different types of project constraints
 Solve a simple resource leveling problem by inspection
 Solve a resource constrained project scheduling problem with the
minimum slack heuristic method
 Discuss the risk of activity splitting and the challenges of managing
multiple project schedules
 Use MS Project to optimize the resource utilization

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 Using MS Project for Optimizing the Project

Plan Optimize Control Communicate

What to do? How to do it in MS Project?

Use the Resource Usage view to check if there is any
Analyze resource usage
over-allocation problems
Solve resource over- Delay or split a task, assign a different or additional
allocation problems resource, use overtime, shorten the duration, etc.
Tools ► Level Resources (Level only within available
Level over-allocations
slack)
Time-cost tradeoff (by manual calculation or trial
Shorten task duration
runs in MS Project)

30
Project Optimization Using Microsoft Project
Using Microsoft Project

Plan Optimize Control Communicate

General direction
5. Understanding the To better understand the project plan and
project plan identify different ways to improve it.

Specific tasks to be accomplished

6. Improving the driver
5.1. Identifying total and free slack
resource
5.2. Identifying and assessing the critical path
5.3. Evaluating the project’s cost
5.4. Evaluating the work required
5.5. Adding schedule reserve
5.1. Identifying Total and Free Slack

• Total slack indicates how much time a given task can be delayed from its early start without
impacting the end date of the project
• Free slack not only will not delay the end date of the project if we delay the task from its early
start date, but none of its immediate successors will be delayed either
– Example: If the "review requirements" task has two days of Free Slack that we choose to take
advantage of, we still don't need to reschedule the resources responsible for any of its
immediate successors.
• To look up the information on slack
– View > Table > Schedule, or
– Right mouse click on the intersection of the column and row headings to bring up the Table
menu > Schedule

Free and Total Slack

give a quick reading on
where there's some
scheduling leeway in
the project
5.2. Identifying and Assessing the Critical Path

• Critical tasks
– Note that “critical” in this context is from a scheduling perspective only (all tasks are important
to the overall success of the project)
– Although we're used to thinking of them as the tasks with zero Total Slack, the definition of
"Critical" is actually those tasks with Total Slack less than or equal to a specified value
– Often this value is defined to be zero and that's the default in Project
• Critical Path
– The path whose tasks have the least Total Slack
– The path through the project network diagram that will take the longest to accomplish
– It paces the completion of the project
• Identifying the Critical Path is valuable because it points out where we need to focus our attention
if we're to meet the project schedule
• Definition of critical task can be changed if necessary through:
– Tools > Options > Calculation >
Tasks Are Critical if Slack is Less Than or Equal to ____ Days
– Why do that? (So a project manager can get an understanding of which tasks are "near-
critical“)
– These are tasks that could easily become critical if they are delayed or their duration
increases beyond what was planned
5.2. Identifying and Assessing the Critical Path

The criteria for graphically depicting tasks as being

critical can be manually set.
5.3. Evaluating the Project’s Cost

• When a resource is assigned to a task and Work is given to that resource, the cost of that work is
automatically calculated by Microsoft Project. This is then added to any Fixed Costs as well as
other resource costs for the task and displayed in the Total Cost column.
• Total Cost = Resource Costs + Fixed Costs
– Resource costs
• Work resources (not consumed in the course of doing the work)
– Standard Rate
– Overtime Rate
– Cost/Use
• Material resources (consumed in the course of doing the work)
– Standard Rate
– Cost/Use
– Fixed Costs
• The Total Cost can easily be seen by going to the Cost table
– A plot of cumulative costs over time can be seen both in a tabular and graphical format in
Microsoft Project and can be readily exported to Excel
– A spending plan in which much of the project budget will be spent in the early stages of the
project is considerably riskier
5.3. Evaluating the Project’s Cost

• To view the Cost table:

– View > Table > Cost, or
– Right mouse click on the intersection of the column and row headings to bring up the
Table menu > Cost
5.3. Evaluating the Project’s Cost

• To view the spending profile for the project:

• View > Resource Graph
Right mouse click in the background of the chart to get a pop up menu Cumulative Cost
• Right click in the background again and select Bar Styles
In the Filtered Resources side of the dialogue box, select Line from "Show as” field for Total
Costs
• For the other fields, select Don't Show.
5.4. Evaluating the Work Required

• View > Resource Graph

Right mouse click in background and select Work
• Right mouse click in background again and select Bar Styles
In the Filtered Resources side of the dialogue box, select Line in the “Show as” field for Over-
allocated Work and Allocated Work. Select Don’t Show in other fields.
Using Microsoft Project

Plan Optimize Control Communicate

5. Understanding the
project plan

General direction
6. Improving the driver Improve project schedule by optimizing the
resource resource utilization.

Specific tasks to be accomplished

6.1. Understanding the driver resource
6.2. Evaluating options for improving the
schedule
6.3. Identifying resources over-allocations
6.4. Leveling resource utilization
6.1. Understanding the Driver Resource

• Driver resource
– The resource that determines the duration of a particular task when multiple Resources are
assigned
– It paces the completion of the task
– Adding additional resources (other than the driver resource) to a task will not necessarily
reduce its duration
• If a new resource with limited availability is assigned to a task, he or she may become the driver
resource, increasing the duration of the task despite the additional resources working on it
• There is no indicator in Microsoft Project that readily flags a resource as being the driver resource
on a particular task
– Easy to see who is pacing the duration for a given task by going to the Task Usage view and
looking at whose work is spread throughout the duration of the task
– View > Task Usage
6.1. Understanding the Driver Resource

Work | Duration (i.e., work 6 hours per day)

Paul is the driver resource for “review outline with

stakeholders.”
6.2. Evaluating Options for Improving the Schedule

• You can improve the schedule and shorten the project timeline:
– Allow overtime work
– Increase the Working Time on the Resource or Project Calendar
– Increase Resource Availability via the Resource Information dialogue box
– Add more resources to tasks
– Reassign resources from one task to another
– Insert lead time to begin tasks earlier
– Reduce the scope of the project or particular tasks
– Increase time available on Task Calendars that may be constraining the schedule
– Rearrange tasks in the project network diagram if appropriate
• If after examining all of the reasonable alternatives for reducing the schedule, the requested end
date for the project still doesn't look achievable
– The project needs to be significantly restructured (change the scope or the end date)
• Use a time/cost curve as a decision tool when working with stakeholders to determine the
preferred balance between cost and schedule
– To show the additional cost of incremental reductions in the schedule or, conversely, cost
savings by taking longer to do the project
6.3. Identifying Resource Over-allocations

• Part of successfully managing a project involves ensuring that individuals' workloads are realistic:
– The Resource Calendar is the primary determinant of how much time an individual has
available to perform work on the project
– It is also the basis for determining when an individual is over allocated, when they have too
much work to perform within a given time period
• If the Resource Calendar is not set up to reflect the planned working hours for the individual,
more work will be assigned to the individual than there are hours in their workday and over-
allocations will not be appropriately flagged.
• In addition to the Resource Calendar, a number of other factors such as Max Units, Units,
overtime that has been authorized, and the amount of work associated with the task itself are all
considered in making the determination as to whether a resource is over-allocated or not.
• To view workload and possible over allocations:
– View > Resource Usage
6.3. Identifying Resource Over-allocations

• To set the sensitivity level that Microsoft Project uses for determining whether to display an
exclamation mark indicator:
– Tools > Level Resources > Look for Over-allocations on a ______ Basis
– This setting defaults to Day-by-Day so that the indicator is not displayed if the resource has
too much work to do within a particular series of minutes or in a given hour
• Not all of the over-allocations noted by Microsoft Project are necessarily serious.
– Example: If you tracks Work on a minute-by-minute basis, some over-allocations may occur
when there is more Work to be done in a minute or an hour than there is time available
– These are indicated by a Resource Name in red without a corresponding exclamation mark in
a yellow diamond
– Depending on the nature of the project, these may be relatively unimportant over-allocations
and may best be resolved by the individuals responsible for the tasks rather than by the
person assembling the plan
• More serious instance of overloading
– When you see an exclamation mark in the yellow diamond, there is an over-allocation on a
daily basis
6.3. Identifying Resource Over-allocations

An exclamation point in the Indicators column

generally indicates a serious over-allocation.
6.4. Leveling Resource Utilization

• Leveling is done to eliminate instances of over-allocation in which a resource has too much work
to accomplish within a given timeframe
– The Leveling function in Microsoft Project works by inserting a delay to the task
• There are three Leveling schemes:
– ID only (tasks with higher numbers are delayed first)
– Standard
– Priority standard
• The Standard and Priority Standard methods use the following factors (in order):
– Dependencies: Tasks without successors should be delayed before those with successors
– Total Slack: Tasks with Total Slack should be delayed than those with less or no Total Slack
– Start Date: Tasks starting later should be delayed before those starting earlier
– Project Priority Value: Tasks in high priority projects are less likely to be delayed than are
those in lower priority projects
– Task Priority Value: Low Priority tasks should be delayed before high Priority tasks within a
given project
– Constraints: Constrained tasks are less likely to be delayed than those without constraints
6.4. Leveling Resource Utilization

• One approach to utilizing the Leveling capability is to set it up conservatively first

– By selecting “Level only within available slack" and “Leveling can adjust individual
assignments on a task" and by not selecting “Leveling can create splits in remaining
work" will make minimal changes to the schedule while resolving whatever over-allocations
– A more aggressive approach can then be tried if the conservative tack doesn't yield much
• The delay inserted by the Leveling function can easily be removed by clicking on the Clear
Leveling button (at the bottom of the dialog box)
• Be careful if you select Automatic leveling
– Doing so will instruct Microsoft Project to delay
work on a continuous basis as the plan is
created
– This can be difficult to keep track of and may
result in a plan not fully supported
• If the “Level only within available slack" option is
not selected, even tasks without any slack may be
delayed in order to eliminate resource over-
allocations
– The end date of the project is likely to go out in
time as a result of this, sometimes significantly.