PLANNING ENGINEERING AND

PROJECT MANAGEMENT

By

Lec. Junaid Arshad

11

Lecture#10

DEPARTMENT OF ENGINEERING MANAGEMENT

Topics Covered

Resource Management

Project Costing

Sample Problems

Each activity of the project has certain resource requirements i.e. people and machine. These requirements (usually) vary with activity duration.

For example, an activity has a total requirement of 12 days (man-days) of a welder and a helper. With the normal activity duration of 6 days, 2 welders and 2 helpers available will perform the task.

By crashing, this activity can be completed in 4 days. One additional welder and helper has to be hired on job basis or on contract.

Resource ManagementResource Management

Determining what resources will be required (labor, equipment, material)

What quantity for each resource will be required

When are resources available to perform project activities.

Estimating Resource Requirements

(For Scheduled Activity)

Resource Estimating Techniques

Expert Judgment – Any group or person with specialized knowledge.

Bottom-Up Estimating – Decompose activities into smaller work components.

Three Point Estimating – Optimistic, pessimistic and most likely values are determined to calculate estimate.

The four major stages of resource scheduling process are

Resource definition Resource allocation Resource aggregation Resource leveling

Resource definition

Resource definition involves identifying the critical resources that need to be planned and managed for the successful completion of the project.

Resource Scheduling Process

Resource allocation, is concerned with assigning the required number of those resources identified in the previous step to each activity identified in the plan.

More than one type of resource may be attributed to a specific activity. For example, fixing the plates on a ship's hull may require 10 fitters, 20 welders, 15 laborers and a certain type of welding machine.

Resource Allocation

From a practical standpoint, resource allocation does not have to follow a constant pattern; some activities may initially require fewer resources but may require more of the same resources during the later stages of the project.

In a multi-project environment as projects are competing for limited resources, resource allocation addresses the problem of the optimum use and timing of the assignment of these resources to the various project activities.

Resource aggregation, or resource loading, is simply the summation, on a period-by-period basis, of the resources required to complete all activities based on the resource allocation carried out in the previous stage.

The results are usually shown graphically as a histogram. Such aggregation may be done on an hourly, daily, or weekly basis, depending on the time unit used to allocate resources.

When a bar chart is used as the planning tool, the resource aggregation is fairly simple and straightforward. For a given bar chart, there is a unique resource unit aggregation chart which can be drawn underneath the bar chart.

A separate graph will be required for each resource unit.

Resource Aggregation

An example is shown in figure 01 below, where, for a particular resource, the required resource units for each time period are annotated on the bar chart. The total number of resource units for each time period can then be summed and a resource aggregation or load chart can be produced.

Resource Unit Aggregation Chart Showing Resource Requirements Associated with Earliest and Latest Start Along with Highlighted

Resource Unit Requirements for Critical Path Activities.

Resource leveling ensures that resource demand does not exceed resource availability.

Resource Leveling Resource Leveling is a process used to examine a project for an unbalanced use of resources (usually people) over time, and for resolving over-allocations or conflicts.

Resource Demand Compared to Resource Availability

Analyzing the issues involved in resource leveling for a situation where a bar chart has been used as the primary planning technique for a simple project.

The reason for this is that resource leveling must be considered within a time framework and bar charts are drawn to a time scale while networks are not.

In figure the time-scale for the activities comprising the project are shown in a bar chart, which also shows resource requirements for one particular resource unit.

An examination of the bar chart and its associated resource chart in figure 01 shows that improvements can be made to the level of resource requirements by:

Delaying or bringing forward the start of certain activities

Extending the duration of certain activities and so reducing the demand for resources over the duration of the activity or by a combination of both of these adjustments

Resource SmoothingResource smoothing is part of the resource leveling process.

In itself, resource smoothing is the process that, not withstanding any constraints imposed during the leveling process, attempts to determine a resource requirement that is "smooth" and where peaks and troughs are eliminated.

For example, even if 7 units of a given resource are available at any one time, utilizing 5 of these units each week is preferable to 4 in one week, 7 the next, 2 the next and so on.

Even if there is no limit to the amount of any one resource available, it is still desirable that resource usage is as smooth as possible.

Given that the resource requirements of those activities on the critical path are fixed, some order or priority needs to be established for selecting which activity and which particular resource associated with this activity should be given priority in the smoothing process.

In determining which activity should be given priority, a subjective judgment should be made about the type of resource (or resources) associated with each activity; priority should be given to the activities whose resources are considered to be most important.

Beyond this consideration, activities should be ranked in order of total work content and total float or slack available for that activity. A useful device for prioritizing is to consider the ratio of total work content/total float remaining and give priority to activities with the highest value of this ratio.

Activity Preceding

Activity

Duration

(days)

Persons Required

Remarks

A - 3 2F + 2L F-Fitter

B - 4 2M + 2L L-Labor

C - 6 2W+ 2L W-Welder

D A 10 4F + 4L M-Mason

E B 4 2M + 2L

F C 2 2W + 2L

G D 4 2F + 2L

H E, F, G 3 3F + 3L

Problem 11Problem 11Develop network model and resource requirement plan for the project given

below:

Problem 11Problem 11

Solution of Problem 11Solution of Problem 11

Resource bar chart with given requirementsBar Chart with given Resource RequirementsBar Chart with given Resource Requirements

Practice Problem 04Practice Problem 04Bar Chart with modified Resource RequirementsBar Chart with modified Resource Requirements

Resource Leveling is done on non-critical activities without any change in project finish time.

Solution of Problem 11Solution of Problem 11

Histogram for Labor required in the ProjectHistogram for Labor required in the Project

Solution of Problem 11Solution of Problem 11

F

Histogram for Fitters required in the ProjectHistogram for Fitters required in the Project

Solution of Problem 11Solution of Problem 11

The DURATION of a task is the time required for its execution and depends upon the units of resources involved in the task.

The duration is most often measured in days or in working hours. (16 hours)

The UNITS are the resources available to perform the task. For human resource, we speak of people. ( 2 people)

The WORKLOAD of a task is the result of duration multiplied by the units. This assessment is often measured in people-days or in people-hours. ( 32 people-hours)

DURATION = WORKLOAD / UNITS16 hours = 32 people-hours / 2 people

Workload and its Calculation

A team composed of two workers do a task in six days at 100% efficiency

HYPOTHESIS:

If the efficiency of a 4 workers team is only 75%, what will be the task duration?

ANSWER:

4 days = 12 person-days / (4 x .75)

Cost is a resource sacrificed or foregone to achieve a specific objective, or something given up in exchange.

Costs are usually measured in monetary units, such as dollars.

Project cost management includes the processes required to ensure that the project is completed within an approved budget.

Project CostingProject Costing

Project CostingProject Costing

Cost Estimating: Developing an approximation or estimate of the costs of the resources needed to complete a project.

Cost Budgeting: Allocating the overall cost estimate to individual work items to establish a baseline for measuring performance.

Cost Control: Controlling changes to the project budget.

Cost Estimating

Project managers must take cost estimates seriously if they want to complete projects within budget constraints.

It is important to know the types of cost estimates, how to prepare cost estimates, and typical problems associated with cost estimates.

Basic Tools and Techniques for Cost Estimates: Analogous or top-down estimates:

Use the actual cost of a previous, similar project as the basis for estimating the cost of the current project.

Bottom-up estimates:

Involve estimating individual work items or activities and summing them to get a project total.

Parametric modeling:

Uses project characteristics (parameters) in a mathematical model to estimate project costs.

Computerized tools:

Tools, such as spreadsheets and project management software, that can make working with different cost estimates and cost estimation tools easier.

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