Resource Leveling

In the example above, we noted that the project began with the heavy use of resource A, used smaller amounts during the middle of the project, and then continued with rising usage during the project's latter stages. Usage of B started low and rose throughout the project's life. Large fluctuations in the required loads for various resources are a normal occurrence—and are undesirable from the PM's point of view. Resource leveling aims to minimize the period-by-period variations in resource loading by shifting tasks within their slack allowances. The purpose is to create a smoother distribution of resource usage.

There are several advantages to smoother resource usage. First, much less hands-on management is required if the use of a given resource is nearly constant over its period of use. The PM can arrange to have the resource available when needed, can have the supplier furnish constant amounts, and can arrange for a backup supplier if advisable. Moreover, the PM can do this with little error. Second, if resource usage is level, the PM may be able to use a "just-in-time" inventory policy without much worry that the quantity delivered will be wrong. If the resource being leveled is people, leveling improves morale and results in fewer problems in the personnel and payroll offices because of increasing and decreasing labor levels.

Not only are there managerial implications to resource leveling, there are also important cost implications. 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 basic procedure for resource leveling is straightforward. For example, consider the simple network shown in Figure 9-6a. The activity time is shown above the arc, and resource usage (one resource, workers) is in parentheses below the arc Activities a, b, and c follow event 1, and all must precede event 4. Activity a requires two workers and takes two days, b requires two workers and takes three days, and c needs four workers and five days. (We addressed the problem of trade-offs between labor and activity time in the first section of this chapter.) if all these tasks are begun on their early start dates, the resource loading diagram appears as shown in Figure 9-6b, steps of decreasing labor demand varying from eight workers to four workers. If, however, task b is delayed for two days, the full length of its slack in this particular case, the resource loading diagram is smoothed, as shown in Figure 9-6c

Figure 9-6a: The network. 6: Before resource leveling, c: After resource leveling.

2 3 Days

Figure 9-6a: The network. 6: Before resource leveling, c: After resource leveling.

The same result would have occurred if b were started as early as possible and task a were delayed until day 3.

Resource leveling is a procedure that can be used for almost all projects, whether or not resources are constrained. If the network is not too large and there are only a few resources, the leveling process can be done manually. For larger networks and multiple resources, resource leveling becomes extremely complex, far be-

yond the power of manual solutions. Fortunately, a number of computer programs can handle most leveling problems efficiently (discussed in Chapter 10). <

Reconsider the load diagrams of Figures 9-5a and b. Assume it is desired to smooth the loading of resource B, which is particularly jagged. Both activities e and f can be delayed (e has five days of slack and f has nine). If we delay both for one day, we remove the peak on day 20 without increasing any of the other peaks (see Figure 9-7b). If we do this, however, it also alters the use of resource A and deepens the "valley" on day 20 (see Figure 9-7a). If we further delay f another seven days M order to level the use of A toward the end of the project, we would deepen the valley between days 20 and 24, and the resultant use of A would be as shown by the dotted lines on Figure 9-7a. Activity f would begin on day 29 (and would become critil cal). The effect on the usage of B is easy to see (Figure 9-7b). The change wouW

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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