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FA - Chapter 8

BUSI 2550

11/05/2018

Scheduling Resources and Costs

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Resource and cost scheduling complete final two planning tasks to
form project master plan
Uses resource schedule to assign time-phased costs which provide
project budget baseline

Resource Scheduling Problem
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If resources are adequate but demand varies over project life, can outsource resource
demand by delaying noncritical activities (using slack) – lowers peak demand, increase res
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o Time flexible, resources fixed
o If resources inadequate, can delay project

Resource Allocation Methods
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Limiting Assumptions:

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FA - Chapter 8

BUSI 2550

o

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11/05/2018

1 – no splitting activities – activity cannot be started, stopped for a period of time then
finish later
o 2 – level of resources used for an activity cannot be changed
Risk Assumptions:
o Activities with most slack pose least risk
o Reduction of flexibility does not increase risk
o Nature of activity (easy, complex) doesn’t increases risk
Time-Constrained projects (smoothing resource demand)
o Leveling delays noncritical activities by using positive slack to
reduce peak demand
o Advantages:
 Peak demands reduced
 Number of resources reduced
 Fluctuations in demand minimized
o Disadvantages:
 Loss of flexibility from reducing slack
 Increases in the criticality of all activities
o Use activities with most slack to level resources
Resource-Constrained projects (parallel method)
o Heuristics – allocate resources to activities to minimize
project delays
o Parallel method applies heuristics and prioritizes activities using the following below
o Activities are leveled using heuristics:
 1 – Minimum slack
 2 – Least duration
 3 – lowest ID number

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FA - Chapter 8

BUSI 2550

11/05/2018

Computer Demonstration of Resource-Constrained Scheduling
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Software does NOT “manage” project, it is a tool to view project perspectives and conditions
First try leveling within slack to preserve original finish date
Next option is leveling outside of slack applying scheduling heuristics
Resource constrained scheduling impacts
o Reduces slack
o Reduces flexibility by using slack to minimize delay
o Increase number of critical path and near-critical path activities
o Scheduling complexity increased due to added resource constraints to technical
constraints

Splitting Activities
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Splitting – work on one activity is interrupted and its resource(s) are used for another activity for
a period of time, then reassigned or original activity
o Scheduling technique to increase resource utilization and get a better project schedule
AVOID using splitting unless casts are small or there is an alternative for resolving resource
problem

Benefits of Scheduling Resources
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Creating resource schedule before project start leaves time for considering reasonable
alternatives
Provides info needed to prepare time-phased work package budgets with dates
Provide quick means for PM to gauge impacts of events such as turnover, equip
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Companies may internally
manage core projects and outsource noncritical projects

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FA - Chapter 8

BUSI 2550

11/05/2018

Using Resource Schedule to Develop a Project Cost Baseline
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Using project schedule, we can time-phase work packages and assign to respective activities to
develop budget schedule
Time-phased budget baseline – cost baseline derived from WBS and project schedule
Different from normal systems that use planned funds and actual costs which don’t accurately
show how much work was completed for money spent, time-phasing cost matches the project
schedule and provides reliable information
Creating time-phased budget baseline
o As WBS and OBS are integrated, work package budgets
and total cost is present
o Total cost at each intersection = cost/control account
o Sum of all cost accounts in a column = total costs for
deliverable
o Sum of all cost accounts in a row = total costs for
organizational unit responsible for work
o Time-phasing work package critical step of creating
budget baseline
 If activity has more than one work package, they
are consolidated into one activity 
o these time-phased budgets for work packages are
moved to project schedule
o these budget allocations create cost baseline (also called
Planned Value – PV)
o Planned Value – planned time-phased baseline of value
of work scheduled

Time-phased cost baseline example 
These baselines are used to compare planned
schedule/costs using integrative system called
earned value

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