resource management i

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RESOURCE MANAGEMNT

Activity-Based ResourceAssignment (ABRA)



INTRODUCTION

In order to meet the proposed schedule, we

have to know if the resources that we need areavailable

We need to determine the impact of resource

availability on project schedule

Ideas of when the resource would be neededfor each activity is known from the CPM

We need to determine areas of resourceshortages and the impact of such shortages willhave in delaying the schedule



INTRODUCTION

Organization with multiple projects is inabsolute need to maintain an up-to-dateresource availability database by the

functional manager TPC shows how assigning resources to

project activities can benefits the

organization, the PM and the functionalmanagers



ABRA AND ABC

Activity-based resource assignments(ABRA): It is the first step in resourcescheduling with an objective to determinewhat resources will be needed for eachactivity

Activity-based costing (ABC): It is thefoundation for an important technique incost accounting where the cost of doingwork must be assembled and tracked atthe level of each activity



ABRA ITEMS

What resourcesare needed?

How much ofeach resource is

needed in orderto complete itwithin itsestimated

durations? When will each

resource beneeded?



STEPS

Assign resources at the lower level of theWBS

Determine how much of these resources

would be needed to complete of theseactivities in the estimated amount of time

Match them against the resources within

the organization which is located in thedepartments that comprise the OBS

The OBS should contain the cost

information about each resource



ABC ITEMS

Fairly accurate budget for each resource

being used, for each activity and for thewhole project, for a comparisons anddecision making both within a project and

across projects A schedule that shows how the cost of a

resource changes over time

A schedule that shows the availability of aresource changes over time, allows us tosee what and when resources are available



RESOURCE LIBRARY

Resource database incorporated in almost allthe project management software packages

Time consuming to be regularly maintained

Their target is to justify additional resources bycontrasting the cost of these resources versusthe impact of resource shortages on project

schedules and EMV Without resource library, this is all but

impossible



PROJECT BUDGETS

As the resources areassigned, the costdata come with them

Accurate costingrequires all types ofresources beassigned to activities

The budget for eachactivity is therefore,will be determined



PROJECT BUDGETS

And so wecansummarizethe budget

numbers allthe way tothe top forthe entireproject



CALCULATING THEPROJECT DIPP

The results of cost analysis is a projectbudget of $3,876,783 which, if it’scompleted in 30 weeks, has an EMV of$10 million. Therefore,

DIPP = EMV / ETC

= $10,000,000 / $3,876,783 = 2.58

The current schedule claims 34 weeks atan EMV of $2 million. Therefore,

DIPP = $2,000,000 / $3,876,783 = 0.52



ALTERNATIVES

Cut cost drastically

Reduce the duration

Increase scope to increase expectedvalue

Cancel the project



ANALYSING ANDIMPLEMENTING THE DRED

DRED give the PM a sense of what might be

the effect of adding resources to an activity Adding 50% more resources to an activity with

a duration estimate of 12w and DRED of 10 w

might reduce activity duration to 11w We have to find out whether such resource

would be available and the cost and weight ofthe additional resource

Therefore, DRED comes with a costcomponent determining the reason forimplementing such factor



DRED COMPUTATION

DRED budget = 2 (activity budget) * (DRED / by

duration) For the activity, Develop advertising, with 6w

duration, activity budget of $101,250 and DRED5w DRED budget = 2 ($101,250) * (5 / 6) =$168.075

DRED cost = DRED budget – Activity Budget =$168.075 - $101,250 = $66,825

Doubling the cost on Develop advertising willcost $66,825 and it is off the critical path withDRAG of zero, but if it was on the critical paththe 1w saved at $2 million would be easily

worth the cost



DRED COMPUTATION

The biggestdifficulties is indetermining wherethe additional

resources will do: Any good

The most good

This is precisely the analysis that the TPCmetrics DRAG, DRAG cost, DRED and DRED

cost are designed to facilitate



DECISION MAKING

TPC provides PM with data on which project

decisions can be based DRED data needs to be applied to the actual

details of the project schedule

A conference with activity managers of all theresource-elastic critical path activities should takeplace

PM start displaying the current network scheduleshowing the EMV and DRED potential inimproving the current scenario



DECISION MAKING



DECISION MAKING

Time might be saved on the critical

activities path via: Adding resource realizing resource elasticity and

activity DRAG on critical path

Changing relationships on and off critical activities Reducing lag on critical path

The saved time will have the following

impact: Increasing the project EMV

Adding contingency time or managementreserves in case of variance



DECISION MAKING

Two separate critical paths emerged,the DRAG of almost all the activities is zero,

and the total float have also shrunk



DECISION MAKING

Further compressing made after discussion with activity

manager of the compressed activity



DECISION MAKING

Total budget increasedby $160,000 to$4,036,783

while the projected

duration has gone from34w to 28w and the EMV from $2

million to $10.8 million.

The DIPP analysis nowlooks much healthier:DIPP = $10.800,000 / $4,036,783 = 2.68

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