Resource Allocation and Resource Leveling - Construction Project Scheduling and Control - page 151

Tip Box 6.6

While we never apply the “just-in-time” or “inventory buffer” approach purely, we swing
between the two theories. However, we lean more toward one of the two theories,
depending on project location and circumstances.

Interesting Comparison

The following table summarizes some comparisons among the three main resources:
labor, equipment, and materials. Keep in mind that elements of some of these com-
parisons vary in countries outside the United States, such as insurance and bonds.

Comparison Category Labor Equipment Materials

No a Cost money whenver in the possesion of the contractor Yes Yes

Subject to productivity fluctuations Yes Yes No

Add waste allowance No No Yes

Overtime cost > normal

≤ normal

NA

Yes b Yes b Yes b Add taxes to cost

Add transport/delivery cost No Yes Yes

Initial cost can be depreciated/amortized over useful life No Yes No

Add Operating Cost No Yes No

Add fringe benefits to cost Yes No No

May need resource leveling Yes Yes No

May need safe storage No Yes Yes

May be subject to damage, theft, or vandalism
Protected by Builder's Risk Insurance No Yes Yes

May be subject to death, injury, and illness
Protected by Workers Compensation Insurance Yes No No

a The cost of storage and frozen capital is ignored.
b Taxes and fees differ among categories, depending on local laws.

CHAPTER 6 EXERCISES
1. In the context of construction scheduling, what do we mean by resources ?
2. What is resource allocation ?
3. What is resource leveling ?
4. Why should you level resources in construction projects?
5. Do all resources have to be leveled? Why or why not?
6. Discuss resource leveling in a multiproject environment.
7. Can you level resources in a multiproject environment? If so, what are the factors
that will influence your decision?