Effects of resource allocation policies for reducing project durations: a systems modelling approach

Minimizing duration is critical to success in many development projects. Resource allocation policies during such projects determine the fractions of resources that are to be assigned to constituent tasks. The choice of allocation policy can strongly influence project durations. But policies for reduced project duration are difficult to design and implement because of closed loop flows of work that generate dynamic demand patterns and delays in shifting resources among activities. Resource demand estimates and resource adjustment times are two policy features that managers can readily alter to influence project durations. These features are used to describe allocation policies in a relatively simple project model. Myopic and foresighted policies are distinguished by their use (or lack thereof) of rework and multiple backlogs in allocation. Optimal policies under perfect and limited managerial control are described by testing myopic and foresighted policies across a range of project complexities and adjustment times under deterministic and uncertain conditions. Counter‐intuitive results from this analysis indicate that minimum resource allocation delay does not produce minimum durations, and increasing uncertainty decreases durations under certain conditions. The model is used to explain these results. Managerial implications and future research topics are discussed.