Improving business project performance by increasing the effectiveness of resource capacity and allocation policies

Resource capacity plans and allocation policies have a significant impact on the performance of business projects. This is particularly true in situations where multiple projects compete concurrently for scarce resources. Project management tools have limited ability to analyze the impact of resource allocation policies in systems with variability. Simulation tools are designed for this type of analysis. This paper focuses on simulation analyses of the relation between changes to resource capacity, resource allocation policies, variability, and project performance. Scenarios are simulated for different combinations of changes to resource quantities, work schedule durations, allocation policies, and task duration variability. Each scenario´s performance is measured based on total project cycle-times and costs. The results demonstrate how increasing the flexibility of resource allocation policies can increase the effectiveness of resource capacity and significantly reduce project cycle-times without increasing project costs.