Study guide
4.1 Resource Planning, Allocation, and Histograms
AACE Planning and Scheduling Professional PSP
Track your progress as you read
Finished sections get a check mark.
1 Chapter 0: Introduction & AACE PSP Exam Structure
0.1 Current AACE PSP Exam, Eligibility, and Certification Facts 0.2 Planning and Scheduling Professional Roles and Competencies 0.3 Cost Engineering and Scheduling Terminology per RP 10S-90
2 Chapter 1: Scope Definition & Planning Fundamentals
1.1 Work Breakdown Structure (WBS) Architecture & RP 33R-15 1.2 Organization & Resource Breakdown Structures (OBS, RBS, RAM) 1.3 Project Planning and Activity-Logic Development 1.4 Contract Requirements and Delivery Constraints 1.5 Stakeholder Identification, Needs, and Plan Review 1.6 Constructability Methods and Value Engineering 1.7 Resource Identification and Project Variables 1.8 Scope, Goals, Project Plan, and Phase Definition 1.9 Cost Breakdown Structure and Cost Estimate Development 1.10 Phase Relationships, Baseline Plan, Forecasts, and Risk/Recovery Planning
3 Chapter 2: Critical Path Method Mechanics & Network Logic
2.1 Activity Definition and Logic Relationships 2.2 Activity Durations, Productivity, and Work Calendars 2.3 Forward and Backward Pass Mathematical Mechanics 2.4 Float Calculations and Critical-Path Identification
4 Chapter 3: Advanced Network Techniques & Schedule Constraints
3.1 Schedule Constraints and Their Impact on Dates and Float 3.2 Advanced Logic Modeling: Ladders and Fragnets 3.3 Schedule Levels of Detail and Schedule Basis Documentation 3.4 Schedule Scope and Schedule Specification 3.5 Breakdown-Structure Relationships and the Cost Estimate Model 3.6 Stakeholder Feedback and Types of Schedules 3.7 Activities, Milestones, Schedule Quality, and Basis Documentation
5 Chapter 4: Resource Management & Leveling
4.1 Resource Planning, Allocation, and Histograms 4.2 Resource Leveling vs. Resource Smoothing 4.3 Cumulative Resource S-Curves & Productivity Tracking
6 Chapter 5: Baseline Management & Schedule Updating
5.1 Baseline Establishment, Forecasts, and Controlled Revision 5.2 Progress Measurement and Data Date Mechanics 5.3 Out-of-Sequence Logic: Progress Override vs. Retained Logic 5.4 Schedule Update Review and Quality Verification per RP 53R-06 5.5 Cost/Resource Management, Schedule Change, and Feedback 5.6 Acceleration and Recovery Scheduling per RP 54R-07 5.7 Control Schedules, Variance Analysis, Forecasts, and Management Summaries
7 Chapter 6: Schedule Risk Analysis & Monte Carlo Simulation
6.1 Schedule Risk Principles, Risk Drivers, and Three-Point Estimates 6.2 Monte Carlo Simulation, Criticality, Correlation, and Merge Effects 6.3 Risk Outputs, Confidence Dates, Sensitivity, and Contingency
8 Chapter 7: Earned Value & Earned Schedule Management
7.1 Earned Value Foundations: PV, EV, AC, and Variances 7.2 Traditional EV Performance Indices & Late-Project Quirks 7.3 Earned Schedule (ES) Theory, SV(t), and SPI(t) 7.4 Independent Schedule Forecasting & IEAC(t)
9 Chapter 8: Forensic Schedule Analysis & Delay Claims
8.1 Delay Classification, Criticality, and Contract Questions 8.2 RP 29R-03 Taxonomy, Data Validation, and Method Selection 8.3 TIA, Windowed Analysis, and Subtractive Models 8.4 Concurrency, Pacing, and Float: Technical Analysis Before Entitlement
10 Chapter 9: Executive Communication & Practical Scenario Applications
9.1 Official PSP Memo Writing Framework 9.2 Structured Technical Problem-Solving for PSP Scenarios 9.3 Current Exam Strategy and Core Calculation Review
4.1 Resource Planning, Allocation, and Histograms
Key Takeaways Explain This Topic AI
AACE classifies project resources into labor (direct craft and indirect supervision), non-labor/equipment (heavy machinery and specialized tools), materials (bulk consumables and engineered tagged items), and subcontract packages.
Resource loading assigns physical labor-hours, equipment capacities, or material quantities directly to CPM schedule activities, whereas cost loading assigns financial expenditures; resource-loaded schedules enable workforce profiling and derived cash flows.
Resource allocation software mechanics are governed by the equation Work = Duration * Units, where setting an activity to Fixed Units, Fixed Duration, or Fixed Work determines how the algorithm adjusts parameters when edits occur.
Resource histograms plot periodic resource demand over time; comparing an early-dates histogram (front-loaded, float intact) with a late-dates histogram (back-loaded, zero float buffer) defines the boundary envelope of staffing requirements.
Staffing profiles naturally follow an empirical bell curve or trapezoidal distribution where peak headcount typically reaches 1.5 to 2.0 times the average headcount, requiring planners to identify driving bottleneck resources and avoid manpower whiplash.
Last updated: October 2026
4.1 Resource Planning, Allocation, and Histograms
AACE Professional Context: An unconstrained Critical Path Method (CPM) schedule is a mathematical model that assumes infinite resource availability. In field reality, projects operate within strict limitations of skilled craft labor, specialized equipment, workspace congestion, and supplier fabrication capacity. According to AACE International cost engineering principles, a schedule that does not account for resource limits represents a high-risk theoretical exercise rather than an executable plan. On the AACE Planning and Scheduling Professional (PSP) examination, candidates are expected to demonstrate complete mastery of resource classifications, resource allocation mechanics, early versus late histogram profiles, peak staffing dynamics, and the identification of driving bottleneck resources.
Resource Classification in Cost Engineering
In Total Cost Management (TCM) and professional project scheduling, a resource is any consumable, deployable, or assignable entity required to execute an activity. AACE classifies project resources into four fundamental categories:
1. Labor Resources
Labor represents human effort expended to execute work packages. In project controls, labor is divided into:
Direct Craft Labor: Skilled and semi-skilled workers who directly alter or assemble physical materials at the workface (e.g., certified pipefitters, structural welders, ironworkers, electricians, boilermakers, equipment operators). Direct labor hours are loaded directly against discrete CPM work activities and are tracked for labor productivity.
Indirect Field Labor: Field management and supervisory personnel who support project execution but do not directly install materials (e.g., project controls engineers, scheduling professionals, safety managers, quality inspectors, superintendents, field survey crews). Indirect labor is typically modeled as Level of Effort (LOE) activities or apportioned as a percentage of direct craft hours.
2. Non-Labor / Equipment Resources
Equipment resources comprise machinery, plant, and specialized tooling necessary to execute construction and fabrication:
Heavy Construction Machinery: Crawler cranes, tower cranes, hydraulic excavators, trenchers, bulldozers, concrete pump trucks, and offshore pipelay vessels.
Specialized Tooling & Testing Rigs: Automated orbital welding machines, post-weld heat treatment (PWHT) rigs, hydrostatic test pumps, and non-destructive testing (NDT) crawlers.
Economic Characteristics: Equipment resources carry substantial mobilization and demobilization costs, daily rental or depreciation rates, and maintenance overhead. Specialized equipment may be capacity-constrained and can become a primary driver of schedule sequence.
3. Material Resources
Materials represent physical substances and fabricated components permanently incorporated into the facility or consumed during construction:
Bulk Materials: Commodities purchased in standard commercial quantities without unique equipment tags (e.g., ready-mix concrete, reinforcing steel rebar, structural steel shapes, conduit, bulk piping, cable tray, gravel fill).
Engineered / Tagged Equipment: Custom-engineered, serialized components manufactured to specific engineering data sheets (e.g., centrifugal compressors, distillation towers, shell-and-tube heat exchangers, high-voltage transformers, distributed control system cabinets).
Scheduling Mechanics: Materials are consumed rather than renewable. Unlike labor or equipment, materials cannot be "leveled" by shifting hours across days. Instead, material availability is enforced through procurement logic chains (engineering submittal → \rightarrow → review/approval → \rightarrow → purchase order → \rightarrow → vendor fabrication → \rightarrow → factory acceptance test → \rightarrow → site delivery).
4. Subcontractor Resources
Subcontractors represent third-party trade organizations executing specialized work packages under fixed-price, unit-rate, or time-and-materials contracts (e.g., refractory lining installation, post-tensioning, environmental remediation, commercial HVAC balancing). Subcontractor resources are evaluated based on contractual interface milestones and daily production commitments.
Resource Loading vs. Cost Loading
A schedule network can be loaded with resources, costs, or both. Understanding the operational distinction between resource loading and cost loading is essential for the PSP exam.
Dimension Resource-Loaded Schedule Cost-Loaded Schedule
Primary Unit of Measure Physical units: Craft Labor-Hours ( M H MH M H ), Crew Headcount, Machine-Hours, Material Quantities ( C Y , L F , T o n CY, LF, Ton C Y , L F , T o n ) Monetary currency: Dollars ($), Euros, or local contract currency
Core Management Focus Workforce leveling, craft availability, equipment utilization, site spatial congestion, crew productivity rates Cash flow forecasting, project financing, progress payment certification, contractual billing (e.g., AIA G702/G703)
Float & Leveling Role Serves as the primary input for Resource Leveling and Resource Smoothing algorithms Costs follow schedule dates; costs do not exert physical resource constraints on task execution
Earned Value Integration Establishes Planned Hours ( P V hours PV_{\text{hours}} P V hours ) and Earned Hours ( E V hours EV_{\text{hours}} E V hours ) for Labor Efficiency and Productivity Index ( P I PI P I ) Establishes Budgeted Cost of Work Scheduled ( P V PV P V ), Budgeted Cost of Work Performed ( E V EV E V ), and Cost Variance ( C V CV C V )
Progress Measurement Physical percent complete based on verified installed quantities or craft work-hours Financial percent complete or earned revenue based on approved schedule of values
In a mature, fully integrated project controls environment, cost loading is derived directly from resource loading :
Direct Activity Cost = ∑ ( Labor Hours × Labor Hourly Rate ) + ∑ ( Equipment Hours × Equipment Rate ) + ∑ ( Material Quantity × Unit Price ) \text{Direct Activity Cost} = \sum (\text{Labor Hours} \times \text{Labor Hourly Rate}) + \sum (\text{Equipment Hours} \times \text{Equipment Rate}) + \sum (\text{Material Quantity} \times \text{Unit Price}) Direct Activity Cost = ∑ ( Labor Hours × Labor Hourly Rate ) + ∑ ( Equipment Hours × Equipment Rate ) + ∑ ( Material Quantity × Unit Price )
Note
A schedule that is only cost-loaded can generate cash flow projections, but it cannot detect craft shortages, crane over-allocations, or spatial congestion at the jobsite. Only a resource-loaded schedule enables operational leveling and productivity analysis.
Resource Allocation Mechanics & Software Equations
When a planner assigns resources to an activity in modern scheduling engines, the software utilizes a governing mathematical relationship linking effort, elapsed time, and resource concentration:
Work (Labor-Hours) = Duration (Working Days) × Units per Time Period (Hours/Day) \text{Work (Labor-Hours)} = \text{Duration (Working Days)} \times \text{Units per Time Period (Hours/Day)} Work (Labor-Hours) = Duration (Working Days) × Units per Time Period (Hours/Day)
Total Labor-Hours = D × ( N crew × H shift ) \text{Total Labor-Hours} = D \times (N_{\text{crew}} \times H_{\text{shift}}) Total Labor-Hours = D × ( N crew × H shift )
Where:
- D D D = Activity duration in working days
- N crew N_{\text{crew}} N crew = Number of workers assigned
- H shift H_{\text{shift}} H shift = Standard working hours per shift (e.g., 8 hours/day)
- The Three Allocation Calculation Types
When any one of these three variables is edited, the scheduling software must hold one variable constant and recalculate the third. Software engines classify activities into three discrete calculation types: [Work = Duration × Units]
- │
- ┌─────────────────────────────────┼─────────────────────────────────┐
- ▼ ▼ ▼
- [Fixed Units] [Fixed Duration] [Fixed Work]
- (Resource Rate Locked) (Elapsed Time Locked) (Effort / MH Locked)
Editing Duration changes Work. Editing Work changes Units. Editing Units changes Duration.
Editing Work changes Duration. Editing Units changes Work. Editing Duration changes Units.
Fixed Units (Resource-Driven): The resource allocation rate (e.g., 4 pipefitters, or 32 hours/day) remains constant. If the planner increases the activity duration from 5 days to 10 days, the software automatically doubles the total Work from 160 hours to 320 hours. This setting is standard when crew sizes are rigid and cannot be altered.
Fixed Duration (Time-Driven): The activity duration is invariant (e.g., an 8-day environmental curing period, or a fixed regulatory inspection window). If the planner increases the required work hours from 80 to 160 hours, the software increases the resource assignment from 10 hours/day to 20 hours/day (requiring additional crew). Under that selected fixed-duration calculation type, changing resource units recalculates work while duration remains fixed; other tools and settings may behave differently.
Fixed Work (Effort-Driven): The total labor effort (e.g., 400 welder-hours) is fixed by physical quantity take-offs. If the planner increases the assigned crew from 2 welders (16 hours/day) to 5 welders (40 hours/day), the software automatically compresses the activity duration:
New Duration = 400 hours 5 welders × 8 hours/day = 400 40 = 10 working days ( down from 25 days ) \text{New Duration} = \frac{400\text{ hours}}{5\text{ welders} \times 8\text{ hours/day}} = \frac{400}{40} = 10\text{ working days} \quad (\text{down from } 25\text{ days}) New Duration = 5 welders × 8 hours/day 400 hours = 40 400 = 10 working days ( down from 25 days )
Diminishing Marginal Returns & Spatial Crowding (Brooks' Law in Construction)
While the Fixed Work formula implies that doubling crew size cuts duration in half, practical field construction is severely constrained by physical laws:
Spatial Trade Stacking: Confined industrial spaces (e.g., pipe racks, boiler boxes, offshore modules) have finite physical square footage. A standard cost engineering heuristic dictates that a direct craft worker requires approximately 150 to 200 square feet (14 to 19 square meters) of unobstructed work area to maintain 100% productive efficiency.
Congestion Losses: When crew density exceeds threshold limits, workers interfere with each other, wait for shared tools, create safety hazards, and experience severe productivity dilution.
Brooks' Law Application: Originally formulated for software engineering ( "Adding manpower to a late project makes it later" ), the principle applies equally to capital construction: introducing large, uncoordinated crews late in the schedule creates supervisory dilution, training overhead, and trade congestion that frequently lengthens rather than compresses remaining duration.
Resource Histograms: Construction and Analysis
A resource histogram is a columnar bar chart displaying the time-phased demand for a specific resource, trade craft, or equipment type across discrete planning intervals (days, weeks, or months).
Early Dates vs. Late Dates Histograms
A fundamental capability tested on the PSP exam is the comparative evaluation of Early Dates Histograms versus Late Dates Histograms .
Analytical Dimension Early Dates Histogram (ES Profile) Late Dates Histogram (LS Profile)
Activity Timing Assumption Every schedule activity starts on its Early Start (ES) and finishes on its Early Finish (EF) . Every schedule activity is delayed to its Late Start (LS) and finishes on its Late Finish (LF) .
Staffing Profile Shape Heavily Front-Loaded : Resource demand peaks early during initial phases of work. Severely Back-Loaded : Resource demand peaks late, concentrating massive effort near the completion milestone.
Schedule Buffer / Risk Maximum Schedule Protection : Preserves 100% of project float. Delays on non-critical tasks do not immediately threaten project completion. Zero Schedule Protection : All total float is completely consumed ( T F = 0 TF = 0 TF = 0 ). Every activity becomes critical. The slightest delay immediately extends project finish.
Cash & Mobilization Impact Demands immediate, rapid cash outlay and aggressive initial workforce ramp-up. Postpones cash expenditures and financing costs to the latest allowable dates.
Operational Defensibility Highly defensible execution target; provides buffer for field troubleshooting. Unrealistic and operationally dangerous; any labor disruption causes systemic default. [CRAFT WORKERS]
- ▲
- 80 │ ┌───┐
- │ ┌┤ ├┐ [EARLY DATES HISTOGRAM]
- 60 │ ┌┤│ │├┐ - Front-loaded peak
- │ ┌┤││ ││├┐ - Preserves float buffer
- 40 │ ┌┤│││ │││├┐
- │ ┌┤││││ ││││├┐
- 20 │ ┌┤│││││ │││││├┐
- └──┴┴┴┴┴┴┴───┴┴┴┴┴┴┴────────────────────────► [TIME]
- 80 │ ┌───┐
- │ ┌┤ ├┐ [LATE DATES HISTOGRAM]
- 60 │ ┌┤│ │├┐ - Severe back-loaded peak
- │ ┌┤││ ││├ - Zero float remaining
- 40 │ ┌┤│││ │││ - Extreme operational risk
- │ ┌┤││││ │││
- 20 │ ┌┤│││││ │││
- └──┴────────────────┴┴┴┴┴┴┴───┴┴┴───────────► [TIME]
Warning
Exam Trap Alert: An exam question may describe a contractor presenting a schedule where staffing peaks in the final 20% of the project timeline to delay financing costs. PSP candidates must identify this as a Late Dates Staffing Trap . Planning flexible work at late dates consumes operational buffer; subsequent disruption may affect successors or completion depending on the remaining paths and float.
Staffing Profiles: Ramp-Up, Peak, and Ramp-Down Mechanics
Empirical project management studies across decades of engineering and construction projects establish that direct craft labor demand does not follow a rectangular or uniform distribution. Instead, successful capital projects exhibit an empirical bell curve or trapezoidal distribution . Headcount
- ▲
- │ PEAK PLATEAU (Steady-State)
- │ ┌─────────────────┐
- │ /│ │\
- │ / │ │ \
- │ RAMP-UP / │ │ \ RAMP-DOWN
- │ / │ │ \ (Demobilization)
- │ / │ │ \
- │ / │ │ \
- └────────┴──────┴─────────────────┴──────┴────────► Time
- Start 30% 70% Finish
- The Three Project Staffing Phases
Ramp-Up Phase (0% to ~30% of Duration): Controlled mobilization. Activities focus on civil earthworks, underground utilities, foundation piling, and structural concrete. Headcount grows progressively. Cost engineering best practice recommends a maximum ramp-up rate of 10% to 15% workforce expansion per month . More rapid onboarding overwhelms field supervision, badging logistics, safety orientations, and material distribution.
Peak Plateau / Steady-State Phase (~30% to ~70% of Duration): The period of maximum site production. Multi-discipline trades (structural steel, heavy piping, electrical raceways, mechanical equipment installation) operate concurrently across multiple work areas. Empirical data shows that 40% to 50% of all project labor-hours are expended during this middle 40% window.
Ramp-Down / Demobilization Phase (~70% to 100% of Duration): Controlled, phased release of craft labor as physical installations achieve mechanical completion. Remaining work shifts to electrical terminations, hydrotesting, chemical cleaning, pre-commissioning, and punch-list resolution.
The Peak-to-Average Workforce Ratio
A vital diagnostic metric used by project controls managers to evaluate the feasibility of a resource histogram is the Peak-to-Average Workforce Ratio :
Peak-to-Average Ratio = N peak N ˉ avg = Maximum Periodic Headcount Total Project Labor Hours / Total Project Working Hours \text{Peak-to-Average Ratio} = \frac{N_{\text{peak}}}{\bar{N}_{\text{avg}}} = \frac{\text{Maximum Periodic Headcount}}{\text{Total Project Labor Hours} / \text{Total Project Working Hours}} Peak-to-Average Ratio = N ˉ avg N peak = Total Project Labor Hours / Total Project Working Hours Maximum Periodic Headcount
Benchmark Standard: For well-planned industrial and infrastructure projects, the peak-to-average ratio typically falls between 1.5 and 2.0 .
Severe Volatility Alert: If the ratio exceeds 2.5 , the schedule contains an extreme staffing spike that is rarely achievable in local labor markets. It indicates artificial concurrency and poor leveling.
Flat Profile Flaw: If the ratio is below 1.2 , the schedule artificially restricts work, needlessly lengthening project duration.
Manpower Whiplash (Roller Coaster Demand)
A poorly scheduled project often exhibits "manpower whiplash"—alternating between hiring surges and sudden lay-offs across consecutive weeks (e.g., needing 40 welders in Week 12, dropping to 10 in Week 14, and demanding 55 in Week 16). In the field, craft labor released from a site immediately seeks employment with competitors; they cannot be re-hired on short notice. Manpower whiplash causes severe turnover costs, lost site familiarity, low trade morale, and catastrophic safety incident spikes.
- Evaluating Resource Over-Allocation & Driving Resources
- Identifying Over-Allocation Thresholds
An over-allocation occurs in any planning interval t t t where total aggregate resource demand D t D_t D t exceeds the maximum available resource limit L t L_t L t :
Over-Allocation t = D t − L t ( where D t > L t ) \text{Over-Allocation}_t = D_t - L_t \quad (\text{where } D_t > L_t) Over-Allocation t = D t − L t ( where D t > L t )
To identify over-allocations, the project scheduler must aggregate daily demand across all concurrently executing activities for each individual resource code.
Identifying the Driving Resource
When multiple trades and equipment items are loaded into a schedule, one specific resource constraint typically governs the pace of the overall project. This is the Driving Resource (or Bottleneck Resource):
Definition: The single resource pool whose availability ceiling exerts the greatest constraint on project throughput and network float.
Common Driving Resources: Specialized crawler cranes (e.g., 500-ton capacity for heavy vessel lifts), certified alloy orbital pipe welders, licensed high-voltage electricians, or cleanroom installation specialists.
Analytical Method: A resource whose utilization remains at or near 100% of capacity throughout the project execution window, and whose unavailability forces predecessor-successor delays, is the driving resource.
Worked Example: Direct Craft Demand and Over-Allocation Calculation
Consider an industrial refinery upgrade project during a planned unit turnaround. The schedule includes three concurrent mechanical activities executing between Day 1 and Day 10. The contractor has an absolute local labor pool limit of 12 Certified Alloy Welders .
Activity Loading Parameters
Activity A (Furnace Tube Replacement): Duration = 6 days (Days 1–6). Assigned Welders = 6 welders/day.
Activity B (High-Pressure Steam Header Tie-Ins): Duration = 5 days (Days 4–8). Assigned Welders = 8 welders/day.
Activity C (Reactor Nozzle Overlay Welding): Duration = 4 days (Days 5–8). Assigned Welders = 4 welders/day.
Step-by-Step Daily Demand Aggregation Table
Day Act A Demand Act B Demand Act C Demand Total Daily Demand ( D t D_t D t ) Available Limit ( L t L_t L t ) Net Variance ( L t − D t L_t - D_t L t − D t ) Status
- Day 1 6 0 0 6 12 +6 Compliant
- Day 2 6 0 0 6 12 +6 Compliant
- Day 3 6 0 0 6 12 +6 Compliant
- Day 4 6 8 0 14 12 -2 OVER-ALLOCATED
- Day 5 6 8 4 18 12 -6 CRITICAL OVER-ALLOCATION
- Day 6 6 8 4 18 12 -6 CRITICAL OVER-ALLOCATION
- Day 7 0 8 4 12 12 0 At Capacity
- Day 8 0 8 4 12 12 0 At Capacity
- Day 9 0 0 0 0 12 +12 Zero Demand
- Day 10 0 0 0 0 12 +12 Zero Demand
- Mathematical Evaluation of the Histogram
Peak Demand: 18 certified welders on Day 5 and Day 6.
Over-Allocation Magnitude: Demand exceeds supply by 6 welders (a 50% over-allocation beyond the 12-welder ceiling) on Days 5 and 6, and by 2 welders on Day 4.
Total Welder-Days Required: ( 3 × 6 ) + ( 1 × 14 ) + ( 2 × 18 ) + ( 2 × 12 ) = 18 + 14 + 36 + 24 = 92 welder-days (3 \times 6) + (1 \times 14) + (2 \times 18) + (2 \times 12) = 18 + 14 + 36 + 24 = 92\text{ welder-days} ( 3 × 6 ) + ( 1 × 14 ) + ( 2 × 18 ) + ( 2 × 12 ) = 18 + 14 + 36 + 24 = 92 welder-days .
Average Headcount Over 8 Active Days: N ˉ = 92 / 8 = 11.5 welders \bar{N} = 92 / 8 = 11.5\text{ welders} N ˉ = 92/8 = 11.5 welders .
Peak-to-Average Ratio: 18 / 11.5 = 1.57 18 / 11.5 = 1.57 18/11.5 = 1.57 (the ratio itself is reasonable, but the 18-welder peak violates the physical ceiling).
Conclusion: This schedule cannot be executed as planned. If left unleveled, field work will stall on Day 4, leading to uncoordinated delays and productivity degradation.