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I have 8 tasks all assigned to the same resource each with 2hrs duration per task, the resource has default schedule which looks like it's 8 hours/day, and there are no finish start constraints on the tasks.

They are all sub tasks of a summary task, and I expected it to make the summary task show that it would take 2 days. Instead it over allocated the one resource scheduling all 16 hours on a single day and saying it'd be done in 0.25 days. Why does it do this?

I am pretty new to ms project, but I thought the whole point of assigning resources and durations to tasks was so that it could calculate durations based on that.

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You just indent the task to make it a subtask. Very much like an outline. You can either use Alt+Shift+Right Arrow, or there is a Green Arrow icon on the toolbar that says "Indent" when you mouse over. –  AaronLS Jul 26 '11 at 21:38
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As I mentioned, there should be no date constraints, which are added anytime someone manually selects a start of finish date. The easy way to get rid of thse is to click and drag a big rectangle on the start and finish dates columns down covering all he tasks, then hit Delete on your keyboard. There will still be Start/Finish dates displayed, but now they will all be calculated.

Now what I figured out to completely resolve my problem, was to use the Tools->Level resources option. This will spread the hours out across multiple days, instead of putting them all on one day, and thus will update the start/finish dates appropriately. This seems to work well, but of course requires that you've entered durations and resources.

The other option is to make heavy use of Predecessors so that the tasks occur sequentially, but I don't really like this, although you can still use predecessors in combination with resource levelling if you know that there is really a precedence.

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