Every one knows that Microsoft Project caters to allocating resources to activities and most people allocate persons to activities. Everyone also knows that resource usage and over-allocation are given by Microsoft Project. However, Microsoft Project does not automatically adjust the schedule if resources are over-allocated. We need to do that using the facility provided by Microsoft Project by choosing Tools > Resource Leveling.
This is very easy to use and Microsoft Project adjusts the schedule within the framework of available resources and minimizes resource over-allocation. If this step is not performed, the resulting schedule may not be accurate reflect the data you have input, in cases of over-allocation of resources.
A resource may not be over-allocated in a single project but may be allocated to other projects and when all allocations are cumulatively taken into consideration, that resource may be over-allocated. Microsoft Project can detect this, if all those projects are scheduled using Microsoft Project.