Ch3 proj.mgt
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Project Management
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Definition of Project Management Work Breakdown Structure Project Control Charts Structuring Projects Critical Path Scheduling
OBJECTIVES
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Project is a series of related jobs usually directed towards some major output and requiring a significant period of time to perform
Project Management are the management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project
Project Management Defined
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Introduction to Project Management
Definition of Project Management– A project can be defined as a group of tasks – which helps in
achieving an objective – A Project : undertaken to solve a problem.– Project Management – the process of planning, directing and
controlling resources to meet the technical, cost and time considerations of a project.
– Project Management – as a Conversion Process.
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The Definition of a “PROJECT”
• Purpose – Usually a one-time activity with a well-defined set of desired end result.
• Life Cycle- From a slow beginning they progress to a buildup of size, then peak, finally terminate.
• Interdependencies- Projects always interact with the parent organization’s standard, ongoing operations.
• Uniqueness - Every Project has some elements that are unique. (No two Construction or R & D projects are precisely alike.)
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Project Vs. Routine Activities
Project is a one time activity It involves large investments No revenue till the project is completed High degree & Wide variety of skills are used. Involves experts from various divisions of the company,
consultants & a number of contractors. A systematic approach to problem solving – special
techniques used. Usage of special purpose equipments – in some cases Deals with planning, scheduling, controlling simuttaneously
with the objective of timely completion of the project.
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Structuring Projects / Pure Project: Advantages
Pure ProjectA pure project is where a self-contained team works full-time on the project
The project manager has full authority over the project
Team members report to one boss Shortened communication lines Team pride, motivation, and commitment
are high
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Structuring Projects / Pure Project: Disadvantages
Duplication of resources Organizational goals and policies
are ignored Lack of technology transfer Team members have no functional
area "home"
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Functional Project
President
Research andDevelopment
Engineering Manufacturing
ProjectA
ProjectB
ProjectC
ProjectD
ProjectE
ProjectF
ProjectG
ProjectH
ProjectI
A functional project is housed within a functional division
Example, Project “B” is in the functional area of Research and Development.
Example, Project “B” is in the functional area of Research and Development.
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Structuring Projects Functional Project: Advantages
A team member can work on several projects
Technical expertise is maintained within the functional area
The functional area is a “home” after the project is completed
Critical mass of specialized knowledge
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Structuring Projects Functional Project: Disadvantages
Aspects of the project that are not directly related to the functional area get short-changed
Motivation of team members is often weak
Needs of the client are secondary and are responded to slowly
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Matrix Project / Organisation Structure
President
Research andDevelopment
Engineering Manufacturing Marketing
ManagerProject A
ManagerProject B
ManagerProject C
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Structuring Projects / Matrix: Advantages
Enhanced communications between functional areas
Pinpointed responsibility
Duplication of resources is minimized
Functional “home” for team members
Policies of the parent organization are followed
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Structuring Projects /Matrix: Disadvantages
Too many bosses
Depends on project manager’s negotiating skills
Potential for sub-optimization
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Gantt Chart
Activity 1Activity 2Activity 3Activity 4Activity 5Activity 6
Time
Vertical Axis: Always Activities or Jobs
Vertical Axis: Always Activities or Jobs
Horizontal Axis: Always TimeHorizontal Axis: Always Time
Horizontal bars used to denote length of time for each activity or job.
Horizontal bars used to denote length of time for each activity or job.
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Work Breakdown Structure
Program
Project 1 Project 2
Task 1.1
Subtask 1.1.1
Work Package 1.1.1.1
Level
1
2
3
4
Task 1.2
Subtask 1.1.2
Work Package 1.1.1.2
A work breakdown structure defines the hierarchy of project tasks, subtasks, and work packages
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Network Diagrams
1/2/3/4/5 are EventsA/B/C/D/E are Activities.
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Network Diagrams
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Network-Planning Models
A project is made up of a sequence of activities that
form a network representing a project
The path taking longest time through this network of
activities is called the “critical path”
The critical path provides a wide range of scheduling
information useful in managing a project
Critical Path Method (CPM) helps to identify the
critical path(s) in the project networks
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Prerequisites for Critical Path Methodology
A project must have:
well-defined jobs or tasks whose completion marks the end of the project;
independent jobs or tasks;
and tasks that follow a given sequence.
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Types of Critical Path Methods
CPM with a Single Time Estimate– Used when activity times are known with certainty– Used to determine timing estimates for the project,
each activity in the project, and slack time for activities
CPM with Three Activity Time Estimates– Used when activity times are uncertain – Used to obtain the same information as the Single
Time Estimate model and probability information Time-Cost Models
– Used when cost trade-off information is a major consideration in planning
– Used to determine the least cost in reducing total project time
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Steps in the CPM with Single Time Estimate
1. Activity Identification 2. Activity Sequencing and Network
Construction 3. Determine the critical path
– From the critical path all of the project and activity timing information can be obtained
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CPM with Single Time Estimate
Consider the following consulting project:
Activity Designation Immed. Pred. Time (Weeks)Assess customer's needs A None 2Write and submit proposal B A 1Obtain approval C B 1Develop service vision and goals D C 2Train employees E C 5Quality improvement pilot groups F D, E 5Write assessment report G F 1
Develop a critical path diagram and determine the duration of the critical path and slack times for all activities.
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First draw the network
A(2) B(1) C(1)
D(2)
E(5)
F(5) G(1)
A None 2
B A 1
C B 1
D C 2
E C 5
F D,E 5
G F 1
Act. Imed. Pred. Time
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Determine early starts and early finish times
ES=9EF=14
ES=14EF=15
ES=0EF=2
ES=2EF=3
ES=3EF=4
ES=4EF=9
ES=4EF=6
A(2) B(1) C(1)
D(2)
E(5)
F(5) G(1)
Hint: Start with ES=0 and go forward in the network from A to G.
Hint: Start with ES=0 and go forward in the network from A to G.
26Determine late starts and
late finish times
ES=9EF=14
ES=14EF=15
ES=0EF=2
ES=2EF=3
ES=3EF=4
ES=4EF=9
ES=4EF=6
A(2) B(1) C(1)
D(2)
E(5)
F(5) G(1)
LS=14LF=15
LS=9LF=14
LS=4LF=9
LS=7LF=9
LS=3LF=4
LS=2LF=3
LS=0LF=2
Hint: Start with LF=15 or the total time of the project and go backward in the network from G to A.
Hint: Start with LF=15 or the total time of the project and go backward in the network from G to A.
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Critical Path & Slack
ES=9EF=14
ES=14EF=15
ES=0EF=2
ES=2EF=3
ES=3EF=4
ES=4EF=9
ES=4EF=6
A(2) B(1) C(1)
D(2)
E(5)
F(5) G(1)
LS=14LF=15
LS=9LF=14
LS=4LF=9
LS=7LF=9
LS=3LF=4
LS=2LF=3
LS=0LF=2
Duration=15 weeks
Slack=(7-4)=(9-6)= 3 Wks
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Program Evaluation & Review Technique (PERT)
PERT is Event oriented & CPM is Activity oriented. PERT is used to deal unit uncertainty. PERT has 3 time estimates – Optimistic time
– Most likely time. – Pessimistic time.
PERT has one or more activities follow a probability distribution – taking into account the uncertainty of the situation.
PERT network provides a measure of the probability of project completion by the scheduled date.
The probability concept – Only associated with PERT and not CPM.
(time estimates in CPM are deterministic & not
probabilistic)
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Example 2. CPM with Three Activity Time Estimates
TaskImmediate
Predecesors Optimistic Most Likely PessimisticA None 3 6 15B None 2 4 14C A 6 12 30D A 2 5 8E C 5 11 17F D 3 6 15G B 3 9 27H E,F 1 4 7I G,H 4 19 28
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Example 2. Expected Time Calculations
ET(A)= 3+4(6)+15
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ET(A)= 3+4(6)+15
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ET(A)=42/6=7ET(A)=42/6=7Task
Immediate Predecesors
Expected Time
A None 7B None 5.333C A 14D A 5E C 11F D 7G B 11H E,F 4I G,H 18
TaskImmediate
Predecesors Optimistic Most Likely PessimisticA None 3 6 15B None 2 4 14C A 6 12 30D A 2 5 8E C 5 11 17F D 3 6 15G B 3 9 27H E,F 1 4 7I G,H 4 19 28
Expected Time = Opt. Time + 4(Most Likely Time) + Pess. Time
6Expected Time =
Opt. Time + 4(Most Likely Time) + Pess. Time
6
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Ex. 2. Expected Time Calculations
TaskImmediate
PredecesorsExpected
TimeA None 7B None 5.333C A 14D A 5E C 11F D 7G B 11H E,F 4I G,H 18
ET(B)=32/6=5.333ET(B)=32/6=5.333
ET(B)= 2+4(4)+14
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ET(B)= 2+4(4)+14
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TaskImmediate
Predecesors Optimistic Most Likely PessimisticA None 3 6 15B None 2 4 14C A 6 12 30D A 2 5 8E C 5 11 17F D 3 6 15G B 3 9 27H E,F 1 4 7I G,H 4 19 28
Expected Time = Opt. Time + 4(Most Likely Time) + Pess. Time
6Expected Time =
Opt. Time + 4(Most Likely Time) + Pess. Time
6
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Ex 2. Expected Time Calculations
TaskImmediate
PredecesorsExpected
TimeA None 7B None 5.333C A 14D A 5E C 11F D 7G B 11H E,F 4I G,H 18
ET(C)= 6+4(12)+30
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ET(C)= 6+4(12)+30
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ET(C)=84/6=14ET(C)=84/6=14
TaskImmediate
Predecesors Optimistic Most Likely PessimisticA None 3 6 15B None 2 4 14C A 6 12 30D A 2 5 8E C 5 11 17F D 3 6 15G B 3 9 27H E,F 1 4 7I G,H 4 19 28
Expected Time = Opt. Time + 4(Most Likely Time) + Pess. Time
6Expected Time =
Opt. Time + 4(Most Likely Time) + Pess. Time
6
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Example 2. Network
A(7)
B(5.333)
C(14)
D(5)
E(11)
F(7)
H(4)
G(11)
I(18)
Duration = 54 Days
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Example 2. Probability Exercise
What is the probability of finishing this project in less than 53 days?
What is the probability of finishing this project in less than 53 days?
p(t < D)
TE = 54
Z = D - TE
cp2
Z = D - TE
cp2
tD=53
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Activity variance, = (Pessim. - Optim.
6)2 2Activity variance, = (
Pessim. - Optim.
6)2 2
Task Optimistic Most Likely Pessimistic VarianceA 3 6 15 4B 2 4 14C 6 12 30 16D 2 5 8E 5 11 17 4F 3 6 15G 3 9 27H 1 4 7 1I 4 19 28 16
(Sum the variance along the critical path.)
2 = 41 2 = 41
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There is a 43.8% probability that this project will be completed in less than 53 weeks.
There is a 43.8% probability that this project will be completed in less than 53 weeks.
p(Z < -.156) = .438, or 43.8 % (NORMSDIST(-.156)p(Z < -.156) = .438, or 43.8 % (NORMSDIST(-.156)
Z = D - T
=53- 54
41= -.156E
cp2
Z = D - T
=53- 54
41= -.156E
cp2
TE = 54
p(t < D)
tD=53
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Ex 2. Additional Probability Exercise
What is the probability that the project duration will exceed 56 weeks?
What is the probability that the project duration will exceed 56 weeks?
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Example 2. Additional Exercise Solution
tTE = 54
p(t < D)
D=56
Z = D - T
=56 - 54
41= .312E
cp2
Z = D - T
=56 - 54
41= .312E
cp2
p(Z > .312) = .378, or 37.8 % (1-NORMSDIST(.312)) p(Z > .312) = .378, or 37.8 % (1-NORMSDIST(.312))
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Time-Cost Models
Basic Assumption: Relationship between activity completion time and project cost
Time Cost Models: Determine the optimum point in time-cost tradeoffs– Activity direct costs– Project indirect costs– Activity completion times
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Network Crashing (Project Crashing) Determine the time – cost ratio for each activity in the
network – this ratio represents the increase in cost for a unit decrease in time.
Time – Cost Ratio = crash cost – normal cost
normal time – crash time Identify the activities on critical path & select that activity
which has smallest time cost ratio – crash that activity to the extent possible.
Observe any change in the critical path – any other path becomes critical – calculate time cost ratio in the new critical path.
Repeat above steps – till the activities are crashed to reduce the present duration to the desired time period.
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CPM Assumptions / Limitations Project activities can be identified as entities
(There is a clear beginning and ending point for each activity.)
Project activity sequence relationships can be specified and networked
Project control should focus on the critical path
The activity times follow the beta distribution, with the variance of the project assumed to equal the sum of the variances along the critical path
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Question Bowl
Which of the following are examples of Graphic Project Charts?
a. Gantt b. Barc. Milestoned. All of the abovee. None of the above
Answer: d. All of the above
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Question Bowl
Which of the following are one of the three organizational structures of projects?
a. Pure b. Functionalc. Matrixd. All of the abovee. None of the above
Answer: d. All of the above
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Question Bowl
Answer: a. SOW (or Statement of Work)
A project starts with a written description of the objectives to be achieved, with a brief statement of the work to be done and a proposed schedule all contained in which of the following?
a. SOW
b. WBS
c. Early Start Schedule
d. Late Start Schedule
e. None of the above
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Question Bowl For some activities in a project there may
be some leeway from when an activity can start and when it must finish. What is this period of time called when using the Critical Path Method?
a. Early start time
b. Late start time
c. Slack time
d. All of the above
e. None of the above
Answer: c. Slack time
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Question BowlHow much “slack time” is permitted in the “critical
path” activity times?a. Only one unit of time per activity b. No slack time is permittedc. As much as the maximum activity time in the
networkd. As much as is necessary to add up to the total
time of the projecte. None of the above
Answer: b. No slack time is permitted (All critical path activities must have zero slack time, otherwise they would not be critical to the project completion time.)
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Question Bowl
When looking at the Time-Cost Trade Offs in the Minimum-Cost Scheduling time-cost model, we seek to reduce the total time of a project by doing what to the least-cost activity choices?
a. Crashing them b. Adding slack timec. Subtracting slack timed. Adding project time e. None of the above
Answer: a. Crashing them (We “crash” the least-cost activity times to seek a reduced total time for the entire project and we do it step-wise as inexpensively as possible.)