Welcome to MM305

Unit 7 Seminar

Dr. Bob

Project Management

1. Define the project and all of its significant activities or tasks

2. Develop the relationships among the activities and decide which activities must precede others

3. Draw the network connecting all of the activities4. Assign time and/or cost estimates to each activity5. Compute the longest time path through the

network; this is called the critical path6. Use the network to help plan, schedule, monitor,

and control the project

Six Steps of PERT/CPMSix Steps of PERT/CPM

The critical path is important since any delay in these activities can delay the completion of the project

General Foundry Example of PERT/CPMGeneral Foundry Example of PERT/CPM

Network for General Foundry

A

Build Internal Components

H

Inspect and Test

E

Build Burner

C

Construct Collection Stack

Start

F

Install Control System

Finish

G

Install Pollution Device

D

Pour Concrete and Install Frame

B

Modify Roof and Floor

Figure 7.1

Activity TimesActivity Times• In some situations, activity times are known with

certainty. In many projects there is uncertainty about activity times

• PERT employs a probability distribution based on three time estimates for each activity

• A weighted average of these estimates is used for the time estimate and this is used to determine the critical path

• CPM assigns just one time estimate to each activity and this is used to find the critical path• We will use the CPM method in this class

How to Find the Critical PathHow to Find the Critical Path

General Foundry’s network with expected activity times

A 2 C 2

H 2E 4

B 3 D 4 G 5

F 3

Start Finish

Figure 13.3

How to Find the Critical PathHow to Find the Critical Path

To find the critical path, we need to determine the following for each activity in the network

1.1.Earliest start timeEarliest start time (ESES): the earliest time an activity can begin without violation of immediate predecessor requirements

2.2.Earliest finish timeEarliest finish time (EFEF): the earliest time at which an activity can end

3.3.Latest start timeLatest start time (LSLS): the latest time an activity can begin without delaying the entire project

4.4.Latest finish timeLatest finish time (LFLF): the latest time an activity can end without delaying the entire project

General Foundry’s ES, EF, LS and LF timesGeneral Foundry’s ES, EF, LS and LF times

A 20 20 2

C 22 42 4

H 213 1513 15

E 44 84 8

B 30 31 4

D 43 74 8

G 58 138 13

F 34 7

10 13

Start Finish

Activity TimeEarliest Time

Latest Time

Planning and Scheduling Project Costs: Budgeting ProcessPlanning and Scheduling Project Costs: Budgeting Process• The overall approach in the budgeting process of a

project is to determine how much is to be spent every week or month

• This can be accomplished in four basic budgeting steps1. Identify all costs associated with each of the activities then add these

costs together to get one estimated cost or budget for each activity2. In large projects, activities can be combined into larger work packages.

A work package is simply a logical collection of activities. 3. Convert the budgeted cost per activity into a cost per time period by

assuming that the cost of completing any activity is spent at a uniform rate over time

4. Using the ES and LS times, find out how much money should be spent during each week or month to finish the project by the date desired

QM for Windows Cost Budgeting

Single Time EstimateInput Screen

QM for Windows Cost Budgeting

Single Time EstimateInput Screen

QM for Windows Cost Budgeting

Single Time EstimateSolved

QM for Windows Cost Budgeting

Single Time EstimateSolved

QM for Windows Cost Budgeting

Single Time EstimateSolved Chart

QM for Windows Cost Budgeting

Single Time EstimateSolved Chart

Note the tabs

Using TechnologyUsing Technology

• Appendix C (Page 303-307): Using POM-QM for Windows

• Appendix D (Page 307): Using Excel QM

• Appendix 7.1 (Page 272)