Project Management

Prof. Dr. Ali ŞENUniversity of Mediterranean

Karpasia

What is a Project?

A temporary and one-time endeavor undertaken to create a unique product or service, which brings about beneficial change or added value

Examples of Projects

Building Construction

Research Project

PROJECT MANAGEMENT VS. GENERAL MANAGEMENT

5

Skill Requirements for Effective Project Management

• Conflict Resolution• Creativity and Flexibility• Ability to Adjust to Change• Good Planning• Negotiation– win-win versus win-lose

Chapter 1: The World of Project Management

6

Figure 1-1: Performance, Cost, and Time Project Targets

Figure 1-2 The Project Life Cycle

Management of Projects

1. Planning - goal setting, defining the project, team organization

2. Scheduling - relates people, money, and supplies to specific activities and activities to each other

3. Controlling - monitors resources, costs, quality, and budgets; revises plans and shifts resources to meet time and cost demands

Planning Objectives Resources Work break-down

schedule Organization

Scheduling Project activities Start & end times Network

Controlling Monitor, compare, revise, action

Project Management Activities

Project Planning, Scheduling, and Controlling

Figure 3.1

Before Start of project Duringproject Timeline project

Project Planning, Scheduling, and Controlling

Figure 3.1

Before Start of project Duringproject Timeline project

Project Planning, Scheduling, and Controlling

Figure 3.1

Before Start of project Duringproject Timeline project

Project Control Reports

Detailed cost breakdowns for each task Total program labor curves Cost distribution tables Functional cost and hour summaries Raw materials and expenditure forecasts Variance reports Time analysis reports Work status reports

Project Planning, Scheduling, and

Controlling

Figure 3.1

Before Start of project Duringproject Timeline project

Project Planning, Scheduling, and Controlling

Figure 3.1

Before Start of project Duringproject Timeline project

BudgetsDelayed activities reportSlack activities report

Time/cost estimatesBudgetsEngineering diagramsCash flow chartsMaterial availability details

CPM/PERTGantt chartsMilestone chartsCash flow schedules

The Constraint Triangle

RESOURCE(COST)

SCHEDULE(TIME)

PRODUCT (SPECIFICATION)

What is most important?

Peanuts

Tools And Techniques

The Work Breakdown Structure(WBS)

Outline• Introduction– Purposes, Benefits and Examples of a WBS– Additional WBS Terminology

• Risks in preparing a WBS• Summary• Appendix -- Constructing a WBS– Steps of Construction– Notes on WBS– Examples of Issues in preparing WBS

The Overall Planning Cycle

AnalyzeJob

Manage Risks

Execute

GenerateDetailed Plans

GenerateInitial Plans

Measure, Manage Productivity and Quality

Detailed Planning - Processes

EstimateSize

EstimateEffort and

Cost

EstimateSchedule

Evaluate

Source InformationStatement of Work

RequirementsConstraintsStandardsProcesses

Historyetc.

WBS Size

Effort &Cost

ScheduleOKCompleteDetailedPlanning

Revise &Negotiate

Not OK

Detailed Planning - Questions

How BigIs It?

How MuchWill itCost?

How Long?What Do WeDo When?

Is ThisAcceptable?

What Do WeHave To

Do?

WBS Size

Effort &Cost

ScheduleOKCompleteDetailedPlanning

What CanWe Change? Not OK

Work Breakdown Structure Introduction

Just tell me what I have to

do!

The Work Breakdown Structure Is ...

• A hierarchical list of the activities required to complete a project

• It includes tasks for – Software development– Software development management– Support of software development– Any other activities required to meet customer

requirements, such as training, documentation etc.

ParserCode

GeneratorFile

SystemRun TimeSystem

UserInterface

ManageSoftware

Development

Build “C”Compiler

Build TestSuite

WriteDocumentation

WriteInstallationSoftware

Software for“C” Compiler

Top Level Role of WBS

HistoricalRecords(at end

of project)

CostEstimate

(proposal &/project start)

CostTracking(during

execution)

WBSSource

Documents(SOW,

Requirements,contract,

test criteria, etc,)

An example of a WBSShown as a Tree

ParserCode

GeneratorFile

SystemRun TimeSystem

UserInterface

ManageSoftware

Development

Build “C”Compiler

Build TestSuite

WriteDocumentation

WriteInstallationSoftware

Software for“C” Compiler

An example of a WBSShown as Indented Text

1 Software for “C” Compiler 1.1 Build a “C” Compiler

1.1.1 Build a User Interface 1.1.2 Build a File System 1.1.3 Build a Parser 1.1.4 Build a Code Generator 1.1.5 Build a Run Time System

1.2 Build the Test Suite for the Compiler

1.2.1 etc.

1.3 Write Documentation 1.4 Write Installation Software

1.5 Manage Software Development

Purposes of a WBS

• To organize the work to be done• To illustrate the work to be done• To assure that all necessary work has been

identified• To divide the work into small, well defined

tasks

Why Do a WBS?

• To facilitate planning, estimating and scheduling of the project

• To identify contractual tasks and deliverables• To provide a basis for data monitoring and

historical data collection

“Rolling Up” Costs

$15K $38K$13K $24K$22K

$31K$112K $85K $28K $45K

$301K

Work Breakdown Structure Jigsaw model

ELEMENTS

Gantt Chart

• GANTT Charts• Constructing GANTT Charts• Staffing and Re-scheduling

Gantt Chart

• A GANTT chart is a type of bar chart that illustrates a project schedule.

• After the PERT/CPM analysis is completed, the following phase is to construct the GANTT chart and then to re-allocate resources and re-schedule if necessary.

• GANTT charts have become a common technique for representing the phases and activities of a project work breakdown structure.

• It was introduced by Henry Gantt around 1910 – 1915.

Gantt Chart

35

Gantt Chart

• Characteristics:– The bar in each row identifies the corresponding task– The horizontal position of the bar identifies start and end times of

the task– Bar length represents the duration of the task– Task durations can be compared easily– Good for allocating resources and re-scheduling– Precedence relationships can be represented using arrows– Critical activities are usually highlighted– Slack times are represented using bars with doted lines– The bar of each activity begins at the activity earliest start time (ES)– The bar of each activity ends at the activity latest finish time (LF).

36

Gantt Chart

37

Advantages Simple Good visual communication to others Task durations can be compared easily Good for scheduling resources

Disadvantages Dependencies are more difficult to visualise Minor changes in data can cause major changes in the chart

Constructing Gantt Chart

• The steps to construct a GANTT chart from the information obtained by PERT/CPM are:1. Schedule the critical tasks in the correct position.2. Place the time windows in which the non-critical tasks can be

scheduled.3. Schedule the non-critical tasks according to their earliest starting

times.4. Indicate precedence relationships between tasks.

38

Constructing Gantt Chart

• Example of an early GANTT chart construction:

39

Constructing Gantt Chart

Step 1. Schedule critical tasks:

40

Constructing Gantt Chart

Step 2. Place time windows for non-critical tasks:

41

Constructing Gantt Chart

Step 3. Schedule non-critical tasksStep 4. Indicate precedence relationships:

42

Project Management Software

• Benefits of project management software:– Calculate project schedule– Resource smoothing – Automatic generation of reports and charts

• Limitations of project management software– Allocation of resources to tasks– Estimation of tasks durations– Make decisions

Reading: (Kendall&Kendall, chapter 3), (Dennis &Wixom, chapter 3).

43

Activity-in-the-Box Network Diagrams (precedence)

Six Steps PERT & CPM

1. Define the project and prepare the work breakdown structure

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

3. Draw the network connecting all of the activities

Six Steps PERT & CPM

4. Assign time and/or cost estimates to each activity

5. Compute the longest time path through the network – this is called the critical path

6. Use the network to help plan, schedule, monitor, and control the project

1. When will the entire project be completed?2. What are the critical activities or tasks in the

project?3. Which are the noncritical activities?4. What is the probability the project will be

completed by a specific date?

Questions PERT & CPM Can Answer

5. Is the project on schedule, behind schedule, or ahead of schedule?

6. Is the money spent equal to, less than, or greater than the budget?

7. Are there enough resources available to finish the project on time?

8. If the project must be finished in a shorter time, what is the way to accomplish this at least cost?

Questions PERT & CPM Can Answer

A Comparison of AON and AOA Network Conventions

Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)

A comes before B, which comes before C

(a) A B CBA C

A and B must both be completed before C can start

(b)

A

CC

B

A

B

B and C cannot begin until A is completed

(c)

B

A

CA

B

CFigure 3.5

A Comparison of AON and AOA Network Conventions

Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)

C and D cannot begin until both A and B are completed

(d)

A

B

C

D B

A C

D

C cannot begin until both A and B are completed; D cannot begin until B is completed. A dummy activity is introduced in AOA

(e)

CA

B D

Dummy activity

A

B

C

D

Figure 3.5

A Comparison of AON and AOA Network Conventions

Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)

B and C cannot begin until A is completed. D cannot begin until both B and C are completed. A dummy activity is again introduced in AOA.

(f)

A

C

DB A B

C

D

Dummy activity

Figure 3.5

AON Example

Activity DescriptionImmediate

Predecessors

A Build internal components —

B Modify roof and floor —

C Construct collection stack A

D Pour concrete and install frame A, B

E Build high-temperature burner C

F Install pollution control system C

G Install air pollution device D, E

H Inspect and test F, G

Milwaukee Paper Manufacturing'sActivities and Predecessors

Table 3.1

AON Network for Milwaukee Paper

A

Start

BStart Activity

Activity A(Build Internal Components)

Activity B(Modify Roof and Floor)

Figure 3.6

AON Network for Milwaukee Paper

Figure 3.7

C

D

A

Start

B

Activity A Precedes Activity C

Activities A and B Precede Activity D

AON Network for Milwaukee Paper

G

E

F

H

CA

Start

DB

Arrows Show Precedence Relationships

Figure 3.8

H(Inspect/ Test)

7Dummy Activity

AOA Network for Milwaukee Paper

6

F(Install Controls)

E(Build Burner)

G

(Insta

ll

Pollution

Device)

5D

(Pour Concrete/ Install Frame)

4C

(Construct Stack)

1

3

2

B(Modify

Roof/Floor)

A(Build

Intern

al

Components)

Figure 3.9

Determining the Project Schedule

Perform a Critical Path Analysis The critical path is the longest path through

the network The critical path is the shortest time in which

the project can be completed Any delay in critical path activities delays the

project Critical path activities have no slack time

Determining the Project Schedule

Perform a Critical Path AnalysisActivity Description Time (weeks)

A Build internal components 2B Modify roof and floor 3C Construct collection stack 2D Pour concrete and install frame 4E Build high-temperature burner 4F Install pollution control system 3G Install air pollution device 5H Inspect and test 2

Total Time (weeks) 25

Table 3.2

Determining the Project Schedule

Perform a Critical Path Analysis

Table 3.2

Activity Description Time (weeks)A Build internal components 2B Modify roof and floor 3C Construct collection stack 2D Pour concrete and install frame 4E Build high-temperature burner 4F Install pollution control system 3G Install air pollution device 5H Inspect and test 2

Total Time (weeks) 25

Earliest start (ES) = earliest time at which an activity can start, assuming all predecessors have been completedEarliest finish (EF) = earliest time at which an activity can be finishedLatest start (LS) = latest time at which an activity can start so as to not delay the completion time of the entire projectLatest finish (LF) = latest time by which an activity has to be finished so as to not delay the completion time of the entire project

Determining the Project Schedule

Perform a Critical Path Analysis

Figure 3.10

A

Activity Name or Symbol

Earliest StartES

Earliest FinishEF

Latest Start LS Latest FinishLF

Activity Duration

2

Forward PassBegin at starting event and work forward

Earliest Start Time Rule:

If an activity has only a single immediate predecessor, its ES equals the EF of the predecessor

If an activity has multiple immediate predecessors, its ES is the maximum of all the EF values of its predecessors

ES = Max {EF of all immediate predecessors}

Forward PassBegin at starting event and work forward

Earliest Finish Time Rule:

The earliest finish time (EF) of an activity is the sum of its earliest start time (ES) and its activity time

EF = ES + Activity time

ES/EF Network for Milwaukee Paper

Start

0

0

ES

0

EF = ES + Activity time

ES/EF Network for Milwaukee Paper

Start0

0

0

A

2

2

EF of A = ES of A + 2

0

ESof A

B

3

ES/EF Network for Milwaukee Paper

Start0

0

0

A

2

20

3

EF of B = ES of B + 3

0

ESof B

C

2

2 4

ES/EF Network for Milwaukee Paper

B

3

0 3

Start0

0

0

A

2

20

C

2

2 4

ES/EF Network for Milwaukee Paper

B

3

0 3

Start0

0

0

A

2

20

D

4

73= Max (2, 3)

D

4

3 7

C

2

2 4

ES/EF Network for Milwaukee Paper

B

3

0 3

Start0

0

0

A

2

20

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

D

4

3 7

C

2

2 4

ES/EF Network for Milwaukee Paper

B

3

0 3

Start0

0

0

A

2

20

Figure 3.11

Backward PassBegin with the last event and work backwards

Latest Finish Time Rule:

If an activity is an immediate predecessor for just a single activity, its LF equals the LS of the activity that immediately follows it

If an activity is an immediate predecessor to more than one activity, its LF is the minimum of all LS values of all activities that immediately follow it

LF = Min {LS of all immediate following activities}

Backward PassBegin with the last event and work backwards

Latest Start Time Rule:

The latest start time (LS) of an activity is the difference of its latest finish time (LF) and its activity time

LS = LF – Activity time

LS/LF Times for Milwaukee Paper

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

LF = EF of Project

1513

LS = LF – Activity time

LS/LF Times for Milwaukee Paper

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

13 15

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

LF = Min(LS of following activity)

10 13

LS/LF Times for Milwaukee Paper

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

13 15

10 13

8 13

4 8

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

LF = Min(4, 10)

42

LS/LF Times for Milwaukee Paper

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

13 15

10 13

8 13

4 8

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

42

84

20

41

00

Computing Slack Time

After computing the ES, EF, LS, and LF times for all activities, compute the slack or free time for each activity

Slack is the length of time an activity can be delayed without delaying the entire project

Slack = LS – ES or Slack = LF – EF

Computing Slack TimeEarliest Earliest Latest Latest On

Start Finish Start Finish Slack CriticalActivity ES EF LS LF LS – ES Path

A 0 2 0 2 0 YesB 0 3 1 4 1 NoC 2 4 2 4 0 YesD 3 7 4 8 1 NoE 4 8 4 8 0 YesF 4 7 10 13 6 NoG 8 13 8 13 0 YesH 13 15 13 15 0 Yes

Table 3.3

Critical Path for Milwaukee Paper

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

13 15

10 13

8 13

4 8

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

42

84

20

41

00

ES – EF Gantt Chartfor Milwaukee Paper

A Build internal componentsB Modify roof and floorC Construct collection stackD Pour concrete and install

frameE Build high-temperature

burnerF Install pollution control

systemG Install air pollution deviceH Inspect and test

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

LS – LF Gantt Chartfor Milwaukee Paper

A Build internal componentsB Modify roof and floorC Construct collection stackD Pour concrete and install

frameE Build high-temperature

burnerF Install pollution control

systemG Install air pollution deviceH Inspect and test

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

CPM assumes we know a fixed time estimate for each activity and there is no variability in activity times

PERT uses a probability distribution for activity times to allow for variability

Variability in Activity Times

Three time estimates are requiredOptimistic time (a) – if everything goes

according to planPessimistic time (b) – assuming very

unfavorable conditionsMost likely time (m) – most realistic estimate

Variability in Activity Times

Estimate follows beta distribution

Variability in Activity Times

Expected time:

Variance of times: t = (a + 4m + b)/6

v = [(b – a)/6]2

Estimate follows beta distribution

Variability in Activity Times

Expected time:

Variance of times: t = (a + 4m + b)/6

v = [(b − a)/6]2Probability of 1 in 100 of > b occurring

Probability of 1 in 100 of < a occurring

Prob

abili

ty

Optimistic Time (a)

Most Likely Time (m)

Pessimistic Time (b)

Activity Time

Figure 3.12

Computing VarianceMost Expected

Optimistic Likely Pessimistic Time VarianceActivity a m b t = (a + 4m + b)/6 [(b – a)/6]2

A 1 2 3 2 .11B 2 3 4 3 .11C 1 2 3 2 .11D 2 4 6 4 .44E 1 4 7 4 1.00F 1 2 9 3 1.78G 3 4 11 5 1.78H 1 2 3 2 .11

Table 3.4

Probability of Project Completion

Project variance is computed by summing the variances of critical activities

s2 = Project variance

= (variances of activities on critical path)

p

Probability of Project Completion

Project variance is computed by summing the variances of critical activitiesProject variances2 = .11 + .11 + 1.00 + 1.78 + .11 = 3.11

Project standard deviation

sp = Project variance

= 3.11 = 1.76 weeks

p

Probability of Project Completion

PERT makes two more assumptions:

Total project completion times follow a normal probability distribution

Activity times are statistically independent

Probability of Project Completion

Standard deviation = 1.76 weeks

15 Weeks

(Expected Completion Time)Figure 3.13

Probability of Project Completion

What is the probability this project can be completed on or before the 16 week deadline?

Z = – /sp

= (16 wks – 15 wks)/1.76

= 0.57

due expected datedate of completion

Where Z is the number of standard deviations the due date or target date lies from the

mean or expected date

Probability of Project Completion

What is the probability this project can be completed on or before the 16 week deadline?

Z = − /sp

= (16 wks − 15 wks)/1.76

= 0.57

due expected datedate of completion

Where Z is the number of standard deviations the due date or target date lies from the

mean or expected date

.00 .01 .07 .08.1 .50000 .50399 .52790 .53188.2 .53983 .54380 .56749 .57142

.5 .69146 .69497 .71566 .71904

.6 .72575 .72907 .74857 .75175

From Tablaeu

Probability of Project Completion

Time

Probability(T ≤ 16 weeks)is 71.57%

Figure 3.14

0.57 Standard deviations

15 16Weeks Weeks

Determining Project Completion Time

Probability of 0.01

Z

Figure 3.15

From Appendix I

Probability of 0.99

2.33 Standard deviations

0 2.33

Variability of Completion Time for Noncritical Paths

Variability of times for activities on noncritical paths must be considered when finding the probability of finishing in a specified time

Variation in noncritical activity may cause change in critical path

What Project Management Has Provided So Far

The project’s expected completion time is 15 weeks

There is a 71.57% chance the equipment will be in place by the 16 week deadline

Five activities (A, C, E, G, and H) are on the critical path

Three activities (B, D, F) are not on the critical path and have slack time

A detailed schedule is available

Trade-Offs And Project Crashing

The project is behind schedule The completion time has been

moved forward

It is not uncommon to face the following situations:

Shortening the duration of the project is called project crashing

Factors to Consider When Crashing A Project

The amount by which an activity is crashed is, in fact, permissible

Taken together, the shortened activity durations will enable us to finish the project by the due date

The total cost of crashing is as small as possible

Steps in Project Crashing

1. Compute the crash cost per time period. If crash costs are linear over time:

Crash costper period =

(Crash cost – Normal cost)

(Normal time – Crash time)

2. Using current activity times, find the critical path and identify the critical activities

Steps in Project Crashing

3. If there is only one critical path, then select the activity on this critical path that (a) can still be crashed, and (b) has the smallest crash cost per period. If there is more than one critical path, then select one activity from each critical path such that (a) each selected activity can still be crashed, and (b) the total crash cost of all selected activities is the smallest. Note that the same activity may be common to more than one critical path.

Steps in Project Crashing

4. Update all activity times. If the desired due date has been reached, stop. If not, return to Step 2.

Crashing The Project

Time (Wks) Cost ($) Crash Cost CriticalActivity Normal Crash Normal Crash Per Wk ($) Path?

A 2 1 22,000 22,750 750 YesB 3 1 30,000 34,000 2,000 NoC 2 1 26,000 27,000 1,000 YesD 4 2 48,000 49,000 1,000 NoE 4 2 56,000 58,000 1,000 YesF 3 2 30,000 30,500 500 NoG 5 2 80,000 84,500 1,500 YesH 2 1 16,000 19,000 3,000 Yes

Table 3.5

Crash and Normal Times and Costs for Activity B

| | |1 2 3 Time (Weeks)

$34,000 —

$33,000 —

$32,000 —

$31,000 —

$30,000 —

—

Activity Cost Crash

Normal

Crash Time Normal Time

Crash Cost

Normal Cost

Crash Cost/Wk = Crash Cost – Normal CostNormal Time – Crash Time

= $34,000 – $30,0003 – 1

= = $2,000/Wk$4,0002 Wks

Figure 3.16

Critical Path And Slack Times For Milwaukee Paper

Figure 3.17

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

13 15

10 13

8 13

4 8

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

42

84

20

41

00

Slack = 1 Slack = 1

Slack = 0 Slack = 6

Slack = 0

Slack = 0

Slack = 0

Slack = 0

Advantages of PERT/CPM

1. Especially useful when scheduling and controlling large projects

2. Straightforward concept and not mathematically complex

3. Graphical networks help highlight relationships among project activities

4. Critical path and slack time analyses help pinpoint activities that need to be closely watched

Advantages of PERT/CPM

5. Project documentation and graphics point out who is responsible for various activities

6. Applicable to a wide variety of projects7. Useful in monitoring not only schedules but

costs as well

1. Project activities have to be clearly defined, independent, and stable in their relationships

2. Precedence relationships must be specified and networked together

3. Time estimates tend to be subjective and are subject to fudging by managers

4. There is an inherent danger of too much emphasis being placed on the longest, or critical, path

Limitations of PERT/CPM

Project Execution Plan

• Project Execution Strategy• Project Management• Quality• Safety• Risk Management• Design/Develop/Program• Implementation• Documentation• Training

Prof. Dr. Ali ŞENContact Information

Prof. Dr. Ali ŞENE-mail : asen@akun.edu.tr