Chapter 9Managing Projects

Lecture OutlineProject PlanningProject SchedulingProject ControlCPM/PERTProbabilistic Activity TimesMicrosoft ProjectProject Crashing and Time-Cost Trade-off

Copyright 2011 John Wiley & Sons, Inc.9-*

Project Management ProcessProjectunique, one-time operational activity or effort9-*Copyright 2011 John Wiley & Sons, Inc.

Project Management ProcessCopyright 2011 John Wiley & Sons, Inc.9-*

Project Management ProcessCopyright 2011 John Wiley & Sons, Inc.9-*

Project ElementsObjectiveScopeContract requirementsSchedulesResourcesPersonnelControlRisk and problem analysisCopyright 2011 John Wiley & Sons, Inc.9-*

Project Team and Project ManagerProject teammade up of individuals from various areas and departments within a companyMatrix organizationa team structure with members from functional areas, depending on skills requiredProject managermost important member of project team

Copyright 2011 John Wiley & Sons, Inc.9-*

Scope StatementScope statementa document that provides an understanding, justification, and expected result of a project

Statement of workwritten description of objectives of a projectCopyright 2011 John Wiley & Sons, Inc.9-*

Work Breakdown StructureWork breakdown structure (WBS)Breaks a project into components, subcomponents, activities, and tasksCopyright 2011 John Wiley & Sons, Inc.9-*

Copyright 2011 John Wiley & Sons, Inc.9-*

Responsibility Assignment MatrixOrganizational Breakdown Structure (OBS)a chart that shows which organizational units are responsible for work items

Responsibility Assignment Matrix (RAM)shows who is responsible for work in a project

Copyright 2011 John Wiley & Sons, Inc.9-*

Copyright 2011 John Wiley & Sons, Inc.9-*Responsibility Assignment Matrix

Global and Diversity Issues in Project ManagementGlobal project teams are formed from different genders, cultures, ethnicities, etc.

Diversity among team members can add an extra dimension to project planning

Cultural research and communication are important elements in the planning process9-*

Project SchedulingStepsDefine activitiesSequence activitiesEstimate timeDevelop scheduleTechniquesGantt chartCPM/PERT

SoftwareMicrosoft ProjectCopyright 2011 John Wiley & Sons, Inc.9-*

Gantt ChartGraph or bar chart Bars represent the time for each taskBars also indicate status of tasksProvides visual display of project schedule

Slackamount of time an activity can be delayed without delaying the projectCopyright 2011 John Wiley & Sons, Inc.9-*

Example of Gantt ChartCopyright 2011 John Wiley & Sons, Inc.9-*

Project ControlTime management

Cost management

Performance managementEarned Value Analysis standard procedure tonumerically measure a projects progressforecast its completion date and cost measure schedule and budget variationCopyright 2011 John Wiley & Sons, Inc.9-*

Project ControlQuality management

Communication

Enterprise project managementCopyright 2011 John Wiley & Sons, Inc.9-*

CPM/PERTCritical Path Method (CPM)DuPont & Remington-RandDeterministic task timesActivity-on-node network construction

Project Evaluation and Review Technique (PERT)US Navy and Booz, Allen & HamiltonProbabilistic task time estimates Activity-on-arrow network construction9-*

Project Network Activity-on-node (AON)nodes represent activitiesarrows show precedence relationshipsActivity-on-arrow (AOA)arrows represent activitiesnodes are events for points in timeEventcompletion or beginning of an activity in a project

Copyright 2011 John Wiley & Sons, Inc.9-*132BranchNode

AOA Project Network for a HouseCopyright 2011 John Wiley & Sons, Inc.9-*

Concurrent ActivitiesDummytwo or more activities cannot share same start and end nodesCopyright 2011 John Wiley & Sons, Inc.9-*

AON Network for House Building ProjectCopyright 2011 John Wiley & Sons, Inc.9-*

Critical PathCopyright 2011 John Wiley & Sons, Inc.9-*Critical pathLongest path through a networkMinimum project completion timeA:1-2-4-7 3 + 2 + 3 + 1 = 9 months B:1-2-5-6-7 3 + 2 + 1 + 1 + 1 = 8 monthsC:1-3-4-7 3 + 1 + 3 + 1 = 8 monthsD:1-3-5-6-7 3 + 1 + 1 + 1 + 1 = 7 months

Activity Start TimesCopyright 2011 John Wiley & Sons, Inc.9-*

Node ConfigurationCopyright 2011 John Wiley & Sons, Inc.9-*

Activity SchedulingEarliest start time (ES)earliest time an activity can start ES = maximum EF of immediate predecessorsForward passstarts at beginning of CPM/PERT network to determine earliest activity timesEarliest finish time (EF)earliest time an activity can finishearliest start time plus activity timeEF= ES + tCopyright 2011 John Wiley & Sons, Inc.9-*

Earliest Activity Start and Finish TimesCopyright 2011 John Wiley & Sons, Inc.9-*1031235233415561458366717891StartDesign house and obtain financingSelect paintLay foundationSelect carpetBuild houseFinish workOrder and receive materials

Activity SchedulingLatest start time (LS)Latest time an activity can start without delaying critical path time LS= LF - tLatest finish time (LF)latest time an activity can be completed without delaying critical path timeLF = minimum LS of immediate predecessorsBackward passDetermines latest activity times by starting at the end of CPM/PERT network and working forwardCopyright 2011 John Wiley & Sons, Inc.9-*

Latest Activity Start and Finish TimesCopyright 2011 John Wiley & Sons, Inc.9-*031031352352453341675561584583676671897891StartDesign house and obtain financingSelect paintLay foundationSelect carpetBuild houseFinish workOrder and receive materials

Activity SlackCopyright 2011 John Wiley & Sons, Inc.9-*

Probabilistic Time EstimatesBeta distributionprobability distribution traditionally used in CPM/PERTCopyright 2011 John Wiley & Sons, Inc.9-*

Examples of Beta DistributionsCopyright 2011 John Wiley & Sons, Inc.9-*

Project with Probabilistic Time EstimatesCopyright 2011 John Wiley & Sons, Inc.9-*

Activity Time EstimatesCopyright 2011 John Wiley & Sons, Inc.9-*

Activity Early, Late Times & SlackCopyright 2011 John Wiley & Sons, Inc.9-*

Earliest, Latest, and SlackCopyright 2011 John Wiley & Sons, Inc.9-*

Total Project VarianceCopyright 2011 John Wiley & Sons, Inc.9-*2= 22 + 52 + 82 + 112= 1.00 + 0.11 + 1.78 + 4.00= 6.89 weeks

CPM/PERT With OM ToolsCopyright 2011 John Wiley & Sons, Inc.9-*

Probabilistic Network AnalysisCopyright 2011 John Wiley & Sons, Inc.9-*

Normal Distribution of Project TimeCopyright 2011 John Wiley & Sons, Inc.9-*

Southern TextileCopyright 2011 John Wiley & Sons, Inc.9-*

Southern TextileCopyright 2011 John Wiley & Sons, Inc.9-*

Microsoft ProjectPopular software package for project

management and CPM/PERT analysis

Relatively easy to useCopyright 2011 John Wiley & Sons, Inc.9-*

Microsoft ProjectCopyright 2011 John Wiley & Sons, Inc.9-*

Microsoft ProjectCopyright 2011 John Wiley & Sons, Inc.9-*

Microsoft ProjectCopyright 2011 John Wiley & Sons, Inc.9-*

Microsoft Project Zoom ViewCopyright 2011 John Wiley & Sons, Inc.9-*

Microsoft Project Task InformationCopyright 2011 John Wiley & Sons, Inc.9-*

Microsoft Project Degree of CompletionCopyright 2011 John Wiley & Sons, Inc.9-*

PERT Analysis with Microsoft ProjectCopyright 2011 John Wiley & Sons, Inc.9-*

PERT Analysis with Microsoft ProjectCopyright 2011 John Wiley & Sons, Inc.9-*

PERT Analysis with Microsoft ProjectCopyright 2011 John Wiley & Sons, Inc.9-*

Project CrashingCrashingreducing project time by expending additional resourcesCrash timean amount of time an activity is reducedCrash costcost of reducing activity timeGoalreduce project duration at minimum cost

Copyright 2011 John Wiley & Sons, Inc.9-*

Project Network Building a HouseCopyright 2011 John Wiley & Sons, Inc.9-*

Normal Time and Costvs. Crash Time and CostCopyright 2011 John Wiley & Sons, Inc.9-*

Project CrashingCopyright 2011 John Wiley & Sons, Inc.9-*

Copyright 2011 John Wiley & Sons, Inc.9-*Project Duration:36 weeksFROM Project Duration:31 weeksAdditional Cost:$2000TO

Time-Cost Relationship Copyright 2011 John Wiley & Sons, Inc.9-*Crashing costs increase as project duration decreases

Indirect costs increase as project duration increases

Reduce project length as long as crashing costs are less than indirect costs

Time-Cost TradeoffCopyright 2011 John Wiley & Sons, Inc.9-*

Copyright 2011 John Wiley & Sons, Inc.6-*Copyright 2011 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful. Request for further information should be addressed to the Permission Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information herein.

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