Transcript Chapter 9 Project Management

Chapter 9
Project Management
Lecture Outline
•
•
•
•
•
•
•
Project Planning
Project Scheduling
Project Control
CPM/PERT
Probabilistic Activity Times
Microsoft Project
Project Crashing and Time-Cost Trade-off
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Project Management Process
• Project
• unique, one-time operational activity or effort
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9-3
Project Management Process
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9-4
Project Management Process
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Project Elements
•
•
•
•
•
•
•
•
Objective
Scope
Contract requirements
Schedules
Resources
Personnel
Control
Risk and problem analysis
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Project Team and Project Manager
• Project team
• made up of individuals from various areas and
departments within a company
• Matrix organization
• a team structure with members from functional
areas, depending on skills required
• Project manager
• most important member of project team
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Scope Statement
• Scope statement
• a document that provides an understanding,
justification, and expected result of a project
• Statement of work
• written description of objectives of a project
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9-8
Work Breakdown Structure
• Work breakdown structure (WBS)
• Breaks a project into components,
subcomponents, activities, and tasks
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9-9
Work Breakdown Structure for Computer Order
Processing System Project
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9-10
Responsibility Assignment Matrix
• Organizational 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
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9-11
Responsibility Assignment Matrix
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9-12
Global and Diversity Issues in Project
Management
• Global 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 process
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9-13
Project Scheduling
• Steps
•
•
•
•
Define activities
Sequence activities
Estimate time
Develop schedule
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• Techniques
• Gantt chart
• CPM/PERT
• Software
• Microsoft Project
9-14
Gantt Chart
•
•
•
•
Graph or bar chart
Bars represent the time for each task
Bars also indicate status of tasks
Provides visual display of project schedule
• Slack
• amount of time an activity can be delayed without
delaying the project
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9-15
Example of Gantt Chart
0
|
2
|
Month
4
|
6
|
8
|
10
Activity
Design house
and obtain
financing
Lay foundation
Order and
receive
materials
Build house
Select paint
Select carpet
Finish work
1
3
5
7
9
Month
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Project Control
• Time management
• Cost management
• Performance management
• Earned Value Analysis – standard procedure to
• numerically measure a project’s progress
• forecast its completion date and cost
• measure schedule and budget variation
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Project Control
• Quality management
• Communication
• Enterprise project management
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9-18
CPM/PERT
• Critical Path Method (CPM)
• DuPont & Remington-Rand
• Deterministic task times
• Activity-on-node network construction
• Project Evaluation and Review Technique (PERT)
• US Navy and Booz, Allen & Hamilton
• Probabilistic task time estimates
• Activity-on-arrow network construction
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Project Network
• Activity-on-node (AON)
• nodes represent activities
• arrows show precedence
relationships
Branch
1
Node
2
3
• Activity-on-arrow (AOA)
• arrows represent activities
• nodes are events for
points in time
• Event
• completion or beginning
of an activity in a project
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AOA Project Network for a House
3
Lay
foundation
2
1
3
Design house
and obtain
financing
Build
house
0
1
2
Dummy
Order and
receive
materials
4
Select
paint
Finish
work
6
3
1
1
1
7
Select
carpet
5
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Concurrent Activities
• Dummy
• two or more activities cannot share same start and
end nodes
3
Lay foundation
2
Lay
foundation
3
Order material
(a) Incorrect precedence
relationship
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2
Dummy
2
0
1
4
Order material
(b) Correct precedence
relationship
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AON Network for House Building
Project
Start
Lay
foundation
Build
house
2
2
4
3
Activity Number
Activity Time
1
3
7
1
Design house
and obtain
financing
3
1
5
1
6
1
Order &receive
materials
Select
paint
Select
carpet
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Finish work
9-23
Critical Path
2
2
Start
1
3
7
1
3
1
A:
B:
C:
D:
4
3
1-2-4-7
3 + 2 + 3 + 1 = 9 months
1-2-5-6-7
3 + 2 + 1 + 1 + 1 = 8 months
1-3-4-7
3 + 1 + 3 + 1 = 8 months
1-3-5-6-7
3 + 1 + 1 + 1 + 1 = 7 months
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5
1
6
1
 Critical path


Longest path through a
network
Minimum project
completion time
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Activity Start Times
Start at 5 months
2
2
Start
4
3
Finish at 9 months
1
3
7
1
3
1
Start at 3 months
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5
1
Finish
6
1
Start at 6 months
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Node Configuration
Activity
number
Activity
duration
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Earliest
start
Earliest
finish
1
0
3
3
0
3
Latest
start
Latest
finish
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Activity Scheduling
• Earliest start time (ES)
• earliest time an activity can start
• ES = maximum EF of immediate predecessors
• Forward pass
• starts at beginning of CPM/PERT network to determine
earliest activity times
• Earliest finish time (EF)
• earliest time an activity can finish
• earliest start time plus activity time
• EF= ES + t
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Earliest Activity Start and Finish Times
Lay foundation
Build house
2
3
5
4
2
5
8
3
1
Start
0
Finish work
3
7
1
Design house
and obtain
financing
8
9
1
6
3
3
4
1
Order and
receive materials
6
7
1
5
5
6
1
Select carpet
Select paint
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Activity Scheduling
• Latest start time (LS)
• Latest time an activity can start without delaying critical
path time
• LS= LF - t
• Latest finish time (LF)
• latest time an activity can be completed without delaying
critical path time
• LF = minimum LS of immediate predecessors
• Backward pass
• Determines latest activity times by starting at the end of
CPM/PERT network and working forward
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9-29
Latest Activity Start and Finish Times
Lay foundation
Build house
2
3
2
Start
3
5
5
4
5
8
3
5
8
Finish work
1
0
3
7
8
9
1
0
3
1
8
9
Design house
and obtain
financing
3
3
4
1
4
5
Order and
receive materials
5
1
5
6
6
6
7
1
6
7
6
7
Select carpet
Select paint
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9-30
Activity Slack
Activity
LS
ES
LF
EF
Slack S
*1
0
0
3
3
0
*2
3
3
5
5
0
3
4
3
5
4
1
*4
5
5
8
8
0
5
6
5
7
6
1
6
7
6
8
7
1
*7
8
8
9
9
0
* Critical Path
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Probabilistic Time Estimates
• Beta distribution
• probability distribution traditionally used in CPM/PERT
Mean (expected time):
Variance:
a + 4m + b
t=
6
b-a
 = 6
2
2
where
a = optimistic estimate
m = most likely time estimate
b = pessimistic time estimate
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P(time)
P(time)
Examples of Beta Distributions
a
m
t
b
a
t
Time
m
b
P(time)
Time
a
m=t
b
Time
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9-33
Project with Probabilistic Time
Estimates
Equipment
installation
Equipment testing
and modification
1
4
6,8,10
2,4,12
System
development
Start
2
8
Manual
testing
3,6,9
Position
recruiting
System
training
3,7,11
5
2,3,4
Job Training
3
6
1,3,5
3,4,5
Final
debugging
10
1,4,7
Finish
11
9
2,4,6
System
testing
1,10,13
System
changeover
Orientation
7
2,2,2
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Activity Time Estimates
TIME ESTIMATES (WKS)
ACTIVITY
1
2
3
4
5
6
7
8
9
10
11
MEAN TIME
VARIANCE
a
m
b
t
б2
6
3
1
2
2
3
2
3
2
1
1
8
6
3
4
3
4
2
7
4
4
10
10
9
5
12
4
5
2
11
6
7
13
8
6
3
5
3
4
2
7
4
4
9
0.44
1.00
0.44
2.78
0.11
0.11
0.00
1.78
0.44
1.00
4.00
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Activity Early, Late Times & Slack
ACTIVITY
1
2
3
4
5
6
7
8
9
10
11
t
б
ES
EF
LS
LF
S
8
6
3
5
3
4
2
7
4
4
9
0.44
1.00
0.44
2.78
0.11
0.11
0.00
1.78
0.44
1.00
4.00
0
0
0
8
6
3
3
9
9
13
16
8
6
3
13
9
7
5
16
13
17
25
1
0
2
16
6
5
14
9
12
21
16
9
6
5
21
9
9
16
16
16
25
25
1
0
2
8
0
2
11
0
3
8
0
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9-36
Earliest, Latest, and Slack
1 0
8 1
Start
2 0
6 0
3 0
3 2
8
9
3
5
10 13 17
8 9
7 9
6
6
Critical Path 2-5-8-11
4 8 13
5 16 21
5 6
3 6
6 3
4 5
16
7
3
Finish
16
9
9
1 0
9 9 13
4 12 16
11 16 25
9 16 25
9
7 3 5
2 14 16
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9-37
Total Project Variance
2 = б22 + б52 + б82 + б112
 = 1.00 + 0.11 + 1.78 + 4.00
= 6.89 weeks
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9-38
CPM/PERT With OM Tools
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9-39
Probabilistic Network Analysis
Determine probability that project is
completed within specified time
Z=
where
=
=
x=
Z=
x-

tp = project mean time
project standard deviation
proposed project time
number of standard deviations that
x is from the mean
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9-40
Normal Distribution of Project Time
Probability
Z
 = tp
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x
Time
9-41
Southern Textile
What is probability that project is completed within 30 weeks?
P(x  30 weeks)
 = 6.89 weeks
2
 =
6.89
 = 2.62 weeks
Z=
=
x-

30 - 25
2.62
= 1.91
 = 25 x = 30
Time (weeks)
From Table A.1, (appendix A) a Z score of 1.91 corresponds to a
probability of 0.4719. Thus P(30) = 0.4719 + 0.5000 = 0.9719
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9-42
Southern Textile
What is probability that project is completed within 22 weeks?
P(x  22 weeks)
= 0.1271
0.3729
 = 6.89 weeks
2
 =
6.89
 = 2.62 weeks
Z=
=
x-

22 - 25
2.62
= -1.14
x = 22  = 25
Time (weeks)
From Table A.1, (appendix A) a Z score of 1.14 corresponds to a
probability of 0.3729. Thus P(22) = 0.5000 - 0.3729 = 0.1271
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9-43
Microsoft Project
• Popular software package for project
management and CPM/PERT analysis
• Relatively easy to use
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9-44
Microsoft Project
Click on “Tasks”
First step;
Start Date
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9-45
Microsoft Project
Click on “Format” then ”Timescale”
to scale Gantt chart.
Create precedence
relationships;
click on predecessor
activity, then
holding “Ctrl” Key,
click on successor
activity.
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Precedence
relationships
Gantt chart;
click on “View”
to activate
9-46
Microsoft Project
Click on “View” then
Network Diagram
Critical path
in red
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9-47
Microsoft Project – Zoom View
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9-48
Microsoft Project – Task Information
Enter % completion
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9-49
Microsoft Project – Degree of Completion
Activities 1, 2 and 3
100% complete
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Black bars show
degree of completion
9-50
PERT Analysis with Microsoft Project
Click on PERT Entry
Sheet to enter 3
time estimates
Click on PERT
calculator to compute
activity duration
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9-51
PERT Analysis with Microsoft Project
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9-52
PERT Analysis with Microsoft Project
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9-53
Project Crashing
• Crashing
• reducing project time by expending additional
resources
• Crash time
• an amount of time an activity is reduced
• Crash cost
• cost of reducing activity time
• Goal
• reduce project duration at minimum cost
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9-54
Project Network – Building a House
4
2
8
12
7
4
1
12
3
4
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5
4
6
4
9-55
Normal Time and Cost
vs. Crash Time and Cost
$7,000 –
$6,000 –
Crash cost
$5,000 –
Crashed activity
Slope = crash cost per week
$4,000 –
$3,000 –
$2,000 –
Normal activity
Normal cost
$1,000 –
Normal time
Crash time
–
0
|
2
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|
4
|
6
|
8
|
10
|
12
|
14
Weeks
9-56
Project Crashing
ACTIVITY
1
2
3
4
5
6
7
NORMAL
TIME
(WEEKS)
CRASH
TIME
(WEEKS)
NORMAL
COST
12
8
4
12
4
4
4
7
5
3
9
1
1
3
$3,000
2,000
4,000
50,000
500
500
15,000
$5,000
3,500
7,000
71,000
1,100
1,100
22,000
$75,000
$110,700
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CRASH
COST
TOTAL
ALLOWABLE
CRASH TIME
(WEEKS)
5
3
1
3
3
3
1
CRASH
COST PER
WEEK
$400
500
3,000
7,000
200
200
7,000
9-57
$500
$7000
4
2
8
FROM …
$7000
12
7
4
1
Project Duration:
36 weeks
12
$400
3
4
$3000
6
4
5
4
$200
$200
$7000
$500
TO…
Project Duration:
31 weeks
Additional Cost:
$2000
$7000
12
7
4
1
7
$400
3
4
$3000
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4
2
8
5
4
6
4
$200
$200
9-58
Time-Cost Relationship
• Crashing costs increase as project duration
decreases
• Indirect costs increase as project duration
increases
• Reduce project length as long as crashing costs
are less than indirect costs
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9-59
Time-Cost Tradeoff
Minimum cost = optimal project time
Total project cost
Cost ($)
Indirect cost
Direct cost
Crashing
Time
Project duration
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9-60
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