Lecture

3

Project Scheduling CP - Chapter 10

1

Project Management

 How is it different?

 Limited time frame  Narrow focus, specific objectives  Why is it used?

 Special needs  Pressures for new or improves products or services

2

 Definition of a project  Unique, one-time sequence of activities designed to accomplish a specific set of objectives in a limited time frame

3

Project Management

 What are the Key Metrics  Time  Cost  Performance objectives  What are the Key Success Factors?

 Top-down commitment  Having a capable project manager  Having time to plan  Careful tracking and control  Good communications

4

Project Management

 What are the tools?

 Work breakdown structure  Network diagram  Gantt charts  Risk management

5

Project Manager

Responsible for: Work Human Resources Communications Quality Time Costs

6

Key Decisions

 Deciding which projects to implement  Selecting a project manager  Selecting a project team  Planning and designing the project  Managing and controlling project resources  Deciding if and when a project should be terminated

7

Ethical Issues

 Temptation to understate costs  Withhold information  Misleading status reports  Falsifying records  Compromising workers’ safety  Approving substandard work  http://www.pmi.org/

8

PERT and CPM

PERT

: Program Evaluation and Review Technique

CPM

: Critical Path Method   Graphically displays project activities Estimates how long the project will take  Indicates most critical activities  Show where delays will not affect project  PERT and CPM have been used to plan, schedule, and control a wide variety of projects:  R&D of new products and processes  Construction of buildings and highways   Maintenance of large and complex equipment Design and installation of new systems

9

PERT/CPM

 PERT/CPM  used to plan the scheduling of individual activities that make up a project.

 Projects may have as many as several thousand activities.

 Complicating factor in carrying out the activities  some activities depend on the completion of other activities before they can be started.

PERT/CPM

10

 Project managers rely on PERT/CPM to help them answer questions such as:  What is the total time to complete the project?

 What are the scheduled start and finish dates for each specific activity?

 Which activities are critical?

 must be completed exactly as scheduled to keep the project on schedule?

 How long can non-critical activities be delayed  before they cause an increase in the project completion time?

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Planning and Scheduling Activity

Locate new facilities Interview staff Hire and train staff Select and order furniture Remodel and install phones Furniture setup Move in/startup

0 2 4 6 8 10 12 14 16 18 20

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Project Network

 Project network  constructed to model the precedence of the activities.  Nodes represent activities  Arcs represent precedence relationships of the activities  Critical path for the network  a path consisting of activities with zero slack

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Project Network – An Example

8 weeks Locate facilities 6 weeks Order furniture B 3 weeks Furniture setup S A 11 weeks Remodel F E G Move in 1 week 4 weeks Interview C 9 weeks Hire and train D

Management Scientist Solution

Critical Path

Path A-B-F-G A-E-G C-D-G

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Length (weeks) 18 20 14 Slack 2 0 6

Uncertain Activity Times

 Three-time estimate approach   the time to complete an activity assumed to follow a Beta distribution An activity’s mean completion time is:

15 t

= (

a

+ 4

m

+

b

)/6 

a

= the optimistic completion time estimate 

b

= the pessimistic completion time estimate  

m

= the most likely completion time estimate An activity’s completion time variance is  2 = ((b-a)/6) 2

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Uncertain Activity Times

 In the three-time estimate approach, the critical path is determined as if the mean times for the activities were fixed times.  The overall project completion time is assumed to have a normal distribution  with mean equal to the sum of the means along the critical path, and  variance equal to the sum of the variances along the critical path.

Activity A B C I J K D E F G H

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Immediate Predecessor - - A A A B,C B,C E,F E,F D,H G,I Optimistic Time (a) 4 1 3 4 0.5

3 1 5 2 2.5

3

Example

Most Likely Time (m) 6 4.5

3 5 1 4 1.5

6 5 2.75

5 Pessimistic Time (b) 8 5 3 6 1.5

5 5 7 8 4.5

7

18

Management Scientist Solution

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Key Terminology

 Network activities  ES: early start  EF: early finish  LS: late start  LF: late finish  Used to determine  Expected project duration  Slack time  Critical path

The Network Diagram (cont’d)

 Path  Sequence of activities that leads from the starting node to the finishing node  AON path: S-1-2-6-7  Critical path  The longest path; determines expected project duration  Critical activities  Activities on the critical path  Slack  Allowable slippage for path; the difference the length of path and the length of critical path

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Computing Algorithm

 Network activities  ES: early start  EF: early finish  LS: late start  LF: late finish  Used to determine  Expected project duration  Slack time  Critical path

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Advantages of PERT

 Forces managers to organize  Provides graphic display of activities  Identifies  Critical activities  Slack activities 2 4 1 5 3 6

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Limitations of PERT

 Important activities may be omitted  Precedence relationships may not be correct  Estimates may include a fudge factor  May focus solely on critical path