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Project Management
Chapter 16
What is a project?

A one-time set of related tasks that
produce a major output and usually
 Involves
many tasks
 Requires significant investment
 Uses significant inputs
 Has some tasks must be completed before
others can be started
 Is strategically important to the firm
Examples of Projects
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Starting a new business
Designing and launching a new product or model
Evaluating a merger or acquisition
Opening a new facility
Designing new equipment
Selecting and installing new software
Writing a new human resources manual
Construction or major renovations
Project Requirements
Superior quality
 Completed on time
 Completed within budget

Five Project Life Cycle Phases
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Conception: identify the need
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Feasibility analysis or study: costs
benefits, and risks
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Planning: who, how long, what to do?
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Execution: doing the project
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Termination: ending the project
Network Planning Techniques
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Program Evaluation & Review Technique (PERT):
 Developed to manage the Polaris missile project
 Many tasks pushed the boundaries of science &
engineering (tasks’ duration = probabilistic)
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Critical Path Method (CPM):
 Developed to coordinate maintenance projects in
the chemical industry
 A complex undertaking, but individual tasks are
routine (tasks’ duration = deterministic)
Both PERT and CPM
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Graphically display the precedence
relationships & sequence of activities
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Estimate the project’s duration
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Identify critical activities that cannot be
delayed without delaying the project
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Estimate the amount of slack associated with
non-critical activities
Network Diagrams
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Activity-on-Node (AON):
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Uses nodes to represent the activity
 Uses arrows to represent precedence relationships