ELG/SEG2911: Professional Engineering Practice: Winter
Project Management Process:
Designing the Initial Project Management Plan
Reference Chapters (Textbook):
- Chapter 10: Project Management
- Chapter 11: Feasibility & Project Management
- What is Project Management
- Context of Project Management
- Tradeoffs in Project Management
- Project Management Techniques
Gantt Charts, PERT/CPM
- Feasibility and Project Management
+ Technical Feasibility
+ Economic Feasibility
+ Fiscal Feasibility
+ Compliance to Standards Feasibility
+ Social and Environmental Feasibility
Project Management is concerned with meeting the one-time goal for a specific
activity (project) of an organization. It involves the following tasks:
- Project Scheduling
- Project Execution
- Analysis of the Requirements: Size and Complexity
- Situational Analysis: (What is available)
+ Budget and costs
+ Technical Constraints
+ Quality and Standard constraints
+ Available Skill Set
+ Project review and auditing requirements
- Encapsulation of activities into Tasks
- Sequencing relationship between tasks
+ Functional sequencing
+ Resource related sequencing
- Development of Task activity graph
- Development of Resource assignement graph
- Timing of tasks
- Quanititative analysis of the graphs to determine the optimum schedule.
Using techniques such as PERT/CPM
- Resource Balancing
- Assignment to tasks to implementation agents
- Tracking progress
- Reallocating resources to meet the budget, timing, functionality and quality
Context of Project Management:
A Project Management Plan is a living document that needs constant updating
according to the current status of the product in its lifecycle.
Components of Project Management Process:
1. Project Human Resource Management
• Task assignment
2. Project Life-Cycle Management
Project Execution using one or more of the following:
• Waterfall Model
• V Model
• Spiral Model
• Prototyping Model
3. Project Scope Management
• Work Breakdown Structure
4. Project Time/Resource Specification and Analysis Methods
Is a list of activities/tasks to be completed
- Can be arranged into logical categories
- Need not be time sorted
- Shopping List, sorted according to store (sales offerings)
- Preparing for the Exams
- Car winterization check list
- Pilot’s Pre-Flight check list, sorted according to systems and
subsystems, e.g, Structure, Loading, Fuel, Avionics, Hydraulics..
- Test cases: Hardware and Software
• Time Line
Is a one diemensional time ordered list of milestones:
- Activities that are needed for achieving a milestone are not
- Sequencing of activities is also not specified
- Semester schedule: Assignments, Midterms, Reports, Finals
- Milestones and checkpoints in Project development
- Time ordered Test case list
• Gantt Chart
Is a two dimesional depiction of activties (tasks) with respect to time.
Developed in Germany in 1930s.
Activity 01 02 03 04 05 06 07 08 09 10 11
HW Design & Assembly
SW Debug & Redesign
HW/SW Integration Test
Release for Beta Test
- The activities are shown vertically while the time line is shown
- Time dependency between tasks can be shown.
- Functional dependency is not specified.
- Activities that can be done in parallel can be shown. This allows
for better project management and earlier completion.
- Progress can be shown by marking with a different colour the
- After analysis tasks on a Critical Path can be identified. These
tasks are important and the project cannot afford any delay on
their completion without paying the penalty of delaying the whole
• Graph based Methods:
Developed for managing the development of military equipment, e.g.
Polaris missile in 1950s.
- Functional Sequencing can be specified
- Timing sequencing (schedule) can be derived thtough analysis
- Identifying critical and non-critical tasks
- Determining time slacks
- Allocating resources to tasks
- Load Balancing
+ CPM: Critical Path Method
+ PERT: Project Evaluation and Review Technique
5. Project Quality Management
For ensuring quality targets are acheived , e.g.
Sigma-1 quality = 68.27% ~ 317 defects / 1000
Sigma-2 quality = 95.45% ~ 45 defects / 1000
Sigma-4 quality = 99.9937% ~ 6.3 defects / 1000
Sigma-6 quality = 99.9999998% ~ 2 defects / Billion
• Quality Assurance (Rules, Processes, Job Aids,Tools & Training)
• Quality Control (Monitoring and Corrective Action)
• Tools: Pareto Charts ( identifies high runners),
• Sampling Plan
• Defect Cause Analysis:
- Root Cause Documentation: Ishikawa’s Fishbone diagram
- Logical Relationship between faults: Fault Tree Diagram.
• Fault Prediction:
Fault Tree Analysis. To determine the probability of overall failure
given the probability of faults at the leaf nodes.
6. Project Risk Management
• Types of Risks: Technical, Quality, Cost, Time, People
• Risk avoidance
• Risk acceptance
• Risk effect mitigation (reduction of impact)
7. Project Cost Management
- Budget Control
- Burn Rate Control
- Trade-Offs: Costs vs Time, Functionality, Quality
8. Project Non-Human Resource Management
Machinery, Infrastructure, HW and SW Tools:
Scheduling, Purchasing, Procurement, Rentals, Licensing, Disposal, etc.
ENGINEERING & HIGH LEVEL
PLAN DESIGN PLAN
LIFE-CYCLE DETAILED DESIGN
UNIT TEST & HIGH LEVEL
HUMAN RES PLAN DESIGN PLAN
V & V and
SCOPE TIME DEMONSTRATION
MANAGEMENT MANAGEMENT PLAN
MANAGEMENT DEPLOYMENT PLAN
This problem can be viewed as an optimization problem between the following
variables. The interaction between these variables may be nonlinear.
1. CONTENT Functionality
2. PRODUCT QUALITY (Non-functional requirements)
- Performance and Reliability
- Standards compliance
3. SCHEDULE Time needed to complete the project
- Capital and Recurring budgets
- Number of Personnel
- Personnel Skill sets
that is actually
(Not to Scale)
MS Project: Graphing and Analysis Tool:
See Example on web notes:
VISIO: Graphing Tool
Visio Node Formats
Duration Task Name
Late Late Actual Actual
Start Finish Start Finish
Gant Chart is a bar chart in which the start and ending of each activity is shown
on a separate line along a horizontal time axis. The start of the line represents
activity start and its length of the line its duration. Dependencies between
activities are not specifically shown but these can be deduced.
Activity 01 02 03 04 05 06 07 08 09 10 11
Info Capture Sens, Acts
HW Design & Assembly
SW Debug & Redesign
HW/SW Integration Test
Release for Beta Test
Determining Critical Nodes and Paths:
Draw the Activity graph for the project. (You can use MS Project package)
Earliest Earliest Latest Latest Critical
Activity Dura- Start Completion Start Completion Slack Nodes
(1) (3) (4)=(3)+(2) (5) =(6) – (2) (6) (7)= (6) – (4) (8)
Start Node 0 0 0 0 0 0 Y
Req Analys 1 0 1 0 1 0 Y
Info Capture 1 1 2 1 2 0 Y
HL Design 1 2 3 2 3 0 Y
HW Design 2 3 5 6 8 3 N
SW Design 3 3 6 3 6 0 Y
SW Debug 2 6 8 6 8 0 Y
HW/SW Int 2 8 10 8 10 0 Y
Document 2 1 3 8 10 7 N
Doc Review 1 10 11 10 11 0 Y
End Node 0 11 11 11 11 0 Y
1. For each activity, unless already given, estimate completion time (most
likely, optimistic, pessimistic values)
Use Simpson’s Rule. Fill in columns 1 and 2 of the following table.
2. While observing the sequencing constraints specified in the PERT/CPM
Graph and using the following formulae
• Earliest Start Time of a Node =
MAX (Earliest Completion time of its Predecessors)
• Latest Completion Time of a Node =
MIN (Latest Start time of its Successors)
Compute all the times in the table, columns, 3, 4, 5 and 6.
3. Starting from the begin node and using the formula, calculate the Earliest
Start Times of each node and enter this in column 3. Add column 2 to 3 to
get column 4. Proceed downwards in the table.
4. The Latest completion of the Ending node will be the same as its Earliest
Completion Time. Enter this value in the Ending node’s cell in Column 6.
Compute Ending node’s Latest Start Time by subtracting column 2 from
5. Using the formula compute the Latest Completion times of the
predecessor(s) of the Ending node. Compute their Latest Start Times.
Proceeding upwards in the table complete columns 6 and 5.
6. For each node determine
Slack = Latest Start Time – Earliest Start Time
= Latest Completion Time – Earliest Completion Time
7. Identify the tasks that have non-zero slack. This means that these tasks
can be DELAYED by the amount of the slack without impacting the total
completion time of the project.
8. Identify tasks that have zero slack. These are the CRITICAL tasks. No delay
is permissible on these tasks, otherwise the project will be delayed.
9. Identify path(s) that connect the Critical tasks. Such path(s) are termed the
Critical Paths. (In an ideal situation all paths of PERT/CPM chart wll be
Critical, but this is seldom possible)
• Slack is defined as
(Latest Start - Earliest Start) =
(Latest Completion – Earliest Completion)
• The tasks with 0 slack are on the critical path (s)
• There can be more than one critical path in the graph
Determine node slacks and the critical path for the following activity graph,
B, 3 E, 5 K, L, 3
A, 2 C, 4 G, M, P, 1
D, 2 H, J, 6 N, 4 Q,
Activity Duration Earliest Earliest Latest Latest Slack Critical
(1) (2) Start Completion Start Completion (7) = (6) – (4) Nodes
(3) (4) =(3)+(2) (5) =(6) – (2) (6) (8)
Exercise 2: Using the algorithm, tabulate the PERT chart shown in
Figures 11, page 235. Determine the slacks for every node and
identify the Critical path.
Exercise 3: Repeat the same for Figure 12, page 236.
Exercise 4: Solve question 24, Figure 22, page 255.
The objective of analysing graphs and charts is to identify the critical path that
connects activities that must be started and completed at the specified timings.
Any delay will result in schedule lengthening or schedule slippage that can
impact the overall costs and also the business viability of the project (missing the
The critical path may change as the project progresses. Therefore there is a
constant need for re-evaluations. The project manager must ensure that all
activities on the critical path are completed on time.
Activities on the non-critical paths can be delayed in accordance with the free
period available, called slack. Activities on the critical path have zero slack and
on the non-critical path(s) the slack > 0.
Graphs can be analyzed using two techniques including
• Project Evaluation and Review Technique (PERT) (used for Polaris project)
• Critical Path Method (CPM)
In the case of PERT, the project manager has to estimate the average duration of
each activity. He may have the data for similar activities that have been
completed in the past. It is assumed that these numbers follow normal
distribution or a bell curve.
Another simpler averaging algorithm is based on most optimistic, most
pessimistic and most likely durations.
Average Duration = (Most_Optimistic + 4* Most_Likely + Most_Pessimistic) / 6
Example: Estimate the average duration of an activity for which
Most_Optimistic = 3 weeks
Most_Pessimistic = 10 weeks
Most_Likely = 8 weeks
Average Duration = (3 + 4*8 + 10) / 6 = 7.5 weeks
- Technical Feasibility
- Engineering Economics
- Economic Feasibility
- Fiscal Feasibility
- Compliance to Standards Feasibility
- Social and Environmental Feasibility
It basically tries to answer the question, “ Will it Work”?
- Is it mathematically justifiable?
- Are your assumptions justifiable?
- Have you selected proper material and technology?
- Has modelling and/or simulation been done?
- Is it doable with the existing skill set and tool set?
- Does the solution comply with relevant technical standards
- Can the product stand up to the worst case scenarios?
In order to prove that the project is economically feasible we have to
determine the Capital costs, the Running (Operations and
Maintenance) costs and the expected Return on investment (ROI).
The basic problem is that value of money, or its buying power decays
(depreciates) with time.
$100, ten year down the road, are not the same as $100 here and now.
All future dollars must be standardized (amortized) to the present
We have use basic mathematics in order to answer this question.
- What are the Capital Costs
- What are the Operations and Maintenance Costs
- What are the expected returns (Income)?
- Is the Income in the form of a lump sum, periodic or a
- When does the income start to come in?
- If the Income is periodic, what is the amount and what is
- How to standardize these to the present dollars?
+ Operations and Maintenance Costs
+ Income (Lump Sum, Periodic or combination)
a. Given the Future dollars n years from now, what is their
Present worth, if the annual depreciation rate is r.
P = F [1+ r] – n
This is an approximation of the ideal Compound Interest Law. If you want
to to be very precise use the following formula:
P = F e (– r * n)
e (– r * n) = Lt (1+ r/n) (– r *n) as n inf
This means we are charging and compounding interest at miniscule
intervals that approach zero, in other works we ask for interest to be paid
b. Given that the returns are received in equal amount
installments (A) spread over n years. Determine the
cumulative present worth.
P = A [ 1 / r – (1 / (r * (1 + r)n ) ) ]
Example: Which is preferable?
1. $ 180 per year for 6 years
2. $ 265 per year for 4 years
Assume r = 2.5%
In the 1st case the nominal value is 180 * 6 = $ 1080
In the 2nd case the nominal value is 265 * 4 = $ 1040
Prima facae, the first case id better, but this does not take
into consideration the depreciation of the buying power.
Using depreciation into account the the present worth is as
1st Case: $ 991
2nd Case: $ 997
c. Capital Recovery Factor (CRF) = A/P
1st Case: 180/991 = 0.1816
2nd Case: 265/997 = 0.2658
d. Sinking Fund Factor (SFF) = A/F
SFF = CRF / (1+r)n
This factor is useful when we have come up with a fixed amount after n
years (say $1 Million in 10 years) and we decide to put aside A dollars every
year. The annual amount is calculated by multiplying $1 Million with the
SFF available from the tables. With r of 4% the SFF is 0.08329. This means
that $832, 900 must be set aside yearly for 10 years in order to accumulate
Perform Economic Feasibility:
The basic objective is that the :
Benefit / Cost Ratio (in standardized dollars) > 1
Example: A semiconductor factory is considering to upgrade
its production line.
- The capital cost is $1.5 Million, (current dollars).
- The line will produce
+ $0.6 Million in year 3 (only once)
+ $1.0 Million is year 6 (only once)
(After that the line will be obsolete)
Is the proposal to buy the new production line
Present Value Analysis:
PV of $0.6 Million = $ 557,200
PV of $1.0 Million = $ 862,300
Total = $ 1,419,500
Comparing it with $1.5 Million.
Loss = $ 80,500
Benefit/Cost Ratio = $1.419 / $1.50
= 0.95 < 1 No way !!
Once we have justified the Technical and Economic Feasibility of the
project, the question remains as to how to raise the necessary capital
for the project?
This is specially true where the capital amount is significant and
beyond the reach of an ‘average’ engineer.
There are many ways for raising the capital.
- Venture Capital
- Joint Venture
- Bank Loans
Or a combination thereof.
Details analysis requires the services of qualified accountant(s) and
Example: Is setting up a franchise fiscally feasible?
(Subway, McDonalds, Mailboxes etc, Edward Jones, Fibre Cable
Network Maintenance, Cable TV, Cellular Phone etc.)
Feasibility of Miscellaneous Issues:
- Legal and Intellectual Property
- Social (Public Hearings)
- Political (Lobby groups)