2OBJECTIVES Definition of Project Management Work Breakdown Structure Project Control Charts Structuring Projects Critical Path Scheduling
3 Project Management Defined Project is a series of related jobs usually directed towards some major output and requiring a significant period of time to perform Project Management are the management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project
4 Introduction to Project Management Definition of Project Management – A project can be defined as a group of tasks – which helps in achieving an objective – A Project : undertaken to solve a problem. – Project Management – the process of planning, directing and controlling resources to meet the technical, cost and time considerations of a project. – Project Management – as a Conversion Process.
5 The Definition of a “PROJECT”• Purpose – Usually a one-time activity with a well-defined set of desired end result.• Life Cycle- From a slow beginning they progress to a buildup of size, then peak, finally terminate.• Interdependencies- Projects always interact with the parent organization’s standard, ongoing operations.• Uniqueness - Every Project has some elements that are unique. (No two Construction or R & D projects are precisely alike.)
6 Project Vs. Routine Activities Project is a one time activity It involves large investments No revenue till the project is completed High degree & Wide variety of skills are used. Involves experts from various divisions of the company, consultants & a number of contractors. A systematic approach to problem solving – special techniques used. Usage of special purpose equipments – in some cases Deals with planning, scheduling, controlling simuttaneously with the objective of timely completion of the project.
7Pure ProjectA pure project is where a self-contained teamworks full-time on the projectStructuring Projects / Pure Project: Advantages The project manager has full authority over the project Team members report to one boss Shortened communication lines Team pride, motivation, and commitment are high
8 Structuring Projects / Pure Project: Disadvantages Duplication of resources Organizational goals and policies are ignored Lack of technology transfer Team members have no functional area "home"
9 Functional Project A functional project is housed within a functional division President Research and Engineering Manufacturing DevelopmentProject Project Project Project Project Project Project Project Project A B C D E F G H I Example, Project “B” is in the functional area of Research and Development.
10 Structuring Projects Functional Project : Advantages A team member can work on several projects Technical expertise is maintained within the functional area The functional area is a “home” after the project is completed Critical mass of specialized knowledge
Structuring Projects 11 Functional Project: Disadvantages Aspects of the project that are not directly related to the functional area get short-changed Motivation of team members is often weak Needs of the client are secondary and are responded to slowly
12 Matrix Project / Organisation Structure President Research and Engineering Manufacturing Marketing DevelopmentManagerProject AManagerProject BManagerProject C
13 Structuring Projects / Matrix: Advantages Enhanced communications between functional areas Pinpointed responsibility Duplication of resources is minimized Functional “home” for team members Policies of the parent organization are followed
14 Structuring Projects / Matrix: Disadvantages Too many bosses Depends on project manager’s negotiating skills Potential for sub-optimization
15 Gantt ChartVertical Axis:Always Activities Horizontal bars used to denote lengthor Jobs of time for each activity or job. Activity 1 Activity 2 Activity 3 Activity 4 Activity 5 Activity 6 Time Horizontal Axis: Always Time
16 Work Breakdown StructureA work breakdown structure defines the hierarchy ofproject tasks, subtasks, and work packages Level Program 1 Project 1 Project 2 2 Task 1.1 Task 1.2 3 Subtask 1.1.1 Subtask 1.1.2 4 Work Package 22.214.171.124 Work Package 126.96.36.199
17 Networ k Dia g rams1/2/3/4/5 are EventsA/B/C/D/E are Activities.
19 Network-Planning Models A project is made up of a sequence of activities that form a network representing a project The path taking longest time through this network of activities is called the “critical path” The critical path provides a wide range of scheduling information useful in managing a project Critical Path Method (CPM) helps to identify the critical path(s) in the project networks
20 Prerequisites for Critical Path MethodologyA project must have: well-defined jobs or tasks whose completion marks the end of the project; independent jobs or tasks; and tasks that follow a given sequence.
Types of Critical Path 21 Methods CPM with a Single Time Estimate – Used when activity times are known with certainty – Used to determine timing estimates for the project, each activity in the project, and slack time for activities CPM with Three Activity Time Estimates – Used when activity times are uncertain – Used to obtain the same information as the Single Time Estimate model and probability information Time-Cost Models – Used when cost trade-off information is a major consideration in planning – Used to determine the least cost in reducing total project time
22 Steps in the CPM with Single Time Estimate 1. Activity Identification 2. Activity Sequencing and Network Construction 3. Determine the critical path – From the critical path all of the project and activity timing information can be obtained
23 CPM with Single Time Estimate Consider the following consulting project:Activity Designation Immed. Pred. Time (Weeks)Assess customers needs A None 2Write and submit proposal B A 1Obtain approval C B 1Develop service vision and goals D C 2Train employees E C 5Quality improvement pilot groups F D, E 5Write assessment report G F 1Develop a critical path diagram and determinethe duration of the critical path and slack timesfor all activities.
24 First draw the networkAct. Imed. Pred. Time A None 2 B A 1 C B 1 D C 2 E C 5 F D,E 5 D(2) G F 1 A(2) B(1) C(1) F(5) G(1) E(5)
25Determine early starts and early finish times ES=4 EF=6 ES=0 ES=2 ES=3 D(2) ES=9 ES=14 EF=2 EF=3 EF=4 EF=14 EF=15 A(2) B(1) C(1) F(5) G(1) ES=4 EF=9 Hint: Start with ES=0 and go forward in the E(5) network from A to G.
Determine 26 late starts Hint: Start with LF=15 and late or the total time of the project and gofinish times ES=4 backward in the EF=6 network from G to A. ES=0 ES=2 ES=3 D(2) ES=9 ES=14 EF=2 EF=3 EF=4 LS=7 EF=14 EF=15 LF=9 A(2) B(1) C(1) F(5) G(1) ES=4 LS=0 LS=2 LS=3 EF=9 LS=9 LS=14 LF=2 LF=3 LF=4 LF=14 LF=15 E(5) LS=4 LF=9
28 Program Evaluation & Review Technique (PERT) PERT is Event oriented & CPM is Activity oriented. PERT is used to deal unit uncertainty. PERT has 3 time estimates – Optimistic time – Most likely time. – Pessimistic time. PERT has one or more activities follow a probability distribution – taking into account the uncertainty of the situation. PERT network provides a measure of the probability of project completion by the scheduled date. The probability concept – Only associated with PERT and not CPM. (time estimates in CPM are deterministic & not probabilistic)
29Example 2. CPM with Three Activity Time Estimates Immediate Task Predecesors Optimistic Most Likely Pessimistic A None 3 6 15 B None 2 4 14 C A 6 12 30 D A 2 5 8 E C 5 11 17 F D 3 6 15 G B 3 9 27 H E,F 1 4 7 I G,H 4 19 28
30 Example 2. Expected Time Calculations ET(A)= 3+4(6)+15 Immediate Expected 6Task Predecesors Time A None 7 ET(A)=42/6=7 B None 5.333 C A 14 Immediate Task Predecesors Optimistic Most Likely Pessimistic D A 5 A None 3 6 15 E C 11 B C None A 2 6 4 12 14 30 F D 7 D A 2 5 8 E C 5 11 17 G B 11 F D 3 6 15 H E,F 4 G B 3 9 27 H E,F 1 4 7 I G,H 18 I G,H 4 19 28 Opt. Time + 4(Most Likely Time) + Pess. TimeExpected Time = 6
31 Ex. 2. Expected Time Calculations Immediate Expected ET(B)= 2+4(4)+14Task Predecesors Time 6 A None 7 B None 5.333 ET(B)=32/6=5.333 C A 14 D A 5 Immediate E C 11 Task Predecesors Optimistic Most Likely Pessimistic A None 3 6 15 F D 7 B None 2 4 14 G B 11 C D A A 6 2 12 5 30 8 H E,F 4 E C 5 11 17 F D 3 6 15 I G,H 18 G B 3 9 27 H E,F 1 4 7 I G,H 4 19 28 Opt. Time + 4(Most Likely Time) + Pess. TimeExpected Time = 6
Ex 2. Expected Time 32 Calculations Immediate Expected ET(C)= 6+4(12)+30Task Predecesors Time A None 7 6 B None 5.333 C A 14 ET(C)=84/6=14 D A 5 E C 11 Immediate Task Predecesors Optimistic Most Likely Pessimistic F D 7 A None 3 6 15 G B 11 B C None A 2 6 4 12 14 30 H E,F 4 D A 2 5 8 E C 5 11 17 I G,H 18 F D 3 6 15 G B 3 9 27 H E,F 1 4 7 I G,H 4 19 28 Opt. Time + 4(Most Likely Time) + Pess. TimeExpected Time = 6
33 Example 2. Network Duration = 54 Days C(14) E(11)A(7) H(4) D(5) F(7) I(18) B G(11)(5.333)
34 Example 2. Probability ExerciseWhat is the probability of finishing this project inless than 53 days? p(t < D) D=53 t TE = 54 D - TE Z = ∑ σ cp 2
35 Pessim. - Optim. 2 Activity variance, σ = ( 2 ) 6 Task Optimistic Most Likely Pessimistic Variance A 3 6 15 4 B 2 4 14 C 6 12 30 16 D 2 5 8 E 5 11 17 4 F 3 6 15 G 3 9 27 H 1 4 7 1 I 4 19 28 16(Sum the variance along the critical ∑ σ 2 = 41path.)
36 p(t < D) t D=53 TE = 54 D - TE 53- 54 Z = = = -.156 ∑σ cp 2 41p(Z < -.156) = .438, or 43.8 % (NORMSDIST(-.156)There is a 43.8% probability that this project will becompleted in less than 53 weeks.
37Ex 2. Additional Probability Exercise What is the probability that the project duration will exceed 56 weeks?
38 Example 2. Additional Exercise Solution p(t < D) t TE = 54 D=56 D - TE 56 - 54 Z = = = .312 ∑σ cp 2 41p(Z > .312) = .378, or 37.8 % (1-NORMSDIST(.312))
39 Time-Cost Models Basic Assumption: Relationship between activity completion time and project cost Time Cost Models: Determine the optimum point in time-cost tradeoffs – Activity direct costs – Project indirect costs – Activity completion times
40 Networ k Crashing (Project Determine the timeCrashing) each activity in the – cost ratio for network – this ratio represents the increase in cost for a unit decrease in time. Time – Cost Ratio = crash cost – normal cost normal time – crash time Identify the activities on critical path & select that activity which has smallest time cost ratio – crash that activity to the extent possible. Observe any change in the critical path – any other path becomes critical – calculate time cost ratio in the new critical path. Repeat above steps – till the activities are crashed to reduce the present duration to the desired time period.
CPM Assumptions / 41 Limitations Project activities can be identified as entities (There is a clear beginning and ending point for each activity.) Project activity sequence relationships can be specified and networked Project control should focus on the critical path The activity times follow the beta distribution, with the variance of the project assumed to equal the sum of the variances along the critical path
42 Question BowlWhich of the following are examples of Graphic Project Charts?b. Ganttc. Bard. Milestonee. All of the abovef. None of the aboveAnswer: d. All of the above
43 Question BowlWhich of the following are one of the three organizational structures of projects?b. Purec. Functionald. Matrixe. All of the abovef. None of the aboveAnswer: d. All of the above
44 Question BowlA project starts with a written description of the objectives to be achieved, with a brief statement of the work to be done and a proposed schedule all contained in which of the following?b. SOWc. WBSd. Early Start Schedulee. Late Start Schedulef. None of the aboveAnswer: a. SOW (or Statement of Work)
45 Question Bowl For some activities in a project there may be some leeway from when an activity can start and when it must finish. What is this period of time called when using the Critical Path Method?b. Early start timec. Late start timed. Slack timee. All of the abovef. None of the above Answer: c. Slack time
46 Question BowlHow much “slack time” is permitted in the “critical path” activity times?b. Only one unit of time per activityc. No slack time is permittedd. As much as the maximum activity time in the networke. As much as is necessary to add up to the total time of the projectf. None of the aboveAnswer: b. No slack time is permitted (Allcritical path activities must have zero slacktime, otherwise they would not be critical tothe project completion time.)
47 Question BowlWhen looking at the Time-Cost Trade Offs in the Minimum-Cost Scheduling time-cost model, we seek to reduce the total time of a project by doing what to the least-cost activity choices? Answer: a. Crashingb. Crashing them them (We “crash” thec. Adding slack time least-cost activityd. Subtracting slack time times to seek a reducede. Adding project time total time for thef. None of the above entire project and we do it step-wise as inexpensively as possible.)