6. Project Elements
• Objective
• Scope
• Contract requirements
• Schedules
• Resources
• Personnel
• Control
• Risk and problem analysis
Copyright 2011 John Wiley & Sons, Inc. 9-6
7. 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
Copyright 2011 John Wiley & Sons, Inc. 9-7
8. 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
Copyright 2011 John Wiley & Sons, Inc. 9-8
9. Work Breakdown Structure
• Work breakdown structure (WBS)
• Breaks a project into
components, subcomponents, activities, and
tasks
Copyright 2011 John Wiley & Sons, Inc. 9-9
10. Work Breakdown Structure for Computer Order
Processing System Project
Copyright 2011 John Wiley & Sons, Inc. 9-10
11. 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
Copyright 2011 John Wiley & Sons, Inc. 9-11
13. 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
Copyright 2011 John Wiley & Sons, Inc. 9-13
14. Project Scheduling
• Steps • Techniques
• Define activities • Gantt chart
• Sequence activities • CPM/PERT
• Estimate time • Software
• Develop schedule • Microsoft Project
Copyright 2011 John Wiley & Sons, Inc. 9-14
15. 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
Copyright 2011 John Wiley & Sons, Inc. 9-15
16. Example of Gantt Chart
Month
0 | 2 | 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
Copyright 2011 John Wiley & Sons, Inc. 9-16
17. 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
Copyright 2011 John Wiley & Sons, Inc. 9-17
18. Project Control
• Quality management
• Communication
• Enterprise project management
Copyright 2011 John Wiley & Sons, Inc. 9-18
19. 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
Copyright 2011 John Wiley & Sons, Inc. 9-19
20. Project Network
• Activity-on-node (AON)
• nodes represent activities Branch Node
• arrows show precedence 1 2 3
relationships
• Activity-on-arrow (AOA)
• arrows represent activities
• nodes are events for
points in time
• Event
• completion or beginning
of an activity in a project
Copyright 2011 John Wiley & Sons, Inc. 9-20
21. AOA Project Network for a House
3
Lay Dummy
foundation
2 0 Build Finish
3 1 house work
1 2 4 6 7
Design house Order and 3 1
and obtain receive 1 1
Select Select
financing materials paint carpet
5
Copyright 2011 John Wiley & Sons, Inc. 9-21
22. Concurrent Activities
• Dummy
• two or more activities cannot share same start and
end nodes
3
Lay foundation Lay
Dummy
foundation
2 0
2 3
1
Order material 2 4
Order material
(a) Incorrect precedence (b) Correct precedence
relationship relationship
Copyright 2011 John Wiley & Sons, Inc. 9-22
23. AON Network for House Building
Project
Lay Build
foundation house
Activity Number
2 4
Activity Time
2 3
Start 1 7
3 1
Finish work
Design house 3 5 6
and obtain
1 1 1
financing
Order &receive Select Select
materials paint carpet
Copyright 2011 John Wiley & Sons, Inc. 9-23
25. Activity Start Times
Start at 5 months
2 4
2 3 Finish at 9 months
Start 1 7
Finish
3 1
3 5 6
1 1 1
Start at 3 months Start at 6 months
Copyright 2011 John Wiley & Sons, Inc. 9-25
26. Node Configuration
Activity Earliest Earliest
number start finish
1 0 3
3 0 3
Activity Latest Latest
duration start finish
Copyright 2011 John Wiley & Sons, Inc. 9-26
27. 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
Copyright 2011 John Wiley & Sons, Inc. 9-27
28. Earliest Activity Start and Finish Times
Lay foundation
Build house
2 3 5
4 5 8
2
3 Finish work
1 0 3 7 8 9
Start
1 1
Design house
and obtain 6 6 7
financing 3 3 4
1
1 5 5 6
Select carpet
Order and 1
receive materials
Select paint
Copyright 2011 John Wiley & Sons, Inc. 9-28
29. 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
Copyright 2011 John Wiley & Sons, Inc. 9-29
30. Latest Activity Start and Finish Times
Lay foundation
Build house
2 3 5
4 5 8
2 3 5
3 5 8 Finish work
1 0 3 7 8 9
Start
1 0 3 1 8 9
Design house
and obtain 6 6 7
financing 3 3 4
1 6 7
1 4 5 5 5 6
Select carpet
Order and 1 6 7
receive materials
Select paint
Copyright 2011 John Wiley & Sons, Inc. 9-30
32. Probabilistic Time Estimates
• Beta distribution
• probability distribution traditionally used in CPM/PERT
a + 4m + b
Mean (expected time): t=
6
2
b-a
Variance: 2 = 6
where
a = optimistic estimate
m = most likely time estimate
b = pessimistic time estimate
Copyright 2011 John Wiley & Sons, Inc. 9-32
33. Examples of Beta Distributions
P(time)
P(time)
a m t b a t m b
Time Time
P(time)
a m=t b
Time
Copyright 2011 John Wiley & Sons, Inc. 9-33
34. Project with Probabilistic Time
Estimates
Equipment Equipment testing
installation and modification
1 4 System Final
6,8,10 2,4,12 training debugging
System 10
development 8
Manual 3,7,11 1,4,7
Start 2 testing Finish
3,6,9
5 11
Position 2,3,4 9 1,10,13
recruiting 2,4,6
Job Training System
3 6 System changeover
1,3,5 3,4,5 testing
Orientation
7
2,2,2
Copyright 2011 John Wiley & Sons, Inc. 9-34
35. Activity Time Estimates
TIME ESTIMATES (WKS) MEAN TIME VARIANCE
ACTIVITY a m b t б2
1 6 8 10 8 0.44
2 3 6 9 6 1.00
3 1 3 5 3 0.44
4 2 4 12 5 2.78
5 2 3 4 3 0.11
6 3 4 5 4 0.11
7 2 2 2 2 0.00
8 3 7 11 7 1.78
9 2 4 6 4 0.44
10 1 4 7 4 1.00
11 1 10 13 9 4.00
Copyright 2011 John Wiley & Sons, Inc. 9-35
39. CPM/PERT With OM Tools
Copyright 2011 John Wiley & Sons, Inc. 9-39
40. Probabilistic Network Analysis
Determine probability that project is
completed within specified time
x-
Z=
where
= tp = project mean time
= project standard deviation
x= proposed project time
Z= number of standard deviations that
x is from the mean
Copyright 2011 John Wiley & Sons, Inc. 9-40
41. Normal Distribution of Project Time
Probability
Z
= tp x Time
Copyright 2011 John Wiley & Sons, Inc. 9-41
42. Southern Textile
What is probability that project is completed within 30 weeks?
P(x 30 weeks)
x-
= 6.89 weeks
2 Z=
= 6.89 =
30 - 25
2.62
= 2.62 weeks
= 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
Copyright 2011 John Wiley & Sons, Inc. 9-42
43. Southern Textile
What is probability that project is completed within 22 weeks?
P(x 22 weeks) 0.3729
= 0.1271 x-
= 6.89 weeks
2 Z=
= 6.89 =
22 - 25
2.62
= 2.62 weeks
= -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
Copyright 2011 John Wiley & Sons, Inc. 9-43
44. Microsoft Project
• Popular software package for project
management and CPM/PERT analysis
• Relatively easy to use
Copyright 2011 John Wiley & Sons, Inc. 9-44
45. Microsoft Project
Click on “Tasks”
First step;
Start Date
Copyright 2011 John Wiley & Sons, Inc. 9-45
46. Microsoft Project
Click on “Format” then ”Timescale”
to scale Gantt chart.
Gantt chart;
Precedence click on “View”
Create precedence relationships to activate
relationships;
click on predecessor
activity, then
holding “Ctrl” Key,
click on successor
activity.
Copyright 2011 John Wiley & Sons, Inc. 9-46
47. Microsoft Project
Click on “View” then
Network Diagram
Critical path
in red
Copyright 2011 John Wiley & Sons, Inc. 9-47
49. Microsoft Project – Task Information
Enter % completion
Copyright 2011 John Wiley & Sons, Inc. 9-49
50. Microsoft Project – Degree of Completion
Activities 1, 2 and 3 Black bars show
100% complete degree of completion
Copyright 2011 John Wiley & Sons, Inc. 9-50
51. PERT Analysis with Microsoft Project
Click on PERT Entry
Sheet to enter 3
time estimates
Click on PERT
calculator to compute
activity duration
Copyright 2011 John Wiley & Sons, Inc. 9-51
52. PERT Analysis with Microsoft Project
Copyright 2011 John Wiley & Sons, Inc. 9-52
53. PERT Analysis with Microsoft Project
Copyright 2011 John Wiley & Sons, Inc. 9-53
54. 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
Copyright 2011 John Wiley & Sons, Inc. 9-54
55. Project Network – Building a House
2 4
12
8
7
1 4
12
6
3 5 4
4 4
Copyright 2011 John Wiley & Sons, Inc. 9-55
56. 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 – Normal activity
Normal cost
$2,000 –
$1,000 –
Crash time Normal time
– | | | | | | |
0 2 4 6 8 10 12 14 Weeks
Copyright 2011 John Wiley & Sons, Inc. 9-56
57. Project Crashing
TOTAL
NORMAL CRASH ALLOWABLE CRASH
TIME TIME NORMAL CRASH CRASH TIME COST PER
ACTIVITY (WEEKS) (WEEKS) COST COST (WEEKS) WEEK
1 12 7 $3,000 $5,000 5 $400
2 8 5 2,000 3,500 3 500
3 4 3 4,000 7,000 1 3,000
4 12 9 50,000 71,000 3 7,000
5 4 1 500 1,100 3 200
6 4 1 500 1,100 3 200
7 4 3 15,000 22,000 1 7,000
$75,000 $110,700
Copyright 2011 John Wiley & Sons, Inc. 9-57
59. Time-Cost Relationship
• Crashing costs increase as project duration
decreases
• Indirect costs increase as project duration
increases
• Reduce project length as long as crashing costs
are less than indirect costs
Copyright 2011 John Wiley & Sons, Inc. 9-59
60. Time-Cost Tradeoff
Minimum cost = optimal project time
Total project cost
Indirect cost
Cost ($)
Direct cost
Crashing Time
Project duration
Copyright 2011 John Wiley & Sons, Inc. 9-60
61. Copyright 2011 John Wiley & Sons, Inc.
All rights reserved. Reproduction or translation of this
work beyond that permitted in section 117 of the 1976
United States Copyright Act without express permission
of the copyright owner is unlawful. Request for further
information should be addressed to the Permission
Department, John Wiley & Sons, Inc. The purchaser
may make back-up copies for his/her own use only and
not for distribution or resale. The Publisher assumes no
responsibility for errors, omissions, or damages caused
by the use of these programs or from the use of the
information herein.
Copyright 2011 John Wiley & Sons, Inc. 6-61
