2. 17-2
Learning Objectives
Discuss the behavioral aspects of projects
in terms of project personnel and the
project manager.
Discuss the nature and importance of a
work breakdown structure in project
management.
Give a general description of PERT/CPM
techniques.
Construct simple network diagrams.
3. 17-3
Learning Objectives
List the kinds of information that a PERT or
CPM analysis can provide.
Analyze networks with deterministic times.
Analyze networks with probabilistic times.
Describe activity “crashing” and solve
typical problems.
4. 17-4
Unique, one-time operations designed to
accomplish a specific set of objectives in a
limited time frame.
Build A
A Done
Build B
B Done
Build C
C Done
Build D
Ship
JAN FEB MAR APR MAY JUN
On time!
Projects
5. 17-5
Project Management
How is it different?
Limited time frame
Narrow focus, specific objectives
Less bureaucratic
Why is it used?
Special needs
Pressures for new or improves products or
services
6. 17-6
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
7. 17-7
Project Management
What are the Major Administrative Issues?
Executive responsibilities
Project selection
Project manager selection
Organizational structure
Organizational alternatives
Manage within functional unit
Assign a coordinator
Use a matrix organization with a project leader
8. 17-8
Project Management
What are the tools?
Work breakdown structure
Network diagram
Gantt charts
Risk management
9. 17-9
Planning and Scheduling
MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Locate new
facilities
Interview staff
Hire and train staff
Select and order
furniture
Remodel and install
phones
Move in/startup
Gantt Chart
10. 17-10
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
Key Decisions
15. 17-15
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
16. 17-16
The Network Diagram
Network (precedence) diagram – diagram of
project activities that shows sequential
relationships by the use of arrows and nodes.
Activity-on-arrow (AOA) – a network diagram
convention in which arrows designate activities.
Activity-on-node (AON) – a network diagram
convention in which nodes designate activities.
Activities – steps in the project that consume
resources and/or time.
Events – the starting and finishing of activities,
designated by nodes in the AOA convention.
17. 17-17
The Network Diagram (cont’d)
Path
Sequence of activities that leads from the starting
node to the finishing node
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
18. 17-18
Project Network – Activity on
Arrow
1
2
3
4
5 6
Locate
facilities
Order
furniture
Furniture
setup
Interview
Hire and
train
Remodel
Move
in
Figure 17.4
AOA
19. 17-19
Project Network – Activity on
Node
1
2
3
5
6
Locate
facilities
Order
furniture
Furniture
setup
Interview
Remodel
Move
in
4
Hire and
train
7
S
Figure 17.4
AON
24. 17-24
Network activities
ES: early start
EF: early finish
LS: late start
LF: late finish
Used to determine
Expected project duration
Slack time
Critical path
Computing Algorithm
25. 17-25
Probabilistic Time Estimates
Optimistic time
Time required under optimal conditions
Pessimistic time
Time required under worst conditions
Most likely time
Most probable length of time that will be
required
30. 17-30
Example 5 Time Estimates
4.00
d
5.0
e
7.0
f
4.00
b
6.0
h
Tabc = 10.0
Tdef = 16.0
Tghi = 13.50
31. 17-31
Path Probabilities
Z =
Specified time – Path mean
Path standard deviation
Z indicates how many standard deviations
of the path distribution the specified tine
is beyond the expected path duration.
33. 17-33
Time-cost Trade-offs: Crashing
Crash – shortening activity duration
Procedure for crashing
Crash the project one period at a time
Only an activity on the critical path
Crash the least expensive activity
Multiple critical paths: find the sum of
crashing the least expensive activity on
each critical path
36. 17-36
Advantages of PERT
Forces managers to organize
Provides graphic display of activities
Identifies
Critical activities
Slack activities 1
2
3
4
5 6
37. 17-37
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
1
2
3
4
5 6
142 weeks
38. 17-38
Goldratt’s Critical Chain
Goldratt’s insight on project management
Time estimates are often pessimistic
Activities finished ahead of schedule often go
unreported
With multiple projects, resources needed for one
project may be in use on another
39. 17-39
Computer aided design (CAD)
Groupware (Lotus Notes)
CA Super Project
Harvard Total Manager
MS Project
Sure Track Project Manager
Time Line
Project Management Software
40. 17-40
Imposes a methodology
Provides logical planning structure
Enhances team communication
Flag constraint violations
Automatic report formats
Multiple levels of reports
Enables what-if scenarios
Generates various chart types
Advantages of PM Software
41. 17-41
Risk: occurrence of events that have
undesirable consequences
Delays
Increased costs
Inability to meet specifications
Project termination
Project Risk Management
42. 17-42
Identify potential risks
Analyze and assess risks
Work to minimize occurrence of risk
Establish contingency plans
Risk Management
43. 17-43
Summary
Projects are a unique set of activities
Projects go through life cycles
PERT and CPM are two common
techniques
Network diagrams
Project management software available