Operations5

473.31

Fall 2015

Bruce Duggan

Providence University College

Summary

Want to understand:• the different organizational structures of projects• the purpose of a work breakdown structure• the uses of a critical path• how projects can be shortened through the use of crashing concepts

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Key Questions

What is project management?

What are the three ways a project can be structured within an organization?

What is the correct hierarchy for:

• a task

• a program

• a work package

• a project

• a subtask?

How would you assess a partially completed project that to date has spent more than planned but has accomplished more work than planned?

Which path is the critical path for a project? Can there be more than one?

How can I determine the probability of completing a project on time when I’m not sure how long the activities will take?

If we have to speed up a project, which activity is the best one to assign more resources to?

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Project Management Definitions

A Project is a series of related jobs usually directed toward some major output and requiring a significant period of time to perform

Project Management refers to the management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project

LO1

Types of Project Organization StructuresPure Project

• a structure for organizing a project where a self-contained team works full-time on a project

Functional Project• a structure where team members are assigned from functional units of the

organization

Matrix Project• is a structure that blends the functional and pure project structures

LO2

Pure Project

Advantages:• project manager has full authority

over the project

• team members report to one boss

• lines of communication are shortened

• team pride, motivation, and commitment are high

Disadvantages:• duplication of resources

• organizational goals and policies ignored

• lack of technology transfer.

• team members have no functional area “home”

LO2

Functional Project

A functional project is housed within a functional division.

Functional Project

Advantages:• team member can work on several

projects

• technical expertise is maintained within a functional area

• functional area is a “home” after project is completed

• there’s a critical mass of specialized knowledge

Disadvantages:• aspects of the project 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

Matrix Project

blends properties of functional and pure project structures

Matrix Project

Advantages:• communication between functional

divisions enhanced.

• a project manager is held responsible for successful completion of the project

• team members have a functional home after the project completion

• policies of the parent organization are followed

Disadvantages:• there are two bosses

• project may be doomed to failure unless the project manager has strong negotiation skills

• suboptimization is a danger

Work Breakdown Structure

Work breakdown structure = the hierarchy of project tasks, subtasks, and work packages.

• Task is a further subdivision of a project.• Subtask further divides the project into more meaningful pieces.• Work package is a group of activities to be assignable to a single

organizational unit.

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Work Breakdown Structure

Project Control Charts

Tracking Progres Gantt Chart

Activity 1Activity 2Activity 3Activity 4Activity 5Activity 6

time horizontal axis is always time

horizontal bars show length of

time for each activityVertical axis is always activities

Earned Value Management

Network-Planning Models

• a project is made up of a sequence of activities that form a network

• 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

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Types of Network Planning Models

Critical Path Method (CPM)• used when activity times are

known with certainty

• used to determine • timing estimates for the project

• Time estimates for each activity in the project

• slack time for activities

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

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Critical Path Method (CPM)

1. Identify each activity to be done in the project • and estimate how long it will take to complete

2. Determine the required sequence of activities • and construct a network reflecting the precedence relationships

3. Determine the critical path4. Determine the schedule with, for each activity:

• early start• early finish • late start• late finish

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Critical Path Method (CPM)

1. Identify each activity to be done in the project • and estimate how long it will take to complete

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task Stock Analysis

A. Select a company.

B. Obtain the company’s annual report and perform a ratio analysis.

C. Collect technical stock price data and construct charts.

D. Individually review the data and make a decision on whether to buy the stock.

Critical Path Method Example

2. Determine the required sequence of activities • and construct a network reflecting the precedence relationships

Critical Path Method Example

3. Determine the critical path

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Critical Path Method Example

4. Determine the schedule with, for each activity:• early start• early finish • late start• late finish

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Critical Path Method Example

4. Determine the schedule with, for each activity:• early start• early finish • late start• late finish

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Activity Time Uncertainty

Time-Cost (Crash) Models

Extension of CPM that considers the trade-off between the time required to complete an activity and cost.

• Referred to as “crashing” the project.

Crashing Process:1. Prepare a CPM-type diagram. 2. Determine the cost per unit of

time to expedite each activity.3. Compute the critical path.4. Shorten the critical path at the

least cost.5. Plot project direct, indirect, and

total-cost curves and find the minimum-cost schedule.

Time-Cost Trade-Off Procedure

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Time-Cost Trade-Off Procedure

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Time-Cost Trade-Off Procedure

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End of Chapter 5