Project Management 0

7/30/2019 Project Management 0

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PROJECT MANAGEMENT

PERT/CPM

MANAGEMENT SCIENCE

ByK. Venkaiah BabuMBA., (Ph D)

Science & Humanities Dept.,

Sri SarathiInstitute of Engineering & Technology


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LECTURE OUT LINE

I ntroduction to Project M anagement

To understand the project L ife Cycle

1. Project Planning 2. W B S

3. Project Scheduling 4. Project Control

To apply tools and technique's Gantt chart /& Mail stone chart

CPM

PERT & Probabilistic Activity Times

Project Crashing and Time-Cost Trade-of f

Describe how CPM / PERT have developed

and merged together to provide a useful

technique for managing projects.


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What is Project?

Definition:

Set of inter-related activities

Unique, one-time operation activity or effort to plan, implement, and control the management of

large, one time projects

Application:

Used in Construction, Shipbuilding, Weapons,Systems Development, etc.

Applies to uncertain technology projects

Applies to variable cost resource allocation


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Project Characteristics

Set of Activities

Single unit

Money & Time related

General purpose

High labor skills required


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Project Elements

Objective of Project Management

Scope (Limitations / Boundary)

Contract requirements

Schedules

Resources (Physical)

Personnel (Psychological)

Control

Risk and problem analysis


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Generic Project Life Cycle


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EXAMPLES OFPROJECTS


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Examples of Projects

Building construction


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New product introduction

9 Nude Sandalfoot

Medium to Tall (B)

No nonsense

New!

Improved!


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Training seminar


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New product introduction Training seminar

Research project


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Training seminar

Research project

S/W development

Planning concert, football games, or basketball

tournaments


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Project Scope

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

Work breakdown structure

breaks down a project into components,subcomponents, and activities


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What is Project Management? (PM)

PM is the application of knowledge, skills,

tools and techniques to project activities in

order to meet project requirements.

Project Management

is an art.

is a science. has a set of tools and methods.


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Effective Project Managers

Lead by example

Visionaries

Technically

competent

Decisive/pivotal

Good

communicators

Good motivators

Stand up to exertwhen necessary

Support team

members

Encourage new

ideas

Qualities of Project Manager:Project Manager is the most important member of project team


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Process of Project Management

Project Planning Project Scheduling

Project Control

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


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Mechanism of Planning

Define project objective (SMART)

Define work breakdown structure (WBS)

Identify tasks and subtasks -- deliverables

Lowest elementstand alone work package

Identify tasks relationship

Identify possible risks

Estimate work packages (people, time, etc.)

Create initial schedule

Iterate plan (Procedure)

Document


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Benefits of the Planning

Framework for communication Clients and coworkers

Allocate resources Personnel, equipment and facilities, budget

Benchmark to measure progress


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OBJECTIVES OF

PROJECT MANAGEMENT


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Objectives of Project

Management To complete project within elapsed time

To ensure optimum utilization ofavailable resources without delay

To complete a project with a minimum of

capital investment.


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PROJECT MANAGEMENT

PROCESS


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Project Management Process

Planning

Objectives

Resources

Work break-

down sched.

Organization


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Planning

Objectives

Resources

Work break-

down sched.

Organization

Scheduling

Project

activities Start &

end times

Network


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Planning

Objectives

Resources Work break-

down sched.

Organization

Scheduling

Project

activities Start &

end times

Network

Controlling

Monitor, compare,

revise, action


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PROJECT PLANNING


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Project Planning

Establishing objectives

Defining project

Creating work breakdown

structure (WBS)

Determining resources

Forming organization


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Work Breakdown Structure

(WBS) First Step in Project Management Begins with a Work Breakdown

Lists the WHAT of a Project

Begins with Finished Project

Consists of Tree Chart, with Each Branch Listing the WHATsat that Level

Then List Each Task that Must Be Completed toAccomplish the WHAT Start at top, progressively break work down into work packages Roll up the packages for bottom up estimating

Packages give clear work assignments

Splits work into manageable, logical packages

Make sure packages can be tested for completeness


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Top Down Decomposition, Elemental Tasks

` BUY A HOUSE

LOCATION FINANCINGFIND

HOUSE

1 - Criteria 3- Determine

affordability6

- Type of

House

2 - VisitLocations

4 - Determinemortgage

provider

7 - Find RealEstate

Agent

5

- Lockup

mortgage

commitment

8- Look for

House

9

- Make

Offer, P&S

Agreem't

10 - Closing

Ex: WBS Buy a House


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Project Organization


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Project Organization

Often temporary structure

Uses specialists from entire company

Headed by project manager

Coordinates activities

Monitors schedule

& costs

Permanent

structure called

matrix organization

Acct.

Eng. Eng.Mkt.

Mgr.


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PROJECT SCHEDULING


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Project Scheduling

Sequencing activities

Identifying precedence

relationships

Determining activity times

& costs

Estimating material &

worker requirements Determining critical

activities


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Project Scheduling Techniques

Gantt chart

Critical Path Method(CPM)

Program Evaluation &Review Technique (PERT)


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More popular Techniques of Network are:

CPM Critical Path Method

PERT Programme Evaluation and Review Method

LCS Least Cost Method

RAMS Resource Allocation and Multi-project Scheduling

MAP Manpower Allocation Procedure

RPSM Resource Planning and Scheduling Method

GERT Graphical Evaluation and Review Technique

Project Scheduling Techniques


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PROJECT CONTROL


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Project Control

Time management

Cost management

Quality management

Performance management Earned Value Analysis

a standard procedure for numericallymeasuring a projects progress, forecasting itscompletion date and cost and measuringschedule and budget variation

Communication

Enterprise project management

Periodical check list concerned with:


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GANTT CHART


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Gantt ChartGantt Chart was developed by

Henry Laurence Gantt (1861-1919) was a

mechanical engineer and management

consultant who is most famous for developing

the Gantt chart in the 1910s. These Gantt

charts were employed on major infrastructure

projects including the Hoover Dam andInterstate highway system. He refined

production control and cost control techniques.


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Example of Gantt Chart

| | | | |Activity

Design houseand obtainfinancing

Lay foundation

Order andreceivematerials

Build house

Select paint

Select carpet

Finish work

0 2 4 6 8 10

Month

Month

1 3 5 7 9


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Gantt Chart

Activities in Buy a House` BUY A HOUSE

LOCATION FINANCINGFIND

HOUSE

1 - Criteria 3- Determine

affordability6

- Type of

House

2- Visit

Locations4

- Determine

mortgage

provider

7

- Find Real

Estate

Agent

5

- Lockup

mortgage

commitment

8- Look for

House

9

- Make

Offer, P&S

Agreem't

10 - Closing

TASK PREDECESSOR

1-criteria 3

2-visit loc. 13-affordability

4-mortgage co 3

5-mortg lock 4

6-type of hse 1

7-real est agent 2, 6

8-look for hse 79-offer, P&S 5, 8

10-closing 9


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Gantt Chart

Buy a House

Simple Gantt Chart View

TASK PREDECESSOR

1-criteria 3

2-visit loc. 1

3-affordability

4-mortgage co 35-mortg lock 4

6-type of hse 1

7-real est agent 2, 6

8-look for hse 7

9-offer, P&S 5, 8

10-closing 9


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Limitations of Gantt Chart


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CPM & PERT


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CPM & PERT

Network techniques

Developed in 1950s

CPM by DuPont for chemical plants In 1957

suitable for Civil & Mechanical Projects PERT by U.S. Navy for Polaris missile in 1958

consulting with M/s Booz, Allen & Hamilton

Consider precedence relationships &interdependencies

Each uses a different estimate of activity

times


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CPM & PERT Steps

Identify activities

Determine sequence

Create network Determine activity times

Find critical path

Earliest & Latest start times

Earliest & Latest finish times

Slack or Float


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Completion date?

On schedule? Within budget?

Probability of completing by ...? (Duration) Critical activities?

Enough resources available?

How can the project be finished early at theleast cost?

Questions Answered by

PERT & CPM


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Constructing Networks

G hi l R i f


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Graphical Representation of

Events and Activities

Flow Charting - Uses Nodes and Arrows

Arrows

An arrow leads from tail to head directionally

Nodes

A node is represented by a circle or any

mathematical symbol

ArrowNode


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Activity On Node (AON)

Task is Represented by Node as the

Completion of an Activity

Arrows Represent the Sequential Linkages

Between Activities

For Example, Node 1 is Begin, Node 2 is

Complete Task 1, Node 3 is Complete Task 2

1 2 3


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Activity On Arrow (AOA)

Task is Represented by an Arrow Bounded

on Either End by a Node (Event)

Each Event is Identified by a Number

The Activity is Designated by the Leading

Event Number and the Following Event

Number - i.e. Activity 1 - 2

1 2

D i ti T k


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Designating Task

Relationships

Sequential vs. Concurrent Activities

1 2 3

1

2

3

4

Sequential Task Relationship

Concurrent Task Relationships

D i ti DUMMY


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Designating DUMMY

Activities

Represented by Dashed Arrows

Show Sequential Relationships Among

Tasks, but Take No time or Resources

1

2

3

4

Dummy Activity 2-3

indicates that both

Activities 1-2 and 2-3 must

be Completed beforebeginning Activity 3-4


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Network Terms

24 Years

Activity

(Arrow)

RegisterReceive

degree

Project: Obtain a college degree - B. Tech.

Event (Node)

Attend class,study etc.

1

Event (Node)


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Activity

Relationships


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Activity Relationships

1


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1 4

2

3

A

B

C

A must be done

before C & D can

beginD


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1 4

2

3

A

B E

C

B & C must be done

before E can begin

D


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1 4

2

3

A

B E

C

A must be done

before C & D can

begin

A & B can occur

concurrently

D

B & C must be done

before E can begin


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Dummy Activities

Activities are defined often by beginning &ending events

Example: Activity 2-3

Every activity must have unique pair ofbeginning & ending events

It is an imaginary activity

Consume no Time or ResourcesDummy activities maintain precedence or

logical sequence of activities.


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Dummy Activities

Example


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Dummy Activities Example

1 431-2

2-3

Incorrect

22-3

3-4


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Different activities;

same designation

1 43

1-2

2-3Incorrect

2 2-3

3-4


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Incorrect

1 42

3

51-2

2-3

2-4 4-5

3-4: Dummy

act iv i ty

Correct

1 43

1-2

2-3

2 2-3

3-4

Some more Example of Dummy


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Activities

ExI

A Printing invitation Cards

B Collection of Address

C Dispatching of Cards

2

1

3 4B

A

C

2-3: Dummy

act iv i ty



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Activities

ExII

If A & E are concurrent

B is after A & E and

F is after E

E

A

F

B

Labeling the Events by


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Labeling the Events by

Dr. Fulkersons Rules:

Numbering the events by DR. Fulkersons rules: There is a single initial event in the net work diagram. This

initial event will have arrows coming out of it and noneentering it. Number this initial event as 1.

Neglect all the arrows emerging out of the initial event

numbered 1. Doing so, it will apparently provide one or morenew initial events.

Number these apparently produced new initial events as 2, 3, 4 etc.

Again neglect all emerging arrows from these numbered

events. This will create few more initial evens. Follow rule3.

Continue this operation until the last event, which has noemerging arrows, is numbered.


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Numbering the Events

A

m n

o

p

q

r

s t

B

C

A G

D

F

I

H

J


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Network Example

Youre a project manager for Bechtel.

Construct the network.Activity Predecessors

A --B A

C A

D B

E BF C

G D

H E, F


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Network Example - AON

A

C

E

F

BD

G

H

Z

AOA


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Network Example - AOA

2

4

51

3 6 8

7 9

A

C F

EB

D

H

G

Activity Predecessors

A --

B AC A

D BE B

F CG D

H E, F

Rough arrow diagram


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2

4

51

3 6

7A

C F

EB

D

H

G

Network Example - AOA

Final Arrow Diagram


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C P M Technique - foretaste

Activity oriented technique Single Time estimation

Designed for repetitive projects

Not Statistically analyzed Demarcates critical activities

Dummy activities are not necessary

Employs words like arrow diagram, nodes andfloats etc

Suitable for industrial settings, plantmaintenance, civil construction projects etc.

Critical Path Analysis


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Example

EventID

Pred. DescriptionTime(Wks)

A None Prepare Site 1

B A Pour fdn. & frame 6C B Buy shrubs etc. 3

D B Roof 2

E D Do interior work 3F C Landscape 4

G F, E Move In 1



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Example

EventID

Acty.. DescriptionTime(Wks)

A 1 - 2 Prepare Site 1

B 2 - 3 Pour fdn. & frame 6C 3 - 4 Buy shrubs etc. 3

D 3 - 5 Roof 2

E 5 - 6 Do interior work 3F 4 - 6 Landscape 4

G 6 - 7 Move In 1

C i i A i


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2

4

5

1 3 6 7A.1

C.3 F.4

E.3

B.6

D.2

G.1


ExampleEventID

Acty..

A 1 - 2

B 2 - 3C 3 - 4

D 3 - 5

E 5 - 6

F 4 - 6

G 6 - 7Different paths from network:

1-2-3-4-6-7 - 15 (Critical Path)

1-2-3-5-6-7 - 13

Earliest Start Time &


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Finish Steps

Begin at starting event & work forward

EST = 0 for starting activities

EST is earliest start

EFT = EST + Activity time EFT is earliest finish

EST = Maximum EFT of all predecessors fornon-starting activities

Latest Start Time &


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Latest Start Time &

Finish Steps

Begin at ending event & work backward

LFT = Maximum EFT for ending activities

LFT is latest finish; EFT is earliest finish

LST = LFT - Activity time LST is latest start

LFT = Minimum LST of all successors fornon-ending activities.

Compute Earliest, Latest &


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Compute Earliest, Latest &

Slack durations.

Activity ES EF LS LF Slack

A 1-2 0 1 0 1 0

B 2-3 1 7 1 7 0C 3-4 7 10 7 10 0D 3-5 7 9 9 11 2E 5-6 9 11 11 14 3F 4-6 10 14 10 14 0G 6-7 14 15 12 15 0

Earliest LatestAct.Dura.

1

63

23

4

1


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PERT

&Time Estimates

i f


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Event oriented technique

Three time estimation

Use of dummy activities are required

representing the proper sequence A probabilistic model with uncertainty in

activity duration

Analyzed statistically Employs words Network diagram, events and

Slack etc

PERT Technique - foretaste


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Activity Time Estimates

CPM - One Time Estimate per Activity

PERT - Three Time Estimates per Activity

to = Optimistic Time Estimate

tm = Most Likely Time Estimate

tp = Pessimistic Time Estimate

Can Calculate Activity Mean Time Estimate

and Variance


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PERT Time Estimates

Activity Mean Time Estimate = te

Activity Variance Estimate = Sigmae

te = (to + 4tm + tp)/6

Sigmae = (tp - to)/6

Can Use Central Limit Theorem to Estimate Project Time


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21

Fid

Ft

t

Ff

E2

L2

E1

L1

Computing the Float value

Example Network Flow


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Diagram

7

6

5

4

3

2

1

B

A

E

C

D

G

F

H

I

J

Example Activity


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Example Activity

Characteristics

A 1-2 10 12 14 12 2/3

B 1-3 9 11 13 11 2/3

C 2-4 1 3 11 4 5/3

D 2-5 1 8 9 7 4/3

E 3-4 1 7 13 7 6/3

F 3-6 5 10 15 10 5/3

G 4-5 8 13 18 13 5/3

H 4-6 1 7 19 8 9/3

I 5-6 6 10 20 11 7/3

J 6-7 6 10 14 10 4/3

Activity a m b te Sigmae



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Diagram

7

6

5

4

3

2

1

te

=11

te

=12

te=7

te=7

te=13

te=10

te=8

te=11

te=10

te=4



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Finish Steps

Begin at starting event & work forward

EST = 0 for starting activities

EST is earliest start EFT = EST + Activity time

EFT is earliest finish

EST = Maximum EFT of all predecessors fornon-starting activities



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Diagram

7

6

5

4

3

2

1

te

=11

te

=12

te=7

te=7

te=13

te=10

te=8

te=11

te=10

te=4

ES=12

ES=52

ES=42

ES=31

ES=18

ES=11

ES=0

Latest Start Time &


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Latest Start Time &

Finish Steps

Begin at ending event & work backward

LFT = Maximum EFT for ending activities

LFT is latest finish; EFT is earliest finish LST = LFT - Activity time

LST is latest start

LFT = Minimum LST of all successors fornon-ending activities.

Example Activity


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Example Activity

Characteristics

1-2 10 12 14 12 2/3 0 2 12 14

1-3 9 11 13 11 2/3 0 0 11 11

2-4 1 3 11 4 5/3 12 14 16 18 2-5 1 8 9 7 4/3 12 24 19 31

3-4 1 7 13 7 6/3 11 11 18 18

3-6 5 10 15 10 5/3 11 32 21 42

4-5 8 13 18 13 5/3 18 18 31 31

4-6 1 7 19 8 9/3 18 34 26 42 5-6 6 10 20 11 7/3 31 31 42 42

6-7 6 10 14 10 4/3 42 42 52 52

to tm tp te Sigmae EST EFT LFTLST

Example Network Flow Diagram


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Example Network Flow Diagram

With Critical Path

7

6

5

4

3

2

1

t1-3=11

0|0|11|11

t1-2=12

0|2|12|14

t3-4=7

11|11|18|18

t2-5=7

12|24|19|31

t4-5=13

18|18|31|31

t3-6=10

11|32|21|42

t4-6=8

18|34 |26|42

t5-6=11

31|31|42|42

t6-7=10

42|42|52|52

t2-4=412|14|16|18

ES|LS|EF|LF

C ti th Fl t l


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21

Fid

Ft

t

Ff

E2

L2

E1

L1

Computing the Float value

Distinction between CPM & PERT


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Activity oriented technique.

It has one time estimate. Designed for repetitive projects.

Not statistically analyzed.

It demarcates critical activities.

It employs words like arrow

diagram, node, floats etc. Dummy activities are not

necessary.

Suitable for industrial settings,plant maintenance, civilconstruction projects.

A deterministic model with wellknown activities times based on

past experience.

Cost is not directly proportional totime and const is the controllingfactor.

Event oriented technique.

It has three time estimation. Suitable for non-repetitive

projects.

Analyzed statistically.

It does not demarcated critical andnon-critical activities.

It employs words like networkdiagram, events Slack etc.

Use of dummy activities arerequired representing the propersequence.

Suitable for defense projects and

R & D etc. Where activitiescannot be predicted.

A probabilistic model withuncertainty in activities duration

Cost varies directly with time andtime is the controlling factor.

C P M P E R T


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Benefits &

Limitationsof PERT/CPM

Benefits


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of PERT/CPM

Useful at many stages of project

management

Mathematically simple

Use graphical displays

Give critical path & slack time

Provide project documentation

Useful in monitoring costs and time

Limitations


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of PERT/CPM

Clearly defined, independent, & stable

activities

Specified precedence relationships

Activity times (PERT) follow

beta distribution

Subjective time estimates

Over emphasis on critical path

Conclusion


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Conclusion

Explained what a project is

Summarized the CPM / PERT project

activities and their time estimates

Drew project networks

Compared PERT & CPM

Determined slack & critical path Computed project probabilities


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Project Management

PERT/CPM

THE END

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Project Management 0