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PROJECT MANAGEMENT

Building construction

© 1995 Corel Corp.

An Example

Project OrganizationWorks Best When

Work can be defined with a specific goal and deadlineThe job is unique or somewhat unfamiliar to the existing organizationThe work contains complex interrelated tasks requiring specialized skillsThe project is temporary but critical to the organization

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Project Planning, Scheduling,and Controlling

Project Planning1. Setting goals2. Defining the project3. Tying needs into timed project

activities4. Organizing the team

Project Scheduling1. Tying resources to specific

activities2. Relating activities to each other3. Updating and revising on a

regular basis

Time/cost estimatesBudgetsEngineering diagramsCash flow chartsMaterial availability details

CPM/PERTGantt chartsMilestone chartsCash flow schedules

Project Controlling1. Monitoring resources, costs, quality,

and budgets2. Revising and changing plans3. Shifting resources to meet demands

Reports• budgets• delayed activities• slack activities

Before Project During Project

Establishing objectivesDefining projectCreating work breakdown structure Determining resourcesForming organization

© 1995 Corel Corp.

Project Planning

Work Breakdown Structure

1. Project2. Major tasks in the project3. Subtasks in the major tasks4. Activities (or work packages) to

be completed

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Identifying precedence relationships Sequencing activitiesDetermining activity times & costsEstimating material & worker requirementsDetermining critical activities

© 1995 Corel Corp.

JF

M AM J J

MonthActivity

Design

Build

Test

PERT

Project Scheduling

Gantt chartCritical Path Method (CPM)Program Evaluation & Review Technique (PERT)

© 1984-1994 T/Maker Co.

Project Management Techniques

J F M A M J JTime Period

Activity

Design

Build

Test

Gantt Chart

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Service Activities for A Delta Jet During a 60 Minute Layover

Network techniquesDeveloped in 1950’s

CPM by DuPont for chemical plants (1957)PERT by Booz, Allen & Hamilton with the U.S. Navy, for Polaris missile (1958)

Consider precedence relationships and interdependenciesEach uses a different estimate of activity times

PERT and CPM

Milwaukee General Hospital’s Activities and Predecessors

F, GInspect and testH

D, EInstall air pollution deviceG

CInstall pollution control systemF

CBuild high-temperature burnerE

A, BPour concrete and install frameD

AConstruct collection stackC

-Modify roof and floorB

-Build internal componentsA

Immediate Predecessors

DescriptionActivity

5

Start

A

B

C

D

E

F

G

H

F, GInspect and testHD, EInstall air pollution deviceG

CInstall pollution control systemFCBuild high-temperature burnerE

A, BPour concrete and install frameDAConstruct collection stackC-Modify roof and floorB-Build internal componentsA

Immediate Predecessors

DescriptionActivity

Latest Start and Finish Steps

Latest Finish

ES

LS

EF

LF

Earliest Finish

Latest Start

Earliest Start

Activity Name

Activity Duration

Provides activity informationEarliest (ES) & latest (LS) startEarliest (EF) & latest (LF) finishSlack (S): Allowable delay

Identifies critical pathLongest path in networkShortest time project can be completedAny delay on critical path activities delays projectCritical path activities have 0 slack

Critical Path Analysis

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Begin at starting event and work forwardES = 0 for starting activities

ES is earliest startEF = ES + Activity time

EF is earliest finishES = Maximum EF of all predecessors for non-starting activities

Earliest Start and Finish Steps

Begin at ending event and work backwardLF = Maximum EF for ending activities

LF is latest finish; EF is earliest finishLS = LF - Activity time

LS is latest startLF = Minimum LS of all successors for non-ending activities

Latest Start and Finish Steps

Latest Start and Finish Steps

Latest Finish

ES

LS

EF

LF

Earliest Finish

Latest Start

Earliest Start

Activity Name

Activity Duration

7

A C

FH

C4

10 3

713

HB

28 2

410

HA

06 2

28

Earliest Start

We have 13 days for this project

We can begin the project as early as day 0 ---immediately

Earliest Finish

Task A costs 2 days, so the earliest day we can finish it is day 2

Latest Finish

We must finish the project in day 13, so the latest finish day for task C is day 13

Latest Start

Task C takes 3 days, so the latest time that we should begin it is day 10

Critical Path forMilwaukee General Hospital

Start

A

B

C

D

F

F

G

H

Arrows show

precedence

relationships

Slack=0

Start

A

B

C

D

F

F

G

HH

1313 2

1515

HG

88 5

1313

HF

410 3

713

HC

22 2

44

HE

44 4

88

HD

34 4

78

HB

01 3

34

HA

00 2

22

H00 0

00

Slack=0 Slack=0

Slack=0

Slack=0

Slack=6

Slack=1Slack=1

Start

Earliest Start

Earliest Finish

Latest Finish

Latest Start

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Gantt ChartEarliest Start and Finish

Milwaukee General HospitalMilwaukee General Hospital

A Build internal componentsB Modify roof and floorC Construct collection stackD Pour concrete and install frameE Build high-temperature burnerF Install pollution control systemG Install air pollution deviceH Inspect and test

1 2 3 4 5 6 7 8 9 10 1112 13 1415 16

Gantt ChartLatest Start and Finish

Milwaukee General HospitalMilwaukee General Hospital

A Build internal componentsB Modify roof and floorC Construct collection stackD Pour concrete and install frameE Build high-temperature burnerF Install pollution control systemG Install air pollution deviceH Inspect and test

1 2 3 4 5 6 7 8 9 10 1112 13 1415 16

3 time estimatesOptimistic times (a)Most-likely time (m)Pessimistic time (b)

Follow beta distributionExpected time: t = (a + 4m + b)/6Variance of times: v = (b - a)2/6

PERT Activity Times

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Expected project time (T)Sum of critical path activity times, t

Project variance (V)Sum of critical path activity variances, v

Used to obtain probability of project completion!

Project Times

© 1995 Corel Corp.

PERT Probability Example

You’re a project planner for General Dynamics. A submarine project has an expected completion time of 40 weeks, with a standard deviation of 5 weeks. What is the probability of finishing the sub in 50 weeks or less?

T = 40

s = 5

50 X

Normal Normal DistributionDistribution

Z X T= - = - =s

50 405

2 0.

mz = 0

s Z = 1

Z2.0

Standardized Normal Standardized Normal DistributionDistribution

Converting to Standardized Variable

Due date Expected date of finish

Standard deviation

10

mz = 0

s Z = 1

Z2.0

Z .00 .01

0.0 .50000 .50399

: : : :

2.0 .97725 .97784 .97831

2.1 .98214 .98257 .98300

Standardized Normal Probability Standardized Normal Probability Table (Portion)Table (Portion)

Probabilities in bodyProbabilities in body

Obtaining the Probability

.02

.50798

.97725

Variability of Completion Time for NoncriticalPaths

Variability of times for activities on noncritical paths must be considered when finding the probability of finishing in a specified time.Variation in noncritical activity may cause change in critical path.

Steps in Project Crashing

Compute the crash cost per time period. For crash costs assumed linear over time:

Using current activity times, find the critical pathIf there is only one critical path, then select the activity on this critical path that (a) can still be crashed, and (b) has the smallest crash cost per period. Note that a single activity maybe common to more than one critical pathUpdate all activity times.

)Crash time time(Normalcost Normalcost(Crash periodper cost Crash

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