PROJECT MANAGEMENTPART SIX

•Chapter Eighteen•Project Management

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

• 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

Project Manager

Responsible for:

Work QualityHuman Resources TimeCommunications Costs

• Temptation to understate costs

• Withhold information

• Misleading status reports

• Falsifying records

• Comprising workers’ safety

• Approving substandard work

Ethical Issues

Project Life Cycle

Concept

FeasibilityFeasibility

PlanningPlanning

ExecutionExecution

TerminationTermination

Man

agem

ent

• Risk: occurrence of events that have undesirable consequences– Delays– Increased costs– Inability to meet specifications– Project termination

Project Risk

• Identify potential risks

• Analyze and assess risks

• Work to minimize occurrence of risk

• Establish contingency plans

Risk Management

Work Breakdown Structure

Project XProject X

Level 1

Level 2

Level 3

Level 4

Figure 18-3

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

Planning and Scheduling

Gantt Chart

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

Project Network – Activity on Arrow

1

2

3

4

5 6

Locatefacilities

Orderfurniture

Furnituresetup

InterviewHire andtrain

Remodel

Move in

Project Network – Activity on Node

1

2

3

5

6

Locatefacilities

Orderfurniture

Furnituresetup

Interview

RemodelMove in

4

Hire andtrain

7S

Network Conventions

a

b

c ab

c

a

b

c

d

a

b

c

Dummyactivity

Example 1

1

2

3

4

5 6

8 weeks

6 weeks

3 weeks

4 weeks9 weeks

11 weeks

1 week

Locate

facilities

Order

furniture Fu

rnitu

re

setup

InterviewHire

and train

Remodel Move in

Example 1 Solution

P a t h L e n g t h( w e e k s )

S l a c k

1 - 2 - 3 - 4 - 5 - 61 - 2 - 5 - 61 - 3 - 5 - 6

1 82 01 4

206

Critical PathCritical Path

• 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

Probabilistic Estimates

Activitystart

Optimistictime

Most likelytime (mode)

Pessimistictime

o pm te

Figure 18-8

Example 5

1-3-4a

3-4-5d

3-5-7e

5-7-9f

2-4-6b

4-6-8h

2-3-6g 3-4-6

i

2-3-5c

Optimistictime

Most likelytime

Pessimistictime

17Weeks

Weeks

Weeks

Weeks

10.0

16.0

13.5

1.00

1.00

a-b-c

d-e-f

g-h-i

Example 6

• Computer aided design (CAD)• Groupware (Lotus Notes)• Project management software

– CA Super Project– Harvard Total Manager– MS Project– Sure Track Project Manager– Time Line

Technology

• 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

A project consists of 10 activities, lettered A through J, as shown in the accompanying precedence diagram, with the activities on the arrows. For each activity, the deterministic time estimate in weeks is shown in the following table.

Advantages of PM Software

A project consists of 10 activities, lettered A through J, as shown in the accompanying precedence diagram, with the activities on the arrows. For each activity, the deterministic time estimate in weeks is shown in the following table.

•  Activity Time Activity Time ABCDE 24356 FGHIJ 34431• List all of the paths through the network. • What is the duration of each of the paths? • What is the critical path? • What is the second-most critical path? • What is the slack time for each activity? • Calculate the ES, Ef, LS and LF times for each activity.

Advantages of PM Software

Time-Cost Trade-Offs: Crashing

TotalcostTotalcost

ShortenShorten

ShortenShorten

Cumulativecost of crashing

Cumulativecost of crashing

Expected indirect costsExpected indirect costs

Optimum

CRASHCRASH

Figure 18-11

6a

4d

5c

10b

9 e

2f

Example 7

Advantages of PERT

• Forces managers to organize

• Provides graphic display of activities

• Identifies

– Critical activities

– Slack activities

1

2

3

4

5 6

Limitations of PERT• Important activities may be omitted

• Precedence relationships may not be correct

• Estimates may include a fudge factor

1

2

3

4

5 6

142 weeks