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vikramthadeshvar @hotmail.com 1 Project Management CPM/PERT
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Project ManagementCPM/PERT
What exactly is a project?PM 1 Im in charge of the construction of a retail development in the centre of a large town. There are 26 retail units and a super market in the complex. My main responsibilities are to co-ordinate the work of the various contractors to ensure that the project is completed to specification, within budget and on time.PM 2 I am directing a team of research scientists. We are running trials on a new analgesic drug on behalf of a pharmaceutical company. It is my responsibility to design the experiments and make sure that proper scientific and legal procedures are followed, so that our results can be subjected to independent statistical analysis.PM 3- The international aid agency which employs me is sending me to New Delhi to organize the introduction of multimedia resources at a teachers training college. My role is quite complex. I have to make sure that appropriate resources are purchased- and in some cases developed within the college. I also have to encourage the acceptance of these resources by lecturers and students within the college.
Project is not defined by the type of outcome it is set up to achieve
Characteristic of a projectA project is a temporary endeavour involving a connected sequence of activities and a range of resources, which is designed to achieve a specific and unique outcome and which operates within time, cost and quality constraints and which is often used to introduce change.A unique, one-time operational activity or effortRequires the completion of a large number of interrelated activitiesEstablished to achieve specific objectiveResources, such as time and/or money, are limitedTypically has its own management structureNeed leadershipProject
Examplesconstructing houses, factories, shopping malls, athletic stadiums or arenasdeveloping military weapons systems, aircrafts, new shipslaunching satellite systemsconstructing oil pipelinesdeveloping and implementing new computer systemsplanning concert, football games, or basketball tournamentsintroducing new products into market
What is project managementThe application of a collection of tools and techniques to direct the use of diverse resources towards the accomplishment of a unique, complex, one time task within time, cost and quality constraints.Its origins lie in World War II, when the military authorities used the techniques of operational research to plan the optimum use of resources.One of these techniques was the use of networks to represent a system of related activities
Project Management ProcessProject planningProject scheduling Project controlProject teammade up of individuals from various areas and departments within a companyMatrix organizationa team structure with members from functional areas, depending on skills requiredProject Managermost important member of project teamScope statementa document that provides an understanding, justification, and expected result of a projectStatement of workwritten description of objectives of a projectOrganizational Breakdown Structurea chart that shows which organizational units are responsible for work itemsResponsibility Assignment Matrixshows who is responsible for work in a project
Work breakdown structureA method of breaking down a project into individual elements ( components, subcomponents, activities and tasks) in a hierarchical structure which can be scheduled and costIt defines tasks that can be completed independently of other tasks, facilitating resource allocation, assignment of responsibilities and measurement and control of the projectIt is foundation of project planningIt is developed before identification of dependencies and estimation of activity durationsIt can be used to identity the tasks in the CPM and PERT
Project Planning Resource Availability and/or LimitsDue date, late penalties, early completion incentivesBudgetActivity InformationIdentify all required activitiesEstimate the resources required (time) to complete each activityImmediate predecessor(s) to each activity needed to create interrelationships
Project Scheduling and Control TechniquesGantt ChartCritical Path Method (CPM)Program Evaluation and Review Technique (PERT)
Graph or bar chart with a bar for each project activity that shows passage of timeProvides visual display of project scheduleGantt Chart
History of CPM/PERTCritical Path Method (CPM)E I Du Pont de Nemours & Co. (1957) for construction of new chemical plant and maintenance shut-downDeterministic task timesActivity-on-node network constructionRepetitive nature of jobsProject Evaluation and Review Technique (PERT)U S Navy (1958) for the POLARIS missile programMultiple task time estimates (probabilistic nature)Activity-on-arrow network constructionNon-repetitive jobs (R & D work)
Project NetworkUse of nodes and arrows Arrows An arrow leads from tail to head directionallyIndicate ACTIVITY, a time consuming effort that is required to perform a part of the work. Nodes A node is represented by a circle- Indicate EVENT, a point in time where one or more activities start and/or finish. Network analysis is the general name given to certain specific techniques which can be used for the planning, management and control of projectsActivityA task or a certain amount of work required in the projectRequires time to completeRepresented by an arrowDummy ActivityIndicates only precedence relationshipsDoes not require any time of effort
EventSignals the beginning or ending of an activityDesignates a point in timeRepresented by a circle (node)NetworkShows the sequential relationships among activities using nodes and arrowsActivity-on-node (AON)nodes represent activities, and arrows show precedence relationshipsActivity-on-arrow (AOA)arrows represent activities and nodes are events for points in timeProject Network
AOA Project Network for HouseAON Project Network for House
Situations in network diagramA must finish before either B or C can startboth A and B must finish before C can startboth A and C must finish before either of B or D can startA must finish before B can startboth A and C must finish before D can start
Network exampleIllustration of network analysis of a minor redesign of a product and its associated packaging.The key question is: How long will it take to complete this project ?
For clarity, this list is kept to a minimum by specifying only immediate relationships, that is relationships involving activities that "occur near to each other in time".
Questions to prepare activity networkIs this a Start Activity? Is this a Finish Activity? What Activity Precedes this? What Activity Follows this? What Activity is Concurrent with this?
CPM calculationPathA connected sequence of activities leading from the starting event to the ending eventCritical PathThe longest path (time); determines the project durationCritical ActivitiesAll of the activities that make up the critical path
Forward PassEarliest Start Time (ES)earliest time an activity can start ES = maximum EF of immediate predecessorsEarliest finish time (EF)earliest time an activity can finishearliest start time plus activity timeEF= ES + tLatest Start Time (LS)Latest time an activity can start without delaying critical path time LS= LF - tLatest finish time (LF)latest time an activity can be completed without delaying critical path timeLS = minimum LS of immediate predecessorsBackward Pass
CPM analysisDraw the CPM networkAnalyze the paths through the networkDetermine the float for each activityCompute the activitys float float = LS - ES = LF - EFFloat is the maximum amount of time that this activity can be delay in its completion before it becomes a critical activity, i.e., delays completion of the projectFind the critical path is that the sequence of activities and events where there is no slack i.e.. Zero slackLongest path through a networkFind the project duration is minimum project completion time
CPM Example: CPM Network
CPM ExampleES and EF Timesa, 6f, 15b, 8c, 5e, 9d, 13g, 17h, 9i, 6j, 12060805
CPM ExampleES and EF Timesa, 6f, 15b, 8c, 5e, 9d, 13g, 17h, 9i, 6j, 12060805 5 14 8 21 6 23 6 21
CPM ExampleES and EF Timesa, 6f, 15b, 8c, 5e, 9d, 13g, 17h, 9i, 6j, 12060805 5 14 8 21 21 33 6 23 21 30 23 29 6 21 Projects EF = 33
CPM ExampleLS and LF Timesa, 6f, 15b, 8c, 5e, 9d, 13g, 17h, 9i, 6j, 12060805 5 14 8 21 21 33 6 23 21 30 23 29 6 21 21 3327 33 24 33
CPM ExampleLS and LF Timesa, 6f, 15b, 8c, 5e, 9d, 13g, 17h, 9i, 6j, 12060805 5 14 8 21 21 33 6 23 21 30 23 29 6 21 4 10 08712 12 21 21 3327 33 8 21 10 27 24 33 18 24
CPM ExampleFloata, 6f, 15b, 8c, 5e, 9d, 13g, 17h, 9i, 6j, 12060805 5 14 8 21 21 33 6 23 21 30 23 29 6 21 3 9 08712 12 21 21 3327 33 8 21 10 27 24 33 9 24 3 4 3 3 4 007 7 0
CPM ExampleCritical Patha, 6f, 15b, 8c, 5e, 9d, 13g, 17h, 9i, 6j, 12
PERT PERT is based on the assumption that an activitys duration follows a probability distribution instead of being a single valueThree time estimates are required to compute the parameters of an activitys duration distribution:pessimistic time (tp ) - the time the activity would take if things did not go wellmost likely time (tm ) - the consensus best estimate of the activitys durationoptimistic time (to ) - the time the activity would take if things did go well
PERT analysisDraw the network.Analyze the paths through the network and find the critical path.The length of the critical path is the mean of the project duration probability distribution which is assumed to be normalThe standard deviation of the project duration probability distribution is computed by adding the variances of the critical activities (all of the activities that make up the critical path) and taking the square root of that sumProbability computations can now be made using the normal distribution table.
Probability computationDetermine probability that project is completed within specified timewhere = tp = project mean time = project standard mean timex = (proposed ) specified time
PERT Example Immed. Optimistic Most Likely PessimisticActivity Predec. Time (Hr.) Time (Hr.) Time (Hr.) A -- 4 6 8B -- 1 4.5 5C A 3 3 3 D A 4 5 6 E A 0.5 1 1.5 F B,C 3 4 5 G B,C 1 1.5 5 H E,F 5 6 7 I E,F 2 5 8 J D,H 2.5 2.75 4.5 K G,I 3 5 7
PERT Example ADCBFEGIHKJ PERT Network
PERT Example Activity Expected Time Variance A 6 4/9 B 4 4/9 C 3 0 D 5 1/9 E 1 1/36 F 4 1/9 G 2 4/9 H 6 1/9 I 5 1 J 3 1/9 K 5 4/9
PERT Example Activity ES EF LS LF Slack A 0 6 0 6 0 *critical B 0 4 5 9 5 C 6 9 6 9 0 * D 6 11 15 20 9 E 6 7 12 13 6 F 9 13 9 13 0 * G 9 11 16 18 7 H 13 19 14 20 1 I 13 18 13 18 0 * J 19 22 20 23 1 K 18 23 18 23 0 *
PERT ExampleVpath = VA + VC + VF + VI + VK = 4/9 + 0 + 1/9 + 1 + 4/9 = 2path = 1.414 z = (24 - 23)/(24-23)/1.414 = .71 From the Standard Normal Distribution table: P(z < .71) = .5 + .2612 = .7612
PROJECT COST
Cost consideration in projectProject managers may have the option or requirement to crash the project, or accelerate the completion of the project.This is accomplished by reducing the length of the critical path(s).The length of the critical path is reduced by reducing the duration of the activities on the critical path.If each activity requires the expenditure of an amount of money to reduce its duration by one unit of time, then the project manager selects the least cost critical activity, reduces it by one time unit, and traces that change through the remainder of the network.As a result of a reduction in an activitys time, a new critical path may be created.When there is more than one critical path, each of the critical paths must be reduced.If the length of the project needs to be reduced further, the process is repeated.
Project CrashingCrashingreducing project time by expending additional resourcesCrash timean amount of time an activity is reducedCrash costcost of reducing activity timeGoalreduce project duration at minimum cost
Activity crashingSlope = crash cost per unit time
Time-Cost RelationshipCrashing costs increase as project duration decreasesIndirect costs increase as project duration increasesReduce project length as long as crashing costs are less than indirect costsTime-Cost Tradeoff
Project Crashing example
Time Cost data
ActivityNormal timeNormal cost RsCrash timeCrash cost RsAllowable crash timeslope12345671284124443000200040005000050050015007539113500035007000710001100110022000531333140050030007000200200700075000110700
From..To..
Benefits of CPM/PERTUseful at many stages of project managementMathematically simpleGive critical path and slack timeProvide project documentationUseful in monitoring costsHow long will the entire project take to be completed? What are the risks involved? Which are the critical activities or tasks in the project which could delay the entire project if they were not completed on time? Is the project on schedule, behind schedule or ahead of schedule? If the project has to be finished earlier than planned, what is the best way to do this at the least cost? CPM/PERT can answer the following important questions:
Limitations to CPM/PERTClearly defined, independent and stable activitiesSpecified precedence relationshipsOver emphasis on critical pathsDeterministic CPM modelActivity time estimates are subjective and depend on judgmentPERT assumes a beta distribution for these time estimates, but the actual distribution may be differentPERT consistently underestimates the expected project completion time due to alternate paths becoming criticalTo overcome the limitation, Monte Carlo simulations can be performed on the network to eliminate the optimistic bias
Computer Software for Project ManagementMicrosoft Project (Microsoft Corp.)MacProject (Claris Corp.)PowerProject (ASTA Development Inc.)Primavera Project Planner (Primavera)Project Scheduler (Scitor Corp.)Project Workbench (ABT Corp.)
Practice ExampleA social project manager is faced with a project with the following activities:Draw network diagram and show the critical path. Calculate project duration.
Activity DescriptionDurationSocial work team to live in village5wSocial research team to do survey12wAnalyse results of survey5wEstablish mother & child health program14wEstablish rural credit programme15wCarry out immunization of under fives4w
Practice problem
ActivityDescriptionDuration1-2Social work team to live in village5w1-3Social research team to do survey12w3-4Analyse results of survey5w2-4Establish mother & child health program14w3-5Establish rural credit programme15w4-5Carry out immunization of under fives4w
