Project Management Kr

7/21/2019 Project Management Kr

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ProjectManagement

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall

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What is a Project?


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Project

An interrelated

set ofactivities witha denitestarting andending point,which resultsin a unique

outcome for a


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What is ProjectManagement?


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ProjectManagement

A s!stemi"ed,phasedapproach to

dening,organi"ing,planning,

monitoring,


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#ening and $rgani"ingProjects

#ening the %cope and $&jectives

%electing the Project Managerand 'eam

(ecogni"ing $rgani"ational%tructure


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Planning Projects

#ening the Wor) *rea)down

%tructure

#iagramming the networ)

#eveloping the schedule

Anal!"ing cost+timetrade+os

Assessing ris)s


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Wor) *rea)down%tructure


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Wor) *rea)down %tructure

A statement of all the wor) that

has to &e completed

Activit!

'he smallest unit of wor) eortconsuming &oth time andresources that can &e planned

and controlled


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Copyright 2013 Pearson Education, Inc. Publishing asPrentice Hall.

Purchase and deliver equipment

Construct hospital

#evelop information s!stem

-nstall medical equipment

'rain nurses and support sta

Wor) *rea)down%tructure

%elect administration sta

%ite selection and surve!

%elect medical equipment

Prepare nal construction plans

*ring utilities to site

-nterview applicantsfor

nursing and support

$rgani"ing and %ite PreparationPh!sical .acilities and -nfrastructure/evel 0

/evel 1

/evel 2

(elocation of %t ohn3s 4ospital

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#iagramming the5etwor) Program 6valuation and (eview

'echnique 7P6('8

Critical Path Method 7CPM8

Activit!+on+5ode approach


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6sta&lishing Precedence (elationships


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Precedence(elationships#etermining thesequence for

underta)ingactivities


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69ample 20


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.inish%tart

A

B

C

D

E

F

G

H

I

J

K

A:

*:CA#*6

*.A;C4#-

ImmediatePredecessor

69ample 20


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The following information is known ao!t a "ro#ect

Draw the network diagram for this "ro#ect

Acti$it% Acti$it% Time &da%s'Immediate

Predecessor&s'

A ( )

B * A

C + A

D + B, C

E + D

F - EG . E

Application 20


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Finish

G.

F-

E+

D+

Acti$it% Acti$it% Time &da%s'Immediate

Predecessor&s'

A ( )

B * A

C + A

D + B, C

E + DF - E

G . E

B*

C+

/tart A(

Application 20


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#eveloping the %chedule

Path

'he sequence of activities&etween a project3s start andnish

Critical Path &

'he sequence of activities&etween a start and nish thatta)es the longest time to

completeCopyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - 1


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6arliest start time 76%8 + the latestearliest nish time of an! immediatel!preceding activities

6arliest nish time 76.8 + the earlieststart time plus its estimated duration6. = 6% > t /atest nish time 7/.8 the earliest of thelatest start times of an! of theimmediatel! following activities

/atest start time 7/%8 + the latest nishtime minus its estimated duration /% =/. t


02 - 1!

Activit! %lac) + the ma9imum length oftime an activit! can &e dela!ed withoutdela!ing the entire project

/.+6. or /%+6%


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02 - 1"

0atest finish

time

0atest start time

Acti$it%

D!ration

Earliest start timeEarliest finish time

1

*

2*

2+

A

2*


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.inish%tart

A

B

C

D

E

F

G

H

I

J

K

Path 'ime 7w)s8

A+-+< @@A+.+< 2A+C+;++< B*+#+4++< BD*+6++< E@

Paths are thesequence ofactivities &etween a

project3s start andnish3

69ample 22


02 - 1#


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02 - 1$

'

B

C

01

(

@F

)

E

H

E1

*

D

+

01

E

2E

I

0F

.inish%tart

A

02

01

1

6arliest start time

02

6arliest nish time

1 D

D@@

D 0D 0D FD

22 F02 22

FD B@

02 2

02 22 B@ BD

69ample

22


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02 - 1%

69ample

22'

B

C

01

(

@F

)

E

H

E1

*

D

+

01

E

2E

I

0F

.inish%tart

02

01

1 D

D @@

D 0D 0D FD

22 F02 22

FD B@

02 2

02 22 B@ BD1 02

'he Critical

Path ta)es BDwee)s


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02 - 20

'

"

C10

(

3!

)

H

0

*

%

+

10

E

2

I

1!

.inish%tart

12

10

1 D

D @@

D 0D0D FD

22 F02 22

FD B@

02 2

02 22 B@ BD1 02

EB@

F@ B@

FD B@

2E FD

0D FD

@FFD

0E 2E

D 0D

2 0E

1 D

B@ BD

69ample22

/atest start time

/atest nish time


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02 - 21

'

B

C

01

(

@F

)

E

H

E1

*

D

+

01

E

2E

I

0F

.inish%tart

02

01

1D

D @@

D 0D0D FD

22 F02 22

FD B@

02 2

02 22 B@ BD1 02

E B@

F@ B@

FD B@

2E FD

0D FD

@F FD

0E 2E

D 0D

2 0E

1 D

B@ BD

69ample

22

% =1

% =2

% =2B

% =1

% =@B

% =2

% =2

% =E0

% =1

% =1

% =1


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#eveloping a %chedule


02 - 22

;antt chart


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Application 22

Calculate the four times for each activit! in order todetermine the critical path and project duration forthe diagram in Application Pro&lem 0

Activit

!

#uratio

n

6arliest %tart

76%8

/atest%tart

7/%8

6arliest.inish

76.8

/atest.inish

7/.8

%lac)7/%+

6%8

$n theCritica

l Path?A 1 1 1+1=1 Ges

* 2

C E

# E

6 E

. @

; F

critical path is AC#6; with a project duration of 2E da!s


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Calculate the four times for each activit! in order todetermine the critical path and project duration

Activit

!

#uratio

n

6arliest %tart

76%8

/atest%tart

7/%8

6arliest.inish

76.8

/atest.inish

7/.8

%lac)7/%+

6%8

$n theCritica

l Path?A 1 1 1+1=1 Ges

* 2

C E

# E

6 E

. @

; F

( 4 4 22 45(6* 7o

( ( 22 22 (5(61 8es

24 *2 ** *+ *25246* 7o24 24 *+ *+ 2452461 8es

22 22 2. 2. 2252261 8es

2. 2. 24 24 2.52.61 8es

Application 22


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Application 22


02 - 2!

itical path is AC#6; with a project duration of 2E

/tart FinishA(

B*

C+

D+

E+

F-

G.


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Anal!"ing Cost+'ime'rade+$s


02 - 2"

Project Crashing%hortening 7ore9pediting8 some

activities within aproject to reduceoverall projectcompletion time

Project Costs #irect Costs -ndirect Costs Penalt! Costs


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Anal!"ing Cost+'ime'rade+$s


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Project Costs

5ormal time75'8 is thetime necessar! to

complete an activit!under normalconditions

5ormal cost75C8 is theactivit! cost associated

with the normal time Crash time7C'8 is the

shortest possi&le timeto complete an activit!

Crash cost7CC8 is theactivit! cost associated

Cost to crash perperiod =

CC 5C5' C'


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Copyright 2013 Pearson Education, Inc. Publishing asPrentice Hall.

Cost+'ime (elationships

/inear cost assumption

111 :

111 :

B111 :

F111 :

E111 :

@111 :

1 :

#irectcost7dollars8

H H H H H HF B D 01 00

'ime 7wee)s8

Crash cost 7CC8

5ormal cost 75C8

7Crash time8 75ormal time8

6stimated costsfor a 2+wee)reduction, from01 wee)s to wee)s

F211

.igure 2B 02 - 2$


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Anal!"ing Cost+'ime'rade+$s#etermining the Minimum Cost %cheduleI

0 #etermine the project3s critical path7s8

2 .ind the activit! or activities on the criticalpath7s8 with the lowest cost of crashing per wee)

@ (educe the time for this activit! untilJa -t cannot &e further reduced or

&Kntil another path &ecomes critical, or

c 'he increase in direct costs e9ceeds the savingsthat result from shortening the project 7whichlowers indirect costs8

E (epeat this procedure until the increase in directcosts is larger than the savings generated &!shortening the project


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69ample 2@

DI9ECT C:/T A7D TI;E DATA F:9 THE /T3 J:H7im!mTime9ed!ction &week'

Cost ofCrashing "er?eek &='

A 2*=2*,111

22=2-,111

2 2,111

B 4.1,111

( @+,111 * (,111

C 21 +,111 . (,111 . @11

D 212@,111

*1,111 * *,111

E *+

2*1,111

2+

*11,111

21 ,111

F 2121,111

@ 2@,111 + 2,.11

G -..11,111

*..-1,111

21 -,111

H +12,*11,111

-.2,*@1,111

. 2*,111

I 2.+1,111

21 .*,.11 . *,.11Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall

02 - 30


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69ample 2@

#etermine the minimum+cost schedule forthe %t ohn3s 4ospital project

Project completion time =BD wee)s

Project cost = L2,B2E,111

#irect = L0,DD2,111

-ndirect = BD7L,1118 = LFF2,111

Penalt! = 7BD BF87L21,1118 = L1,111

AIK -- weeks

AFK * weeks

ACGJK @( weeks

BDHJK @4 weeks

BEJK +- weeksCopyright 2013 Pearson Education, Inc. publishing asPrentice Hall

02 - 31


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69ample 2@

%'A;6 0%tep 0 'he critical path is *#4


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69ample 2@


02 - 33

.inish


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69ample 2@

%'A;6 2%tep 0'he critical path is still *#4


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69ample 2@

.inish


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69ample 2@

%'A;6 @%tep 0.'he critical paths are *#4


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69ample 2@

.inish


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69ample 2@

%'A;6 E%tep 0'he critical paths are still *#4


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69ample 2@

.inish


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69ample 2@/tage Crash

Acti$it%Time9ed!ction&weeks'

9es!ltingCriticalPath&s'

Pro#ectD!ration&weeks'

Pro#ectDirectCosts,0ast Trial&=111'

CrashCostAdded&=111'

TotalIndirectCosts&=111'

TotalPenalt%Costs&=111'

TotalPro#ectCosts&=111'

1 ) ) B5D5H5J5K

@4 2,44*31)

..*31131

*,@*+31

2 J - B5D5H5J5K @@ 2,44*31 -31 .*31 *131 *,.+-31

* D * B5D5H5J5K

A5C5G5J5K

@+ 2,44.31+31

.2*31131

*,.2231

- K 2 B5D5H5J5K

A5C5G5J5K

@- 2,44431+31

.1+31131

*,.1(31

+ B, C * B5D5H5J5K

A5C5G5J5K

@2 *,11-312.3*

+31131

*,.1@3*


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-ndirect project costs = L2F1 per da!Penalt! cost = L011 per da! past da! 0E

Project Activit! and Cost #ata

Activit!

5ormal'ime7da!s8

5ormalCost7L8

Crash'ime7da!s8

CrashCost7L8

-mmediatePredecessor7s8

A F0,111

E0,211

:

* F 11 @2,111

:

C 2 B11 0D11

A, *

# @0,F11

22,111

*

6 F D11 @ C, #

Application 2@


02 - 1


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Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - 2

13

19

F

2

15

21

13

13

G

3

16

16

5

5

D

3

8

8

8

8

E

5

13

13

5

6

C

2

7

8

0

0

B

5

5

5

0

1

A

5

5

6

Start

ES

LS

ID

DUR

EF

LF

16

16

H

5

21

21

Finish

Application 2@


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Project Activit! and Cost #ataActivit

! Crash CostO#a!Ma9imum Crash 'ime

7da!s8

A 211 0

* B11 2

C @11 0

# F11 0

6 0F1 2

. 011 0

; 1 14 211 25ormal 'otal Costs =

'otal -ndirect Costs =Penalt! Cost ='otal Project Costs =

L,F11L2F1 per da! 20 da!s = LF,2F1

L011 per da! da!s = L11L0@,EF1

Application 2@

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - 3


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/te" 2 The critical "ath is , and the "ro#ectd!ration is BDEGH*2 da%s3

/te" * Acti$it% E on the critical "ath has the lowest cost ofcrashing &=2.1 "er da%'3 7ote that acti$it% G cannot ecrashed3

/te" - 9ed!ce the time &crashing * da%s will red!ce the"ro#ect d!ration to 24 da%s' and re5calc!late costs

7ormal Costs 0ast Trial 6Crash Cost Added 6Total Indirect Costs 6

Penalt% Cost 6Total Pro#ect Cost 6

=(,.11=2.1 * da%s 6 =-11=*.1 "er da% 24 da%s 6 =+,(.1

=211 "er da% . da%s 6 =.11=2-,1.1

Application 2@

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 -


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/te" + 9e"eat !ntil direct costs greater than sa$ings

&ste" *' Acti$it% H on the critical "ath has the ne>t lowest costof crashing &=*11 "er da%'3

&ste" -' 9ed!ce the time &crashing * da%s will red!ce the"ro#ect d!ration to 2( da%s' and re5calc!late costs

Costs 0ast Trial 6Crash Cost Added 6Total Indirect Costs 6Penalt% Cost 6

Total Pro#ect Cost 6

=(,.11 =-11 &the added crash costs' 6 =(,11=*11 * da%s 6 =+11

=*.1 "er da% 2( da%s 6 =+,*.1=211 "er da% - da%s 6 =-11

=2*,(.1

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - !

Application 2@


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&ste" +' 9e"eat

&ste" *' Acti$it% D on the critical "ath has the ne>t lowestcrashing cost &=.11 "er da%'3

&ste" -' 9ed!ce the time &crashing 2 da% will red!ce the "ro#ectd!ration to 2@ da%s' and re5calc!late costs

Costs 0ast Trial 6Crash Cost Added 6Total Indirect Costs 6Penalt% Cost 6

Total Pro#ect Cost 6

=(,11 =+11 &the added crash costs' 6 =,*11=.11 2 da% 6 =.11

=*.1 "er da% 2@ da%s 6 =+,111=211 "er da% * da%s 6 =*11

=2*,411 which is greater than the last trial3Hence we sto" the crashing "rocess3

Application 2@

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - "


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The recommended com"letion date is da% 2(3

'ri

al

CrashActivi

t!

(esulting

Critical

Paths

(eduction

7da!s8

Project

#uration

7da!s8

Costs

/ast

'rial

Crash

CostAdde

d

'otal-ndire

ct

Costs

'otalPenalt!

Cost

s

'otalProjec

t

Costs

1 :*+#+6+

;+4: 20

L,F11

:LF,2F

1L11

L0@,EF1

0 6*+#+6+

;+42 0D

L,F11

L@11LE,F

1LF11

L0@,1F1

2 4*+#+6+

;+4

2 0L,

11

LE11LE,2F

1

L@11L02,

F1F!rther red!ctions will cost more than the sa$ingsin indirect costs and "enalties3

The critical "ath is B D E G H and thed!ration is 2( da%s3

Application 2@

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - #


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Assessing (is)s

(is)+management Plans %trategic .it

%erviceOProduct Attri&utes

Project 'eam Capa&ilit!

$perations

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - $


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Assessing (is)s

%tatistical Anal!sis

$ptimistic time 7a8

Most li)el! time 7m8

Pessimistic time 7b8

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - %


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a m b;ean

Time

Beta distri!tion

a m b

;eanTime

- -

Area !nder c!r$eetween aand bis 443(+

7ormal distri!tion

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - !0


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'he mean of the &eta distri&utioncan &e estimated &!

te6 a +m b

@

'he variance of the &etadistri&ution for each activit! is

*6 b a@

*



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69ample 2E

%uppose that the project team hasarrived at the following timeestimates for activit! * 7site selection

and surve!8 of the %t ohn3s 4ospitalprojectI

a= wee)s, m= wee)s, and b= 0Fwee)s

a Calculate the e9pected time andvariance for activit! *

& Calculate the e9pected time andvariance for the other activities inthe project



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69ample 2E

a 'he e9pected time for activit! * is

'he variance for activit! * is

te6 6 6 4 weeks( +&' 2.

@

.+

@

*6 6 6 23(2. (@

*

@

*



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69ample 2E

&'he following ta&le shows the e9pectedactivit! times and variances for thisproject Time Estimates &week' Acti$it% /tatistics

Acti$it%:"timistic

&a';ost 0ikel%

&m'Pessimistic

&b'E>"ected Time

&te'ariance

&2'

A 22 2* 2- 2* 1322B ( 2. 4 23(

C . 21 2. 21 *3(

D 4 2@ 21 23(

E 2+ *. -1 *+ (322

F @ 4 2 21 +311G *. -@ +2 -. (322

H -. +1 +. +1 *3(

I 21 2- * 2. 4311

J 2 * 2. + .3++

K . @ ( @ 1322Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - !


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Application 2E

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - !!

'he director ofcontinuingeducation at*lue&ird

Kniversit! justapproved theplanning for asales training

seminar 4eradministrativeassistantidentied thevarious activitiesthat must &e


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Application 2E

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - !"

/tart

A

B

C

D

FinishE

F

G J

H

I

'he 5etwor)#iagram isI


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Acti$it%Immediate

Predecessor&s':"timistic

&a'

;ost0ikel%

&m'Pessimistic

&'E>"ectedTime &t'

ariance&'

A ) . (

B ) @ 2*

C ) - + .

D A 22 2( *.

E B 21 2*

F C, E - + .

G D + 4

H F . ( 4

he *lue&ird Kniversit! sales training seminar activitilate the means and variances for each activit!

Application 2E

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - !#


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Acti$it%Immediate

Predecessor&s':"timistic

&a'

;ost0ikel%

&m'Pessimistic

&'E>"ectedTime &t'

ariance&'

A ) . (

B ) @ 2*

C ) - + .

D A 22 2( *.

E B 21 2*

F C, E - + .

G D + 4

H F . ( 4

he *lue&ird Kniversit! sales training seminar activitilate the means and variances for each activit!

@3- 13*.

3-- 2311

+311 1322

2(3--.3++

21311 13++

+311 1322

(3.1 13@4

(311 13++

223.1*3*.

+311 1311

Application 2E

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - !$


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Anal!"ing Pro&a&ilities

TE6 6E>"ected acti$it% times

on the critical "ath

;ean of normaldistri!tion

*ecause the activit! times areindependent

p26 &ariances of acti$ities on the critical "ath'

z6T TE

p

Ksing the z+transformation

where

T6 d!e date for the "ro#ect

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - !%

*ecause the central limit theorem can &eapplied, the mean of the distri&ution is theearliest e9pected nish time for the project


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69ample 2F

Calculate the pro&a&ilit! that %tohn3s 4ospital will &ecomeoperational in 2 wee)s, using 7a8 thecritical path and 7&8 path AC;


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69ample 2F

Ksing the 5ormal #istri&ution appendi9,we nd a value of 11 'hus thepro&a&ilit! is a&out 10 the length ofpath *#4< will &e no greater than

2 wee)s 0ength ofcritical"ath

Proailit%of meeting

the sched!leis 131(

7ormal distri!tion;ean 6 @4 weeks 6 -3+. weeks

Proailit% ofe>ceeding (*weeks is

1324**

Pro#ect d!ration &weeks'

@4 (*

*ecause this isthe critical path,there is a 0Dpercentpro&a&ilit! thatthe project willta)e longer than2 wee)s

Copyright 2013 Pearson Education, Inc. publishing asPrentice Hall 02 - "1


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69ample 2F

& 'he sum of the e9pected activit!times on path AC;< is Bwee)s and that 2= 100 > 2 >

00 > FEE > 100 = 0FFF 'he z+value is

23*(-34+

.

2.3..

@((*==

=z

'he pro&a&ilit! is a&out 1D1that the length of path AC;

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Project Management Kr

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