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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