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Project Management
Operations Management
William J. Stevenson
8th edition
17-2
Project Management
CHAPTER
17
Project Management
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. Stevenson Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
17-3
Project Management
Projects
JAN FEB MAR APR MAY JUN
On time!
Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame.
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Project Management
Project Management
How is it different?
Why is it used?
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Project Management
Project Management
Top-down commitment Having a capable project manager Having time to plan Careful tracking and control Good communications
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Project Management
Project Management
Executive responsibilities
Project selection Project manager selection Organizational structure Manage within functional unit Assign a coordinator Use a matrix organization with a project leader
Organizational alternatives
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Project Management
Project Management
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Project Management
Gantt Chart
Locate new facilities Interview staff Hire and train staff Select and order furniture
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Project Management
Key Decisions
Project Manager
Responsible for:
Ethical Issues
Withhold information
Misleading status reports Falsifying records Comprising workers safety Approving substandard work
Feasibility
Management
Concept
Figure 17.2
Level 1 Level 2
Level 3 Level 4
PERT:
CPM:
Graphically displays project activities Estimates how long the project will take Indicates most critical activities Show where delays will not affect project
Path
Sequence of activities that leads from the starting node to the finishing node The longest path; determines expected project duration Activities on the critical path Allowable slippage for path; the difference the length of path and the length of critical path
Critical path
Critical activities
Slack
Figure 17.4
AOA
Locate facilities
4
Furniture setup
2
Remodel
1
Interview
5
Move in Hire and train
Figure 17.4
Furniture setup
AON
1
Remodel
6
Move in
S
Hire and train
Interview
Network Conventions
b c
a c b a
a a c b b d
c Dummy activity
Time Estimates
Deterministic
Probabilistic
Example 1
6 weeks
Figure 17.5
Deterministic time estimates
8 weeks
4
2
11 weeks 3 weeks
1
4 weeks 9 weeks
Move in 1 week
Example 1 Solution
Critical Path
Length
(weeks)
Slack 2 0 6
18 20 14
Computing Algorithm
Network activities
ES: early start EF: early finish LS: late start LF: late finish
Used to determine
Optimistic time
Pessimistic time
Probabilistic Estimates
Figure 17.8
tm
te
tp Pessimistic time
Expected Time
te
t + 4t +t o m p = 6
te = expected time to = optimistic time tm = most likely time tp = pessimistic time
Variance
2 (t t ) = p o 36
Example 5
Most likely time Pessimistic time
Optimistic time
Path Probabilities
Specified time Path mean Path standard deviation
Z =
Z indicates how many standard deviations of the path distribution the specified tine is beyond the expected path duration.
Example 6
17 Weeks 1.00
1.00
g-h-i 13.5 Weeks
Crash the project one period at a time Only an activity on the critical path Crash the least expensive activity Multiple critical paths: find the sum of crashing the least expensive activity on each critical path
Figure 17.11
Shorten
CRASH
Shorten
Example 7
2 f 4 d
Advantages of PERT
Critical activities
2
Slack activities
1 5 6
Limitations of PERT
Important activities may be omitted Precedence relationships may not be correct Estimates may include a fudge factor
4 2
142 weeks 3
Computer aided design (CAD) Groupware (Lotus Notes) Project management software
CA Super Project Harvard Total Manager MS Project Sure Track Project Manager Time Line
Advantages of PM Software
Imposes a methodology Provides logical planning structure Enhances team communication Flag constraint violations Automatic report formats Multiple levels of reports
Risk Management
Summary
Projects are a unique set of activities Projects go through life cycles PERT and CPM are two common techniques Network diagrams Project management software available
CHAPTER
17
Project Crashing
Crashing a project involves paying more money to complete a project more quickly. Since the critical path determines the length of a project, it makes sense to reduce the length of activities on the critical path. CP activities should be reduced until the project is reduced to the desired length or you are paying more per day than you save. If you have multiple CPs, they should be shortened simultaneously.
Projects Concepts