By

Ameni Azzouz, PhD

Assistant Professor at IT Department, TBS, University of Tunis
Senior Researcher in Artificial Intelligence, Optimization and
scheduling in production systems

Academic Year 2021-2022

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 Chapter 1: Introduction to operations management
 Chapter 2: Project management
 Chapter 3: Forecasting
 Chapter 4: Inventory Management
 Chapter 5: Material Requirement Planning
 Chapter 6: Location and Layout Strategy
 Chapter 7: Short-term Scheduling

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 Learning Objectives:
◦ Know what project management is and why it is important

◦ Know the different ways projects can be structured

◦ Know how to determine the “critical path” for a project

◦ Know how to “crash” or reduce the length of a project.

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 Project is a series of related jobs usually directed toward
some major output and requiring a significant period of time
to perform
 Project Management are the management activities of
planning, directing, and controlling resources (people,
equipment, material) to meet the technical, cost, and time
constraints of a project

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 A firm should have the right mix of projects that best
support a company strategy
 Projects should be selected from the following types:
◦ Derivative Projects; incremental changes
◦ Breakthrough Projects; major changes
◦ Platform Projects; fundamental improvements to existing
products

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 Projects can be categorized in four major areas:
◦ Product change
◦ Process change
◦ Research and development
◦ Alliance and Partnership

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 There are three main organizational structures will be
used to tie the project to the parent firm:
◦ Pure project
◦ Functional project
◦ Matrix project

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 A pure project is where a self-contained team works
full-time on the project

 Advantages
◦ The project manager has full authority over the project
◦ Team members report to one boss
◦ Shortened communication lines
◦ Team pride, motivation, and commitment are high

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 Disadvantages
◦ Duplication of resources
◦ Organizational goals and policies are ignored
◦ Lack of technology transfer
◦ Team members have no functional area "home"

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A functional project is housed within a
functional division
President

Research and
Engineering Manufacturing
Development

Project Project Project Project Project Project Project Project Project

A B C D E F G H I

Example, Project “B” is in the functional

area of Research and Development. 10
 Advantages
◦ A team member can work on several projects

◦ Technical expertise is maintained within the functional area

◦ The functional area is a “home” after the project is completed

◦ Critical mass of specialized knowledge

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 Disadvantages
◦ Aspects of the project that are not directly related to the
functional area get short-changed

◦ Motivation of team members is often weak

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 President

Research and
Engineering Manufacturing Marketing
Development

Manager
Project A

Manager
Project B

Manager
Project C

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 Advantages

◦ Enhanced communications between functional areas

◦ Pinpointed responsibility
◦ Duplication of resources is minimized
◦ Functional “home” for team members
◦ Policies of the parent organization are followed

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 Disadvantages
◦ Too many bosses
◦ Depends on project manager’s negotiating skills
◦ Potential for sub-optimization

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The work breakdown structure defines the hierarchy of project
tasks, subtasks and work packages.

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 A task: is a further subdivision of a project
 Activities: pieces of work within a project that
consume time.
 A work package: is a group of activities assigned to a
single unit
 Project Milestone: A specific event in a project

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 A project is made up of a sequence of activities that form a
network representing a project
 The path taking longest time through this network of
activities is called the “critical path”
 The critical path provides a wide range of scheduling
information useful in managing a project
 Critical Path Method (CPM) helps to identify the critical
path(s) in the project networks

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 Critical Path Method (CPM)
◦ Used when activity times are known with certainty
◦ Used to determine timing estimates for the project, each activity
in the project, and slack time for activities

 Time-Cost Models
◦ Used when cost trade-off information is a major consideration in
planning
◦ Used to determine the least cost in reducing total project time

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1. Activity Identification
2. Activity Sequencing and Network Construction
3. Determine the critical path
4. Determine the early start/finish and late start/finish
schedule

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Consider the following consulting project:
Activity Designation Immed. Pred. Time (Weeks)
Assess customer's needs A None 2
Write and submit proposal B A 1
Obtain approval C B 1
Develop service vision and goals D C 2
Train employees E C 5
Quality improvement pilot groups F D, E 5
Write assessment report G F 1

Develop a critical path diagram and determine the

duration of the critical path and slack times for all
activities.
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Act. Imed. Pred. Time

A None 2
B A 1
C B 1
D C 2
E C 5
F D,E 5
D(2)
G F 1

A(2) B(1) C(1) F(5) G(1)

E(5)

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 ES=4
EF=6

ES=0 ES=2 ES=3 D(2)

ES=9 ES=14
EF=2 EF=3 EF=4 EF=14 EF=15

A(2) B(1) C(1) F(5) G(1)

ES=4
EF=9
Hint: Start with ES=0
and go forward in the E(5)
network from A to G.

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 ES=4
EF=6

ES=0 ES=2 ES=3 D(2)

ES=9 ES=14
EF=2 EF=3 EF=4 LS=7 EF=14 EF=15
LF=9
A(2) B(1) C(1) F(5) G(1)
ES=4
LS=0 LS=2 LS=3 EF=9 LS=9 LS=14
LF=2 LF=3 LF=4 LF=14 LF=15
E(5)
Hint: Start with LF=15 or
the total time of the project LS=4
and go backward in the LF=9
network from G to A. 24
 ES=4
Slack time=(7-4)=(9-6)= 3 Wks
EF=6

ES=0 ES=2 ES=3 D(2)

ES=9 ES=14
EF=2 EF=3 EF=4 LS=7 EF=14 EF=15
LF=9
A(2) B(1) C(1) F(5) G(1)
ES=4
LS=0 LS=2 LS=3 EF=9 LS=9 LS=14
LF=2 LF=3 LF=4 LF=14 LF=15
E(5)

LS=4 Duration=15 weeks

LF=9

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 Slack Time: The time that an activity can be delayed without causing
another task to be delayed or impacting the completion date of the project.

 Critical Path: The sequence of activities in a project that forms the longest
chain in terms of their time to complete. The path contains zero slack time

 Early start schedule: A project schedule that lists all activities by their early
start times

 Late start schedule: A project schedule that lists all activities by their late
start times. This schedule may create savings by postponing purchases of
material and other costs associated with the project.

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 A relationship between activity completion time and
the cost of a project.
 There are two types of costs:
◦ Direct costs: used to expedite an activity
◦ Indirect costs: used to sustain the project

 Find the optimum point in a time-cost trade-Off.

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 Step1-- Prepare a CPM-type network diagram; for each activity
this diagram should list;
◦ Normal Cost: the lowest expected activity costs
◦ Normal time: the time associated with each normal cost
◦ Crash time: the shortest possible activity time
◦ Crash cost: the cost associated with each crash time

 Step2-- Determine the cost per unit of time to expedite each

activity; the relationship between activity time and cost may be
shown graphically by plotting CC and CT coordinates with NC and
NT coordinates. Slope formula = (CC-NC)/(NT-CT)
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 Step 3: Compute the critical path
 Step 4: Shorten the critical path at the least cost
◦ 1- Reduce the path time by one unit (day) using the lowest-cost
activity
◦ 2- Recompute and find the new critical path and reduce it by one
unit time also.
◦ 3- Repeat (1-2) until the completion time is satisfactory, or until,
there can be no further reduction in the project completion time

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30
 Operations and supply Management, The Core, F. Robert
Jacobs, Richard B. Chase, McGRAW-Hill International Edition,
2008.
 Operations Management: An International Perspective, David
Barnes, Thomson Edition, 2008.
 Operations Management: Contemporary Concepts and Cases,
Roger G. Schroeder, McGraw-Hill International Edition, Fourth
Edition 2008.

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