PROJECT MANAGEMENT

LESSON 10
Project Planning –
Advanced Scheduling Technique Cont’.
PhD.Vu Tuan Anh

1
Probability of Finishing by a Target Date 1/2
a: optimistic time
b: persimistic time
m: most likely
te: expected time

Beta probability
distribution
a, b are parameters
m end-point (most
frequent value)

2
Probability of Finishing by a Target Date 2/2

Variance

Z score Probability

3
Example

4
What is a probability of completing the project within 140 days?

16%

5
Managing Risks in Projects

6
 Risk: Definition
“When our world was created, nobody
remembered to include certainty”
Peter Bernstein (1996)

Risk ~ Uncertainty

Risk can not be eliminated, but it can be

reduced.
7
 Risk Management

Risk = f(likelihood, impact)

8
 Identifying Risks: Techniques

• Project Analogy
• Checklist (Risk sources; Risk level)
• WBS
• Process Flowchart
• Network diagram
• Cause and Effect diagram
• Delphi Technique

9
Identifying Risks: Cause – Effect Diagram

10
 Risk Assessment: Risk likelihood

CLF = (W1)MH + (W2)CH + (W3)MS + (W4)CS + (W5)D

11
0=<WI<=1 W1+W2+…+WN=1.
Risk Assessment: Risk Impact 1/2

12
Risk Assessment: Risk Impact 2/2

CIF = (W1)TI + (W2)CI + (W3)SI

13
Risk Assessment: Risk Consequence

Risk Consequence = Impact x Likelihood

14
Risk - Priority

15
Solution to Exercise in
Lecture 8

16
Task ID Description Duration Precedent
A Prepare office 12
B Procure equipment 8
C Design tests 5
D Install equipment 10 A and B
E Test system 10 C and D
F Train users 5 E

17
 Project – Make Table

Design Desk-top Desk - sides Table-Assembled

•Gather •Make the •Make the •Assemble

requirements Desk-top Desk-sides the desk
•Measure
•Design table

ID Description Duration Predecessors

A Gather requirements 2h
B Measure 0.5h A
C Design table 2h B
D Make the desk-top 3h C
E Make the desk-sides 4h C
F Assemble the desk 3h D,E

Start A B C F End

E 18
Solution to Exercise in
Lecture 9

19
Activity Precedent Normal Normal Cost Crash Duration Crash Cost Expedite Cost
Duration ($ Thounsand) ($ Thounsand) Slope ($/day)
A - 6 6 3 9 1
B A 9 9 5 12 0.75
C B 3 4.5 2 7 2.5
D B 5 10 2 16 2
E C,D 2 2 2 2
F C 4 6 1 10 1.3
G E,F 8 8 5 10 0.67

For each saving day, project would get a bonus of $500 from the
investor. Determine the minimum cost of this project.
4,1,1.3
3,2,2.5

C F
6,3,1 9,5,0.75 2,2 8,5,0.67

Start A B E G End
5,2,2

Critical Path: D

ABCFG & ABDEG 20

 4,1,1.3
3,2,2.5

C F
6,3,1 9,5,0.75 2,2 8,5,0.67

Start A B E G End
5,2,2

Critical Path: D

ABCFG & ABDEG

Duration (day) Activity Crashed Direct Cost ($) Bonus ($) Total Cost ($)
30 (normal) - 45.500 - 45.500
29 G 45.500+670 -500 45.670
28 G 45.500+670+670 -1.000 45.840
27 G* 45.500+670+670+670 -1.500 46.010
26 B 45.500+670+670+670+750 -2.000 46.260

Project Paths Normal Duration Crash 1 Crash 2 Crash 3

ABCFG 30 29 28 27
ABDEG 30 29 28 27
ABCEG 28 27 26 25

The minimum cost of this project is $45.500 21