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PROJECT MANAGEMENT PERT/CPM

MANAGEMENT SCIENCE By K. Venkaiah Babu MBA., (Ph D)
Science & Humanities Dept.,

Sri Sarathi
Institute of Engineering & Technology

LECTURE OUT LINE
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Introduction to Project Management To understand the project Life Cycle
1. Project Planning 3. Project Scheduling 2. W B S 4. Project Control

To apply tools and technique's

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Gantt chart /& Mail stone chart CPM PERT & Probabilistic Activity Times

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Project Crashing and Time-Cost Trade-off Describe how CPM / PERT have developed and merged together to provide a useful technique for managing projects.

What is Project?

Definition:

“Set of inter-related activities”
to plan, implement, and control the management of large, one time projects Used in Construction, Shipbuilding, Weapons, Systems Development, etc. Applies to uncertain technology projects Applies to variable cost resource allocation

Unique, one-time operation activity or effort

Application:

 

Project Characteristics  Set of Activities Single unit Money & Time related    General purpose High labor skills required  .

Project Elements
       

Objective of Project Management Scope (Limitations / Boundary) Contract requirements Schedules Resources (Physical) Personnel (Psychological) Control Risk and problem analysis

Generic Project Life Cycle

EXAMPLES OF PROJECTS

Examples of Projects  Building construction    .

Examples of Projects   Building construction New product introduction New! Improved! 9” Nude Sandalfoot Medium to Tall (B) No nonsense .

Examples of Projects    Building construction New product introduction Training seminar .

Examples of Projects     Building construction New product introduction Training seminar Research project .

Examples of Projects       Building construction New product introduction Training seminar Research project S/W development Planning concert. football games. or basketball tournaments .

and activities  Work breakdown structure  . and expected result of a project  Statement of work  written description of objectives of a project breaks down a project into components. subcomponents. justification.Project Scope  Scope statement  A document that provides an understanding.

tools and techniques to project activities in order to meet project requirements.  is a science. Project Management…  is an art.  has a set of tools and methods.What is Project Management? (PM) PM is the application of knowledge.  . skills.

Effective Project Managers Qualities of Project Manager: Project Manager is the most important member of project team      Lead by example Visionaries Technically competent Decisive/pivotal Good communicators     Good motivators Stand up to exert when necessary Support team members Encourage new ideas .

depending on skills required .Process of Project Management    Project Planning Project Scheduling Project Control  Project Team made up of individuals from various areas and departments within a company  Matrix Organization  a team structure with members from functional areas.

deliverables Lowest element – stand alone work package       Identify tasks relationship Identify possible risks Estimate work packages (people. etc. time.) Create initial schedule Iterate plan (Procedure) Document .Mechanism of Planning   Define project objective (SMART) Define work breakdown structure (WBS)   Identify tasks and subtasks -.

budget  Allocate resources   Benchmark to measure progress . equipment and facilities.Benefits of the Planning  Framework for communication  Clients and coworkers Personnel.

OBJECTIVES OF PROJECT MANAGEMENT .

.Objectives of Project Management    To complete project within elapsed time To ensure optimum utilization of available resources without delay To complete a project with a minimum of capital investment.

PROJECT MANAGEMENT PROCESS .

Organization .Project Management Process Planning     Objectives Resources Work breakdown sched.

Organization   Project activities Start & end times Network .Project Management Process Planning    Scheduling   Objectives Resources Work breakdown sched.

revise. compare. Organization   Project activities Start & end times Network Controlling  Monitor. action .Project Management Process Planning    Scheduling   Objectives Resources Work breakdown sched.

PROJECT PLANNING .

Project Planning      Establishing objectives Defining project Creating work breakdown structure (WBS) Determining resources Forming organization .

Work Breakdown Structure (WBS)   First Step in Project Management Begins with a Work Breakdown    Lists the “WHAT‟ of a Project Begins with Finished Project Consists of Tree Chart. progressively break work down into work packages Roll up the packages for bottom up estimating Packages give clear work assignments   Splits work into manageable. logical packages Make sure packages can be tested for completeness . with Each Branch Listing the “WHAT‟s” at that Level  Then List Each Task that Must Be Completed to Accomplish the “WHAT”    Start at top.

Make Offer.Find Real Estate Agent .Determine mortgage provider .Determine affordability .Criteria 3 . Elemental Tasks .Lockup mortgage commitment 6 2 . P&S Agreem't 1 .Look for House .Closing Top Down Decomposition.Ex: WBS Buy a House ` BUY A HOUSE LOCATION FINANCING FIND HOUSE .Type of House .Visit Locations 4 7 5 8 9 10 .

Project Organization .

Acct. .Project Organization     Often temporary structure Uses specialists from entire company Headed by project manager  Coordinates activities  Monitors schedule & costs Eng. structure called „matrix organization‟ Mgr. Eng. Permanent Mkt.

PROJECT SCHEDULING .

Project Scheduling      Sequencing activities Identifying precedence relationships Determining activity times & costs Estimating material & worker requirements Determining critical activities .

Project Scheduling Techniques Gantt chart  Critical Path Method (CPM)  Program Evaluation & Review Technique (PERT)  .

Project Scheduling Techniques More popular Techniques of Network are:  CPM Critical Path Method  PERT Programme Evaluation and Review Method  LCS Least Cost Method  RAMS Resource Allocation and Multi-project Scheduling  MAP Manpower Allocation Procedure  RPSM Resource Planning and Scheduling Method  GERT Graphical Evaluation and Review Technique .

PROJECT CONTROL .

forecasting its completion date and cost and measuring schedule and budget variation   Communication Enterprise project management .Project Control Periodical check list concerned with:  Time management  Cost management  Quality management  Performance management  Earned Value Analysis  a standard procedure for numerically measuring a project‟s progress.

GANTT CHART .

. He refined production control and cost control techniques. These Gantt charts were employed on major infrastructure projects including the Hoover Dam and Interstate highway system.Gantt Chart Gantt Chart was developed by…  Henry Laurence Gantt (1861-1919) was a mechanical engineer and management consultant who is most famous for developing the „Gantt chart‟ in the 1910s.

Example of Gantt Chart
0
Activity Design house and obtain financing

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2

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Month 4

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6

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8

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10

Lay foundation
Order and receive materials Build house Select paint Select carpet Finish work

1

3 Month

5

7

9

Gantt Chart Activities in Buy a House
` BUY A HOUSE LOCATION FINANCING FIND HOUSE - Type of House - Find Real Estate Agent - Look for House - Make Offer, P&S Agreem't

1

- Criteria

3

- Determine affordability - Determine mortgage provider - Lockup mortgage commitment

6

2

- Visit Locations

4

7

5

8

9

TASK 1-criteria 2-visit loc. 3-affordability 4-mortgage co 5-mortg lock 6-type of hse 7-real est agent 8-look for hse 9-offer, P&S 10-closing

PREDECESSOR 3 1 3 4 1 2, 6 7 5, 8 9

10

- Closing

Gantt Chart Buy a House
TASK 1-criteria 2-visit loc. 3-affordability 4-mortgage co 5-mortg lock 6-type of hse 7-real est agent 8-look for hse 9-offer, P&S 10-closing PREDECESSOR 3 1 3 4 1 2, 6 7 5, 8 9

Simple Gantt Chart View

Limitations of Gantt Chart .

CPM & PERT .

Allen & Hamilton • • Consider precedence relationships & interdependencies Each uses a different estimate of activity times .CPM & PERT • • Network techniques Developed in 1950‟s • • CPM by DuPont for chemical plants In 1957 suitable for Civil & Mechanical Projects PERT by U.S. Navy for Polaris missile in 1958 consulting with M/s Booz.

CPM & PERT Steps • • • • • Identify activities Determine sequence Create network Determine activity times Find critical path • • • Earliest & Latest start times Earliest & Latest finish times Slack or Float .

? (Duration) Critical activities? Enough resources available? How can the project be finished early at the least cost? ...Questions Answered by PERT & CPM • • • • • • Completion date? On schedule? Within budget? Probability of completing by .

Constructing Networks .

Uses Nodes and Arrows Arrows  An arrow leads from tail to head directionally A node is represented by a circle or any mathematical symbol Node Arrow  Nodes  .Graphical Representation of Events and Activities   Flow Charting .

Node 1 is Begin. Node 3 is Complete Task 2 1 2 3 .Activity On Node (AON)    Task is Represented by Node as the Completion of an Activity Arrows Represent the Sequential Linkages Between Activities For Example. Node 2 is Complete Task 1.

Activity 1 .i.e.2 1 2 .Activity On Arrow (AOA)    Task is Represented by an Arrow Bounded on Either End by a Node (Event) Each Event is Identified by a Number The Activity is Designated by the Leading Event Number and the Following Event Number .

Designating Task Relationships  Sequential vs. Concurrent Activities 1 2 3 Sequential Task Relationship 2 1 3 4 Concurrent Task Relationships .

but Take No time or Resources 2 Dummy Activity 2-3 indicates that both Activities 1-2 and 2-3 must be Completed before beginning Activity 3-4 1 4 3 .Designating “DUMMY” Activities   Represented by Dashed Arrows Show Sequential Relationships Among Tasks.

B. study etc. 4 Years Activity (Arrow) Receive degree 2 Event (Node) . Tech. Register 1 Event (Node) Attend class.Network Terms Project: Obtain a college degree .

Activity Relationships .

Activity Relationships 1 .

Activity Relationships 2 A 1 B A & B can occur concurrently 3 .

Activity Relationships A must be done before C & D can begin A 2 C D 1 B 4 3 .

Activity Relationships 2 A D C 1 B 4 E B & C must be done before E can begin 3 .

Activity Relationships A must be done before C & D can begin A 2 C D 1 B A & B can occur concurrently 4 E B & C must be done before E can begin 3 .

.Dummy Activities  Activities are defined often by beginning & ending events  Example: Activity 2-3  Every activity must have unique pair of beginning & ending events It is an imaginary activity  Consume no Time or Resources   Dummy activities maintain precedence or logical sequence of activities.

Dummy Activities Example .

Dummy Activities Example Incorrect 2-3 1-2 3-4 1 2 2-3 3 4 .

same designation .Dummy Activities Example Incorrect 1-2 2-3 3-4 1 2 2-3 3 4 Different activities.

Dummy Activities Example Incorrect 1-2 2-3 3-4 1 Correct 1-2 2 2-3 2-4 3 4 4-5 1 2 2-3 4 5 3 3-4: Dummy activity .

Some more Example of Dummy Activities Ex – I A Printing invitation Cards B Collection of Address C Dispatching of Cards A 2 2-3: Dummy activity 1 B 3 C 4 .

Some more Example of Dummy Activities Ex – II If A & E are concurrent B is after A & E and F is after E A B E F .

is numbered. Fulkerson’s rules:  There is a single initial event in the net work diagram.  Continue this operation until the last event. Number this initial event as 1. This initial event will have arrows coming out of it and none entering it. 4 … etc. which has no emerging arrows.  Follow rule – 3.Labeling the Events by Dr. 3.  Number these apparently produced new initial events as 2. This will create few more initial evens. Doing so.  Neglect all the arrows emerging out of the initial event numbered 1. .  Again neglect all emerging arrows from these numbered events. Fulkerson’s Rules: Numbering the events by DR. it will apparently provide one or more new initial events.

Numbering the Events D B A o A C q G H m n s I J t p F r .

Network Example You‟re a project manager for Bechtel. F . Activity A B C D E F G H Predecessors -A A B B C D E. Construct the network.

AON D B G A E Z C F H .Network Example .

F Rough arrow diagram 3 D E 5 F 4 6 G 8 7 9 B 1 A 2 C H .Network Example .AOA Activity A B C D E F G H Predecessors -A A B B C D E.

AOA 3 D E 5 B 1 A 2 6 H G 7 C 4 F Final Arrow Diagram .Network Example .

civil construction projects etc. plant maintenance.C P M Technique .foretaste         Activity oriented technique Single Time estimation Designed for repetitive projects Not Statistically analyzed Demarcates critical activities Dummy activities are not necessary Employs words like arrow diagram. . nodes and floats etc Suitable for industrial settings.

None Description Prepare Site Pour fdn. Roof Do interior work Landscape Move In Time (Wks) A B C D E F G A B B D C F. E 1 6 3 2 3 4 1 . & frame Buy shrubs etc.Critical Path Analysis Example Event ID Pred.

1-2 Description Prepare Site Pour fdn. & frame Buy shrubs etc..Critical Path Analysis Example Event ID Acty. Roof Do interior work Landscape Move In Time (Wks) A B C D E F G 2-3 3-4 3-5 5-6 4-6 6-7 1 6 3 2 3 4 1 .

1-2 A B C D E F G B.3 4 F.15 (Critical Path) C.1 A..6 G.1 2-3 6 7 3 1 2 E.Event ID Critical Path Analysis Example Acty.3 3-4 D.4 1-2-3-5-6-7 - 13 .2 5 3-5 5-6 4-6 Different paths from network: 6-7 1-2-3-4-6-7 .

Earliest Start Time & Finish Steps • • Begin at starting event & work forward EST = 0 for starting activities • EST is earliest start • EFT = EST + Activity time • EFT is earliest finish • EST = Maximum EFT of all predecessors for non-starting activities .

. EFT is earliest finish • LST = LFT .Latest Start Time & Finish Steps • • Begin at ending event & work backward LFT = Maximum EFT for ending activities • LFT is latest finish.Activity time • LST is latest start • LFT = Minimum LST of all successors for non-ending activities.

ES 0 1 1 1 7 6 3 7 10 2 7 9 3 9 11 4 14 10 1 14 15 Latest LS 0 1 7 9 11 10 12 LF 1 7 10 11 14 14 15 Slack 0 0 0 2 3 0 0 . Activity A 1-2 B 2-3 C 3-4 D 3-5 E 5-6 F 4-6 G 6-7 Earliest Act. Latest & Slack durations.Compute Earliest. EF Dura.

PERT & Time Estimates .

events and Slack etc .foretaste       Event oriented technique Three time estimation Use of dummy activities are required – representing the proper sequence A probabilistic model with uncertainty in activity duration Analyzed statistically Employs words Network diagram.PERT Technique .

One Time Estimate per Activity PERT .Activity Time Estimates   CPM .Three Time Estimates per Activity    to = Optimistic Time Estimate tm = Most Likely Time Estimate tp = Pessimistic Time Estimate  Can Calculate Activity Mean Time Estimate and Variance .

to )/6 Can Use Central Limit Theorem to Estimate Project Time .PERT Time Estimates   Activity Mean Time Estimate = te Activity Variance Estimate = Sigmae • te = (to + 4tm + tp)/6 • Sigmae = (tp .

Computing the Float value Ft E1 1 L1 Fid Ff E2 t 2 L2 .

Example Network Flow Diagram D 2 5 A 1 C 4 G H I 7 B 3 E F 6 J .

Example Activity Characteristics Activity           a 10 9 1 1 1 5 8 1 6 6 m 12 11 3 8 7 10 13 7 10 10 b 14 13 11 9 13 15 18 19 20 14 te 12 11 4 7 7 10 13 8 11 10 Sigmae 2/3 2/3 5/3 4/3 6/3 5/3 5/3 9/3 7/3 4/3 A B C D E F G H I J 1-2 1-3 2-4 2-5 3-4 3-6 4-5 4-6 5-6 6-7 .

Example Network Flow Diagram te =12 1 2 te =7 te =4 te =7 5 te =13 4 te =11 te =8 6 7 te =11 3 te =10 te =10 .

Earliest Start Time & Finish Steps • • Begin at starting event & work forward EST = 0 for starting activities • EST is earliest start EFT is earliest finish • EFT = EST + Activity time • • EST = Maximum EFT of all predecessors for non-starting activities .

Example Network Flow Diagram ES=12 te =12 ES=0 1 2 te =7 ES=18 4 ES=31 5 te =4 ES=11 te =13 te =8 te =11 ES=42 6 ES=52 7 te =11 te =7 te =10 3 te =10 .

Activity time • • LFT = Minimum LST of all successors for non-ending activities. EFT is earliest finish LST is latest start • LST = LFT . .Latest Start Time & Finish Steps • • Begin at ending event & work backward LFT = Maximum EFT for ending activities • LFT is latest finish.

Example Activity Characteristics to         tm 12 11 3 8 7 10 13 7 10 10 tp 14 13 11 9 13 15 18 19 20 14 te Sigmae EST 12 11 4 7 7 10 13 8 11 10 2/3 2/3 5/3 4/3 6/3 5/3 5/3 9/3 7/3 4/3 0 0 12 12 11 11 18 18 31 42 LST 2 0 14 24 11 32 18 34 31 42 EFT 12 11 16 19 18 21 31 26 42 52 LFT 14 11 18 31 18 42 31 42 42 52   1-2 1-3 2-4 2-5 3-4 3-6 4-5 4-6 5-6 6-7 10 9 1 1 1 5 8 1 6 6 .

Example Network Flow Diagram With Critical Path ES|LS|EF|LF t2-5=7 12|24|19|31 2 5 t5-6=11 t4-5=13 t2-4=4 31|31|42|42 18|18|31|31 t =8 4-6 12|14|16|18 18|34 |26|42 4 t3-4=7 11|11|18|18 6 3 t1-2=12 0|2|12|14 1 7 t1-3=11 0|0|11|11 t3-6=10 11|32|21|42 t6-7=10 42|42|52|52 .

Computing the Float value Ft E1 1 L1 Fid Ff E2 t 2 L2 .

Distinction between CPM & PERT CPM    PERT      Activity oriented technique. Not statistically analyzed. . Cost is not directly proportional to time and const is the controlling factor. Where activities cannot be predicted. Analyzed statistically. floats etc. It demarcates critical activities. Designed for repetitive projects. Use of dummy activities are required representing the proper sequence. It has three time estimation. It does not demarcated critical and non-critical activities. It has one time estimate.             Event oriented technique. It employs words like arrow diagram. A probabilistic model with uncertainty in activities duration Cost varies directly with time and time is the controlling factor. plant maintenance. node. It employs words like network diagram. Suitable for industrial settings. Dummy activities are not necessary. A deterministic model with well known activities times based on past experience. Suitable for defense projects and R & D etc. events Slack etc. Suitable for non-repetitive projects. civil construction projects.

Benefits & Limitations of PERT/CPM .

Benefits of PERT/CPM       Useful at many stages of project management Mathematically simple Use graphical displays Give critical path & slack time Provide project documentation Useful in monitoring costs and time .

& stable activities Specified precedence relationships Activity times (PERT) follow beta distribution Subjective time estimates Over emphasis on critical path .Limitations of PERT/CPM      Clearly defined. independent.

Conclusion       Explained what a project is Summarized the CPM / PERT project activities and their time estimates Drew project networks Compared PERT & CPM Determined slack & critical path Computed project probabilities .

Project Management PERT/CPM THE END .