MELJUN CORTES,MBA,MPA,BSCS,ACS

Operations Management
MELJUN CORTES,BSCS,ACS Department of ICT Faculty of Information Technology

MELJUN

MELJUN CORTES,MBA,MPA,BSCS,ACS

CHAPTER

17

Project Management

MELJUN

MELJUN CORTES,MBA,MPA,BSCS,ACS

Projects
MAR APR MAY JUN

JAN
Build A A Done Build B B Done Build C C Done Build D Ship

FEB

On time!

Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame.

MELJUN CORTES,MBA,MPA,BSCS,ACS

Project Management

How is it different?

Limited time frame • Narrow focus, specific objectives • Less bureaucratic

Why is it used?

Special needs • Pressures for new or improves products or services

MELJUN CORTES,MBA,MPA,BSCS,ACS

Project Management

What are the Key Metrics

Time • Cost • Performance objectives

What are the Key Success Factors?

Top-down commitment • Having a capable project manager • Having time to plan • Careful tracking and control • Good communications

MELJUN CORTES,MBA,MPA,BSCS,ACS

Project Management

What are the Major Administrative Issues?

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
• • •

MELJUN CORTES,MBA,MPA,BSCS,ACS

Project Management

What are the tools?

Work breakdown structure • Network diagram • Gantt charts • Risk management

MELJUN CORTES,MBA,MPA,BSCS,ACS

Planning and Scheduling
MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Gantt Chart
Locate new facilities Interview staff Hire and train staff Select and order furniture Remodel and install phones Move in/startup

MELJUN CORTES,MBA,MPA,BSCS,ACS

Key Decisions

• • • • • •

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

MELJUN CORTES,MBA,MPA,BSCS,ACS

Project Manager

Responsible for:

Work Human Resources Communications

Quality Time Costs

MELJUN CORTES,MBA,MPA,BSCS,ACS

Ethical Issues

• • • • • •

Temptation to understate costs Withhold information Misleading status reports Falsifying records Comprising workers’ safety Approving substandard work

MELJUN CORTES,MBA,MPA,BSCS,ACS

Project Life Cycle

Feasibility

Management

Concept

Planning Execution Termination

MELJUN CORTES,MBA,MPA,BSCS,ACS

Work Breakdown Structure
Project X Project X

Figure 17.2

Level 1 Level 2 Level 3 Level 4

MELJUN CORTES,MBA,MPA,BSCS,ACS

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

MELJUN CORTES,MBA,MPA,BSCS,ACS

The Network Diagram

• • • • •

Network (precedence) diagram Activity-on-arrow (AOA) Activity-on-node (AON) Activities Events

MELJUN CORTES,MBA,MPA,BSCS,ACS

The Network Diagram (cont’d)

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

Project Network – Activity on Arrow
Figure 17.4 AOA
Locate facilities Order furniture

MELJUN CORTES,MBA,MPA,BSCS,ACS

4
Furniture setup

2
Remodel

1
Interview

5

Move in

6

3

Hire and train

Project Network – Activity on Node
Figure 17.4
Order furniture Locate facilities Furniture setup

MELJUN CORTES,MBA,MPA,BSCS,ACS

2

AON

1
Remodel

6
Move in

S
Interview Hire and train

5

7

3

4

MELJUN CORTES,MBA,MPA,BSCS,ACS

Network Conventions
c a b c

a

b

a

c b

a

c Dummy activity

b

d

MELJUN CORTES,MBA,MPA,BSCS,ACS

Time Estimates

Deterministic

Time estimates that are fairly certain

Probabilistic

Estimates of times that allow for variation

MELJUN CORTES,MBA,MPA,BSCS,ACS

Example 1
6 weeks

Figure 17.5
Deterministic time estimates
8 weeks te ca ies Lo ilit fac
In t

2

r rde ure O it urn f Rem od e l 11 weeks

4
re n i tu Fur p u set

3 weeks

1

5
an re Hi 9 weeks in ra dt

Move in 1 week

6

er vi 4 weeks ew

3

MELJUN CORTES,MBA,MPA,BSCS,ACS

Example 1 Solution

Critical Path

P

a t h

L e n g t h S
( w e e k s )

la c k 2 0 6

1 - 2 - 3 - 4 - 5 1 - 86 1 - 2 - 5 - 6 2 0 1 - 3 - 5 - 6 1 4

MELJUN CORTES,MBA,MPA,BSCS,ACS

Computing Algorithm

Network activities

ES: early start • EF: early finish • LS: late start • LF: late finish

Used to determine

Expected project duration • Slack time • Critical path

MELJUN CORTES,MBA,MPA,BSCS,ACS

Probabilistic Time Estimates

Optimistic time

Time required under optimal conditions

Pessimistic time

Time required under worst conditions

Most likely time

Most probable length of time that will be required

MELJUN CORTES,MBA,MPA,BSCS,ACS

Probabilistic Estimates

Figure 17.8

to Activity start Optimistic time

tm

te

tp Pessimistic time

Most likely time (mode)

MELJUN CORTES,MBA,MPA,BSCS,ACS

Expected Time

te

to + 4tm +tp = 6

te = expected time to = optimistic time tm = most likely time tp = pessimistic time

MELJUN CORTES,MBA,MPA,BSCS,ACS

Variance

σ

2

(tp – to)2 = 36

σ 2 = variance to = optimistic time tp = pessimistic time

MELJUN CORTES,MBA,MPA,BSCS,ACS

Example 5
Most likely time Pessimistic time

Optimistic time

-4 -3 1 a 3-4-5 d

2-4-6 b 3-5-7 e 4-6-8 h

5-7-9 f -6 -4 i 3

5 32- c

6 32- g

MELJUN CORTES,MBA,MPA,BSCS,ACS

Path Probabilities

Specified time – Path mean Z = Path standard deviation

Z indicates how many standard deviations of the path distribution the specified tine is beyond the expected path duration.

MELJUN CORTES,MBA,MPA,BSCS,ACS

Example 6
17 Weeks

1.00 a-b-c 10.0 Weeks

d-e-f 16.0 1.00 g-h-i 13.5 Weeks Weeks

MELJUN CORTES,MBA,MPA,BSCS,ACS

Time-cost Trade-offs: Crashing
Crash – shortening activity duration Procedure for crashing
• • • •

• •

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

MELJUN CORTES,MBA,MPA,BSCS,ACS

Time-Cost Trade-Offs: Crashing
Total cost Expected indirect costs

Figure 17.11

Shorten

Cumulative cost of crashing Optimum

CRASH Shorten

MELJUN CORTES,MBA,MPA,BSCS,ACS

Example 7

6

a

10 b

2 f 4 d
9 e

5 c

MELJUN CORTES,MBA,MPA,BSCS,ACS

Advantages of PERT

• • •

Forces managers to organize Provides graphic display of activities Identifies
• •

Critical activities Slack activities
1

4 2 5 6

3

MELJUN CORTES,MBA,MPA,BSCS,ACS

Limitations of PERT

• • •

Important activities may be omitted Precedence relationships may not be correct Estimates may include a fudge factor May focus solely on critical path
1 4 2

5

6

142 weeks 3

Technology for Managing Projects

MELJUN CORTES,MBA,MPA,BSCS,ACS

Computer aided design (CAD) • Groupware (Lotus Notes) • Project management software

CA Super Project • Harvard Total Manager • MS Project • Sure Track Project Manager • Time Line

MELJUN CORTES,MBA,MPA,BSCS,ACS

Advantages of PM Software

• • • • • • • •

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

MELJUN CORTES,MBA,MPA,BSCS,ACS

Project Risk Management

Risk: occurrence of events that have undesirable consequences
• • • •

Delays Increased costs Inability to meet specifications Project termination

MELJUN CORTES,MBA,MPA,BSCS,ACS

Risk Management

• • • •

Identify potential risks Analyze and assess risks Work to minimize occurrence of risk Establish contingency plans

MELJUN CORTES,MBA,MPA,BSCS,ACS

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

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.