Professional Documents
Culture Documents
Topics
Introduction
Project management activities
Structuring projects
Project management techniques
Gantt Charts
Network models (PERT & CPM)
Deterministic & probabilistic activity times
Time-cost models & project crashing
Limitations
Project
Planning
Scheduling
Objectives
Project activities
Resources
Start & end times
Work break-down
schedule Network
Organization
Controlling
Monitor, compare, revise, action
Project Planning, Scheduling, &
Controlling
Project Team
One functional department
Cross-functional
Pure Project
A self-contained team works full-time
on the project
Advantages
Project manager has full authority
Team members report to one boss
Shortened communication lines
Team pride, motivation, and commitment
high
Pure Project
Disadvantages
Duplication of resources
Organizational goals and policies are
ignored
Lack of technology transfer
Team members have no functional area
"home"
Functional Project
Research and
Engineering Manufacturing
Development
President
Research and
Engineering Manufacturing Marketing
Development
Manager
Project A
Manager
Project B
Manager
Project C
Matrix Project
Advantages
Enhanced communications between
functional areas
Pinpointed responsibility
Duplication of resources minimized
Functional “home” for team members
Policies of the parent organization followed
Matrix Project
Disadvantages
Too many bosses
Depends on project manager’s negotiating
skills
Potential for sub-optimization
Role of Project Manager
Highly visible
Responsible for making sure that:
All necessary activities are finished in order
and on time
Project comes in within budget
Project meets quality goals
People assigned to the project receive
motivation, direction, and information
Role of Project Manager
Control starts
Project Control Reports
Detailed cost breakdowns for each task
Total program labor curves
Cost distribution tables
Functional cost and hour summaries
Raw materials and expenditure forecasts
Variance reports
Time analysis reports
Work status reports
Project Scheduling
Identifying precedence relationships
Sequencing activities
Determining activity times & costs
Estimating material & worker requirements
Determining critical activities
Purposes of Project Scheduling
1. Shows the relationship of each activity to
others & to the whole project
2. Identifies the precedence relationships
among activities
3. Encourages the setting of realistic time and
cost estimates for each activity
4. Helps make better use of people, money,
and material resources by identifying critical
bottlenecks in the project
Scheduling Techniques
1. Ensure that all activities are planned for
2. Their order of performance is accounted
for
3. Activity time estimates are recorded
4. Overall project time is developed
Project Management Techniques
Gantt charts
Bar chart with a bar for each project
activity that shows the passage of time
Network planning models
Gantt Chart
Vertical Axis:
Always Activities Horizontal bars used to denote length
or Jobs of time for each activity or job.
Activity 1
Activity 2
Activity 3
Activity 4
Activity 5
Activity 6
C and D cannot
A C begin until both A C
(d) A and B are
completed
B D B D
B and C cannot
begin until A is
completed. D
A B D cannot begin until A B D
both B and C are
(f) completed. A Dummy
dummy activity is C
C activity
again introduced
in AOA.
A network for building a house
Lay 3 Dummy
Foundation
Build Finish
3 2 House work
1
1 2 4 6 7
Design Order & 3 1
1
house & receive 1
materials Select Select
obtain Paint Carpet
financing 5
Types of Critical Path Methods
A None 2
B A 1
C B 1
D C 2
E C 5
F D,E 5
D(2)
G F 1
E(5)
Activity Scheduling
Forward Pass
Earliest start time (ES)
Earliest finish time (EF)
Backward Pass
Latest start time (ES)
Latest finish time (EF)
Activity Slack
the amount of time an activity can be
delayed without delaying the project
Determine early start and early finish
times
ES=4
EF=6
LS=4
LF=9
Critical Path & Slack
ES=4
Slack=(7-4)=(9-6)= 3 Wks
EF=6
a +4m + b
Mean (expected time): t =
6
b-a 2
Variance: 2 =
6
CPM with 3 Activity Time Estimates
Immediate
Task Predecesors Optimistic Most Likely Pessimistic
A None 3 6 15
B None 2 4 14
C A 6 12 30
D A 2 5 8
E C 5 11 17
F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28
Expected Time Calculations
ET(A)= 3+4(6)+15
6
Immediate Expected
Task Predecesors Time
A None 7 ET(A)=42/6=7
B None 5.333
C A 14 Immediate
Task Predecesors Optimistic Most Likely Pessimistic
D A 5 A None 3 6 15
E C 11 B None 2 4 14
C A 6 12 30
F D 7 D A 2 5 8
E C 5 11 17
G B 11 F D 3 6 15
H E,F 4 G B 3 9 27
H E,F 1 4 7
I G,H 18 I G,H 4 19 28
Duration = 54 Days
C(14) E(11)
A(7) H(4)
D(5) F(7)
I(18)
B G(11)
(5.333)
Probability Exercise 1
What is the probability of finishing this project in
less than 53 days?
p(t < D)
D=53
t
TE = 54
D - TE
Z =
cp
2
P essim . - O ptim . 2
A ctivity v ariance, 2
= ( )
6
path.)
p(t < D)
t
D=53 TE = 54
D - TE 53 - 54
Z = = = -.156
cp
2 41
t
TE = 54
D=56
D - TE 56 - 54
Z = = = .312
cp
2 41
2, 1 3, 1
Rs.6, Rs.10 A D Rs.5, Rs.9
Crashed Activity
Cost
Crash Cost Slope= crash cost per week
Normal Activity
Normal Cost
Weeks
Limitations of CPM
Project activities can be identified as
entities
A clear beginning and ending point for
each activity
Project activity sequence
relationships can be specified and
networked
Limitations of CPM
Project control should focus on critical
path
Activity times follow the beta
distribution, with the variance of the
project assumed to equal the sum of
the variances along the critical path
Earned Value - What is it?
Simply, it is a project monitoring and
measurement system that:
1. establishes a clear relationship between planned
accomplishments and actual accomplishments
2. reinforces and rewards good planning practices
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Earned Value - What is it?
Basic concepts of Earned Value Management
(EVM)
Each task in a project earns value as planned
work is completed
For example (perhaps), if you were paid on this basis,
you would earn $$ at key milestones based on the
value of what you have completed (earned value)
Earned value can be compared to actual cost and
budgeted cost to determine variance and predict
future performance
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Earned Value - What is it?
The budgeted cost (e.g., dollars, person-
hours, person-days, etc.) in terms of your
baseline plan/budget of the work performed
up to a specified point in time
Also known as Budgeted Cost of Work Performed
(BCWP)
Each task in the Work Breakdown Structure
(WBS) is assigned a BCWP based on its
individual cost.
Project BCWP is total of BCWP for all tasks
required to complete the project
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Earned Value Components
Planned Value (a.k.a. BCWS)
How much work (person-hours) you planned to have
accomplished at a given point in time (this is from the
WBS in your plan)
Actual Cost (a.k.a. ACWP)
How much work (person-hours) you have actually spent
at a given point in time
Earned Value (a.k.a. BCWP)
The value (person-hours) in terms of your base budget of
what you have accomplished at a given point in time (or,
% complete X Planned Value)
72
Earned Value: Example Today
18
14
On Day X:
PLANNED VALUE (Budgeted cost of the work scheduled, BCWS) =
18 + 10 + 16 + 6 = 50
EARNED VALUE (Budgeted cost of the work performed, BCWP) =
18 + 8 + 14 + 0 = 40
ACTUAL COST (of the work performed , ACWP) =
45 (from your project tracking - not evident in above chart)
73
Earned Value: Example
Actual Cost: what you Today
have actually spent to
Cost (Person-Hours)
Time (Date)
74
Earned Value: Example
Today
Cost (Person-Hours)
Over
Budget
Behind
Schedule
Time (Date)
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Variance
Any schedule or cost deviation from a
specific plan.
Used within an organization to verify
the budget and schedule for a project
Frequently used as a key component of
plan reviews and performance
measurement
76
Variance
Must compare scheduling and budget
variance at the same time
Schedule variance: deviations from work
planned – not a measure of changes in cost
Cost variance: deviations from the
budget – not a measure of work scheduled vs.
work completed
Example: applying more $$/people to a task may
maintain the schedule, but it adds to cost… schedule
on track… over budget on expenses (cost)
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Performance Indices
Cost Performance Index
CPI = BCWP/ACWP
Schedule Performance Index
SPI = BCWP/BCWS
Analysis
CPI > 1.0 exceptional performance
CPI < 1.0 poor performance
Similar for SPI
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Earned Value & Variance:
Example
18
14
On Day X:
PLANNED VALUE (BCWS) = 18 + 10 + 16 + 6 = 50
EARNED VALUE (BCWP) = 18 + 8 + 14 + 0 = 40
ACTUAL COST (ACWP) = 45 (from your project tracking)
Therefore:
Schedule Variance = BCWP – BCWS = 40 - 50 = -10 (behind schedule)
Schedule Performance Index = 40 / 50 = 0.8, or 80% of plan (a B-, at best)
Cost Variance = BCWP - ACWP = 40 - 45 = -5
Cost Performance Index = 40/45 = .89, or you’re getting an 89¢ return on every
$1.00 (or, person-hour) spent on this project
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Quiz
The EV measurement of work you planned to
have accomplished at a given point in time :
a. BCWP
b. ACSP
c. BCWS
d. ACWS
True or False: At any point in time, the SPI
tells you exactly how far ahead or behind
schedule you are on your project.
a. TRUE
b. FALSE
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Quiz
If BCWP is 20 pm and ACWP is 15 pm, CPI:
a. .75
b. 1.33
c. 1.0
d. 0
If BCWP is 27 pm BCWS is 25 pm, you are
probably:
a. On schedule
b. Ahead of schedule
c. Behind schedule
d. None of the above
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