Project Management

Project Management
Project Planning
Tilahun Teklu (Dr.) lecture for

12/5/2018 1
MBA/EMBA/MSc.in MGMT classes
Contents
1. Determining the sequential logic, i.e. creating the most likely order in which the
activities must occur
2. Creating a project plan from start to finish, i.e. constructing a network diagram
Recall also from previous lecture

• Project goal definition
• Construction of WBS

12/5/2018 2
Project planning
Following the project initiating /conceptualization phase and before implementation

phase is (detailed) project planning
The project planning phase
– Represents the conversion of project goals into an achievable methodology for the completion
– Creates a timetable and reveals the network logic that relates project activities to each other in
coherent fashion
– Defines network logic for all activities; i.e. tasks must either precede or follow other tasks from the
beginning of the project to its completion

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Project planning
Careful project planning is solidly associated

with project success

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Constructing project plan
• Establishes a set of directions in sufficient details to tell the project
team exactly what must be done, when it must be done, what
resources will be required to produce deliverables of the project
successfully
• Is prepared in such a way that the project outcome meets the
objectives of the parent organization
• Is always carried out in an environment of uncertainty and as a result
it must include allowances for risk and features that allow it to be
adaptive
• Must contain controlling system – for controlling the work it prescribes
• Include any constraints on activities and input materials prescribed by
law and society

12/5/2018 5
Project plan
Generic elements of a project plan (the actual contents vary from

situation to situations)
1. Overview – a short summary of the objectives and scope of the project

2. Objectives or scope (see next slide)
3. General approach – managerial and technical approaches to the work
4. Contractual aspects
5. Schedules – outline for activities with their durations and associated
milestone events
6. Resources
7. Personnel
8. Risk Management Plans
9. Evaluation methods
Project plan
Objectives or scope (indicated as element of a project plan)

detailed statements of the general goals noted in the
overview section should include organizational outcome
(profit) and competitive aims as well as technical goals
Contractual aspects – a complete list and description of all
reporting requirements, customer-supplied resources, liaison
arrangements, advisory committees, project review and
cancellation procedures, proprietary requirements, any
specific management agreements, as well as the technical
deliverables and their specifications, delivery schedules, and a
specific procedure for changing any of the above
12/5/2018 7
Project planning (process Model)
Project planning process descriptions vary from industry to industry, from organization to
organization. In IT sector the project planning process has the following phases
1. Concept evaluation
2. Requirements identification
3. Design
4. Implementation
5. Test
6. Integration
7. Validation
8. Customer test and evaluation
9. Operations and maintenance
The action plan
The project’s action plan is a detailed, scheduled plan of the required steps in the
implementation process needs to be developed, including all resource
requirements (money, raw materials, staff, etc.)
In project planning,
• We need to know exactly what is to be done, by whom, and when
• We need to identify and coordinate all activities required to complete the project
• The necessary resources must be available when and where they are needed,
and in the correct amount
• Some activities must be done sequentially, but some may be done simultaneously
If a large project is to come in on time and within cost, a great many things must
happen when and how they are supposed to happen. Yet each of these details is
uncertain and thus each must be subject to risk management
The method of constructing an action plan, therefore, has to be systematic. One
such method ‘a hierarchical planning system’.
hierarchical planning system
The hierarchical planning system for constructing project action

plan and Work Breakdown Structure (WBS)
Break down the work (level 0) into major activities (level 1

activities), each of level 1 activities into tasks (level 2), … .
Each activity has an outcome (event) associated with it, and

these activities and events are decomposed into sub-activities
and sub-events, which , in turn, are subdivided again.
‘Gozinto Chart’ for a toy bus
At the core of project planning is the process of constructing a
network diagram
A network diagram is a schematic display of the project’s sequential activities and the
logical relationships between them
A B C D E
Option A: serial sequential logic
B D
F
A
C E
Option B: Nonserial sequential logic

12/5/2018 12
Project Network
Many of actual projects are large and complex. Since WWII two techniques have been
developed and used to deal with such large or complex projects: PERT/CPM.
PERT: Project evaluation and review technique

CPM: critical path method
The distinction between the two techniques has gradually diminished through time and
we can use CPM representing the integrated logic that each has introduced to the
methodology
CPM can be used to plan, schedule, and control a wide variety of projects:

12/5/2018 13
Example
Suppose administration is considering to modernize a shopping center located somewhere in
Addis Ababa. WBS and logic of sequence is determined for the project activities as follows.
Draw the network diagram
List of activities for WH shopping center

Activitie Activity description Immediate Activity time
s predecessor (in weeks)
A Prepare architectural drawings - 5
B Identify potential new tenants - 6
C Develop prospectus for tenants A 4
D Select contractor A 3
E Prepare building permits A 1
F Obtain approval for building permits E 4
G Perform construction D,F 14
H Finalize contracts with tenants B,C 12
I Tenants move in G,H 2
Total 51
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E F Early start IDENTIFIC Early
ATION Finish
(ES) NUMBER (EF)
Activity
float ACTIVITY DESCRIPTOR
Late start Activity Late Finish

(LS) duration (LF)
A
D
G
C
H I
START I
FINISH

12/5/2018 16
Determining the critical path
A. Find the earliest start time and a latest start time for all activities in the network
ES: earliest start time for an activity

EF: earliest finish time for an activity
T: activity duration
EF = ES + T
B. Find the latest start and latest finish time for all activities in the
network
LS: latest start time for an activity
LF: latest finish time for an activity, and
TO calculate LF, begin with EF time of the project, i.e., the last activity’s early finish and calculate
backward.
LS = LF – t

12/5/2018 17
Dealing with Merge and burst activities
merge activity : An activity with two or more immediate predecessors., tasks flowing into it E.g. G, H, I
activities
Burst activity: An activity with two or more immediate successor activities (tasks flowing out from it), e.g.
activity A
In calculating earliest start for merge activity, take the largest late finish time of those activities which flow
into it
In calculating latest finish time for burst activity, take the smallest late start time of those activities which
flow out from it
Find activity floating time
Float or slack activity time : The amount of time an activity may be delayed from its early start without delaying
the finish of the project
calculate for each activity its slack time
SLACK TIME = LF - EF = LS – ES

12/5/2018 18
Critical path.
A critical path is that path consisting of activities with zero slack time. Observe that such
path determines the longest duration time for the project. Therefore, it is the path
through the project network with longest duration
The work we did so far is what it takes to do the critical path analysis of the project, and
by doing so we answer the following questions:
• How long will the project take to complete?

• What are the scheduled start and completion times for each activity?
• Which activities are critical and must be completed exactly as scheduled to keep the
project on schedule?
• How long can noncritical activities be delayed before they cause an increase in the
completion time for the project?

12/5/2018 19
IDENTIFICATION PREDECESSOR T ES EF LS LF SLACK
NUMBER TIME
A - 5 0 5 0 5 0
B - 6 0 6 6 12 6
C A 4 5 9 8 12 3
D A 3 5 8 7 10 2
E A 1 5 6 5 6 0
F E 4 6 10 6 10 0
G D,F 14 10 24 10 24 0
H B,C 12 9 21 12 24 3
I G,H 2 24 26 24 26 0
51

12/5/2018 20
PERT/CPM critical path procedure.
Step 1. Develop a list of the activities that make up the project.
Step 2. Determine the immediate predecessor(s) for each activity in the project.
Step 3. Estimate the completion time for each activity.
Step 4. Draw a project network depicting the activities and immediate predecessors listed in steps
1 and 2.
Step 5. Use the project network and the activity time estimates to determine the earliest start
and the earliest finish time for each activity by making a forward pass through the network.
The earliest finish time for the last activity in the project identifies the total time required to
complete the project.
Step 6. Use the project completion time identified in step 5 as the latest finish time for the last
activity and make a backward pass through the network to identify the latest start and latest
finish time for each activity.
Step 7. Use the difference between the latest start time and the earliest start time for each
activity to determine the slack for each activity.
Step 8. Find the activities with zero slack; these are the critical activities.
Step 9. Use the information from steps 5 and 6 to develop the activity schedule for the project.

12/5/2018 21
Project scheduling with uncertain activity times
Activitie Activity description Immediate Activity time
s predecessor (in weeks)
A Develop product design -
B Plan market research -
C Prepare routing (manufacturing
engineering)
A
D Build prototype model A
E Prepare marketing brochure A
F Prepare cost estimates (industrial
engineering)
C
G Do preliminary product testing D
H Complete market survey B,E
I Prepare pricing and forecast report H
Prepare final report F,G,I
Total

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C F
A
D G J
FINISH
E H
I
START I

12/5/2018 23
Project scheduling with uncertain activity times
Under such conditions, three time estimates are forecasted:
a) M = Time estimate under most likely condition (most probable time estimate)
b) B = Time estimate under worst condition (pessimist time estimate)
c) A = Time estimate under best condition ( optimist time estimate)
Using these three time estimates, we develop expected time using beta distribution ( a
probability distribution having

12/5/2018 24
Activities Activity description Optimistic (a) Most probable (m) Pessimistic (b) Expected time Variance
T
A Develop product 4 5 12 6 1.78

design
B Plan market research 1 1.5 5 2 0.44
C Prepare routing 2 3 4 3 .11

(manufacturing
engineering)
D Build prototype 3 4 11 5 1.78
model
E Prepare marketing 2 3 4 3 .11
brochure
F Prepare cost 1.5 2 2.5 2 .03
estimates (industrial
engineering)
G Do preliminary 1.5 3 4.5 3 0.25
product testing
H Complete market 2.5 3.5 7.5 4 .69
survey
I Prepare pricing and 1.5 2 2.5 2 .03
forecast report
j Prepare final report 1 2 3 2 .11

12/5/2018 25
Activity time distribution for activity A

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time estimates
Activities optimistic time (a) Most probable (m) Pessimistic time (b) Expected time
A 4 5 12 6 1.777778
B 1 1.5 5 2 0.444444
C 2 3 4 3 0.111111
D 3 4 11 5 1.777778
E 2 3 4 3 0.111111
F 1.5 2 2.5 2 0.027778
G 1.5 3 4.5 3 0.25
H 2.5 3.5 7.5 4 0.694444
I 1.5 2 2.5 2 0.027778
J 1 2 3 2 0.111111


12/5/2018 27
Based on the expected time calculated for each activity and the project diagram
constructed for the same project, answer the following questions:
1. How long will the project take to complete?

2. What are the scheduled start and completion times for each activity?
3. Which activities are critical and must be completed exactly as scheduled to keep
the project on schedule?
4. How long can noncritical activities be delayed before they cause an increase in the
5. IF THE PROJECT DEADLINE IS 20 WEEKS, WHAT IS THE PROBABILITY
THAT IT WILL BE COMLETED WITHIN THE DEADLINE?

12/5/2018 28
6 C 9 9 F 11
4 4
10 3 13 13 2 15
0 A 6
6 D 11 11 G 14 15 J 17
0
1 1 0
0 6 6
7 5 12 12 3 15 15 2 17
FINISH
6 E 9 9 H 13
13 I 15
START 0 0
0
6 3 9 9 4 13
13 2 15
0 B 2
7
7 2 9

12/5/2018 29
Activities with zero floating time make-up the critical path
6 C 9 9 F 11
4 4
10 3 13 13 2 15
0 A 6
6 D 11 11 G 14 15 J 17
0
1 1 0
0 6 6
7 5 12 12 3 15 15 2 17
FINISH
6 E 9 9 H 13
13 I 15
START 0 0
0
6 3 9 9 4 13
13 2 15
0 B 2
7
7 2 9

12/5/2018 30
A-E-H-I-J
IDENTIFICATION PREDECESSOR T ES EF LS LF SLACK

NUMBER TIME
A - 6 0 6 0 6 0
B - 2 0 2 7 9 7
C A 3 6 9 10 13 4
D A 5 6 11 7 12 1
E A 3 6 9 6 9 0
F C 2 9 11 13 15 4
G D 3 11 14 12 15 1
H B,E 4 9 13 9 13 0
I H 2 13 15 13 15 0
J F,G,I 2 15 17 15 17 0

12/5/2018 31
Based on the expected time calculated for each activity and the project diagram
constructed for the same project, answer the following questions:
1. How long will the project take to complete?

2. What are the scheduled start and completion times for each activity?
3. Which activities are critical and must be completed exactly as scheduled to keep
the project on schedule?
4. How long can noncritical activities be delayed before they cause an increase in the
5. IF THE PROJECT DEADLINE IS 20 WEEKS, WHAT IS THE PROBABILITY
THAT IT WILL BE COMLETED WITHIN THE DEADLINE?

12/5/2018 32
Variation in project completion time
• To address the last of the above questions, we need to consider variation in

completion time
• Variation in critical activities can cause variation in the project completion time.
Variability in critical activity may lead to a “longer-than –expected” time or to
“shorter-than-expected” time. In the former case we expect that the project
completion time will extend whereas in the latter case it will reduce.
• Variation in noncritical activities has no effect on the project completion time until
such time that variation in any noncritical activity exceeds the slack time associated
with it
• We need to determine the expected time and variance for the project completion
time ,

12/5/2018 33
12/5/2018 34
What is the completion time in weeks if we are ready to accept a 90% likelihood of
completing the project?
check that P(0<z <1.28) = 39.97%
i.e., z – 1.28
In Z = [(X-17)/1.65], X is unknown
1.28 = [(X-17)/1.65],
[1.28x1.65] + 17 = X = 19.112 weeks

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Check that Prob (T <=20 weeks) = 50% + 46.56% = 96.56%

12/5/2018 36
Market survey research project
BETA (1:4:1)/6
A [contract signing] - 5
B [questionnaire design] A 5
C [target market Identification] A 6
D [survey sample] B,C 12.7
E [develop presentation] B 5.8
F [analyze results] D 4.2
G [demographic analysis] C 9.3
H [presentation to client] E,F,G 2.2

12/5/2018 37
5 B 10 10 E 15.8
11.1 Develop
1 QUESTIONNAIRE presentation
DESIGN
21.1 5.8 26.9
6 5 11
26.9 H 29.1
0 A 5 11 D 22.7 22.7 F 26.9
0 Presentation
START 0 CONTRACT 0 Survey sample 0 Analyze to client FINISH
SIGNING results
11 12.7 22.7 26.9 2.2 29.1
0 5 5 22.7 4.2 26.9
5 C 11
0 Target
market ID
5 6 11
11 G 20.3
6.6 Demographi
c analysis
17.6 9.3 26.9

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Study the following concepts from your
book:
Laddering activities
Hammock activities

12/5/2018 39
Options for reducing the critical path
1. Eliminate tasks on the critical path

2. Re-plan serial paths to be in parallel
3. Overlap sequential tasks (laddering or starting working on following activities
without waiting for some of the tasks on the precedent activities to be completed)
4. Shorten the duration of critical path tasks
5. Shorten early tasks
6. Shorten longest tasks
7. Shorten easiest tasks
8. Shorten tasks that cost the least to speed up

12/5/2018 40
The decision to reduce completion time has to take added costs into consideration. That
is, some of the costs which we have estimated under the normal time may change
when we add additional costs for speeding up, for example use of overtime
Crashing: shortening of activity times, usually by adding resources .
A - 7
B A 3
C - 6
D C 3
E B,D 2

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7 B 10
0 A 7
0
0
10 E 12
7 3 10
0 7 7
0
FINISH
START 10 2 12
6 D 9
0 C 6
1
1
7 3 10
1 6 7

12/5/2018 42
TIME - COST RELATIONSHIOP FOR ACTIVITY A

12/5/2018 43
Time (days) Total cost Maximum Crash cost
reduction per day
in time
activity Normal Crash Normal (NC) Crash (CC) t K = [ (CC-NC)/t]
$ $
$
A 7 4 500 800 3 100
B 3 2 200 350 1 150
C 6 4 500 900 2 200
D 3 1 200 500 2 150
E 2 1 300 550 1 250

12/5/2018 44
end

12/5/2018 45

Project Management

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Project Management

Tilahun Teklu (Dr.) lecture for

activities must occur

Recall also from previous lecture

Tilahun Teklu (Dr.) lecture for

Following the project initiating /conceptualization phase and before implementation

The project planning phase

beginning of the project to its completion

Tilahun Teklu (Dr.) lecture for

Careful project planning is solidly associated

Tilahun Teklu (Dr.) lecture for

Tilahun Teklu (Dr.) lecture for

Generic elements of a project plan (the actual contents vary from

1. Overview – a short summary of the objectives and scope of the project

Objectives or scope (indicated as element of a project plan)

The hierarchical planning system for constructing project action

Break down the work (level 0) into major activities (level 1

Each activity has an outcome (event) associated with it, and

Option A: serial sequential logic

Tilahun Teklu (Dr.) lecture for

PERT: Project evaluation and review technique

Tilahun Teklu (Dr.) lecture for

List of activities for WH shopping center

Late start Activity Late Finish

Tilahun Teklu (Dr.) lecture for

ES: earliest start time for an activity

Tilahun Teklu (Dr.) lecture for

Find activity floating time

calculate for each activity its slack time

Tilahun Teklu (Dr.) lecture for

• How long will the project take to complete?

Tilahun Teklu (Dr.) lecture for

Tilahun Teklu (Dr.) lecture for

Tilahun Teklu (Dr.) lecture for

Tilahun Teklu (Dr.) lecture for

Tilahun Teklu (Dr.) lecture for

Under such conditions, three time estimates are forecasted:

Tilahun Teklu (Dr.) lecture for

A Develop product 4 5 12 6 1.78

C Prepare routing 2 3 4 3 .11

Tilahun Teklu (Dr.) lecture for

Tilahun Teklu (Dr.) lecture for

Tilahun Teklu (Dr.) lecture for

1. How long will the project take to complete?

Tilahun Teklu (Dr.) lecture for

Tilahun Teklu (Dr.) lecture for

Tilahun Teklu (Dr.) lecture for

IDENTIFICATION PREDECESSOR T ES EF LS LF SLACK

Tilahun Teklu (Dr.) lecture for

1. How long will the project take to complete?

Tilahun Teklu (Dr.) lecture for

• To address the last of the above questions, we need to consider variation in

Tilahun Teklu (Dr.) lecture for

check that P(0<z <1.28) = 39.97%

Tilahun Teklu (Dr.) lecture for

Tilahun Teklu (Dr.) lecture for

C [target market Identification] A 6

D [survey sample] B,C 12.7

E [develop presentation] B 5.8

F [analyze results] D 4.2

G [demographic analysis] C 9.3

H [presentation to client] E,F,G 2.2

Tilahun Teklu (Dr.) lecture for