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QA Lecture 09 Project Management
QA Lecture 09 Project Management
Project Management
ISE Dept.-IU
Office: Room O2 602
Chapter Outline
13.1 Introduction
13.2 Project Scheduling: PERT/CPM
Work Breakdown Structure (WBS)
Gantt Chart
PERT/CPM Terminology
PERT/CPM Procedure
Drawing PERT/CPM Network
Example (General Foundry)
Activity Times
How to Find Critical Path
Probability of Project Completion
13.3 Project Monitoring and Controlling: PERT/Cost
Budgeting
Controlling
Appendix: Normal Distribution Table
Introduction
• Project: a combination of
• Resources
• Money
• Manpower etc.
to finish a set of pre-determined tasks in a specified
time.
• Project Management: set of principles and tools for
• Defining
• Planning
• Executing
• Controlling
• Completing a PROJECT
Introduction
Why Project Management?
• Organize your approach
• Generate a credible schedule
• Track progress and control your project
• Identify where to focus your efforts
• Identify problems early – before they are crises
• Saves your TIME….MONEY
Introduction
• The first step in planning and scheduling a project is to develop the
work breakdown structure
– Time, cost, resource requirements, predecessors, and people required are
identified for each activity
• Then a schedule for the project can be developed:
– the program evaluation and review technique (PERT)
PERT and
– the critical path method (CPM)
CPM
to help plan, schedule, monitor, and control projects
• PERT used three time estimates to develop a probabilistic estimate
of completion time
• CPM was a more deterministic technique
• They have become so similar they are commonly considered one
technique, PERT/CPM
Historical Evolution
Gantt Chart
• Henry Laurence Gantt, (1861 - 1919): a mechanical engineer and
management consultant, developed the Gantt chart in the 1910s.
• Gantt charts were employed on major infrastructure projects including
the Hoover Dam and Interstate highway system
Historical Evolution
CPM and PERT
Critical Path Method (CPM,1957) was developed jointly by
representatives of Du Pont and Remington-Rand.
Program Evaluation and Review Technique (PERT,1958) was
developed jointly by representatives of the United States Navy
and the management consulting firm of Booze, Allen, and
Hamilton.
The USS George Washington.
Ballistic Missile Project included more than:
250 prime contractors
9,000 subcontractors.
70,000 different activities
PERT bringing the Polaris missile submarine to combat readiness approximately two
years ahead of the originally scheduled completion date
Work Breakdown Structure
• 1. Project
• 2. Major tasks in the project
• 3. Subtasks in the major tasks
• 4. Activities (or work packages) to be
completed
Gantt Charts
• Time on horizontal axis,
• Activities on vertical axis. Each bar per activity
• Length of bar = required activity time
• Left end of bar at Earliest Start Time
Activity
Activity 1
Activity 2
Milestone
• Dummy Activity
– Indicates only precedence relationships
– Does not require any time of effort
• Event
– Signals the beginning or ending of an activity
– Designates a point in time
• Network
– Shows the sequential relationships among activities using nodes and arrows
• Path
– A connected sequence of activities leading from the starting event to the ending event
• Critical Path
– The longest path (time); determines the project duration
• Critical Activities
– All of the activities that make up the critical path
Terminology
For an activity, there are 4 types of quantities must be considered
Begin at starting event and work forward
• Earliest Start Time (ES)
– The earliest that an activity can begin; assumes all preceding activities have
been completed
– ES = 0 for starting activities
– ES = Maximum EF of all predecessors for non-starting activities
• Earliest Finish Time (EF)
– EF = ES + activity time
Begin at ending event and work backward
• Latest Finish Time (LF)
– The latest that an activity can finish and not change the project completion
time
– LF = Maximum EF for ending activities
– LF = Minimum LS of all successors for non-ending activities
• Latest Start Time (LS)
– LS = LF - activity time
PERT/CPM Procedure
Six Steps
1. Define the project and all of its significant activities or tasks
2. Develop the relationships among the activities and decide which
activities must precede others
3. Draw the network connecting all of the activities
4. Assign time and/or cost estimates to each activity
5. Compute the longest time path through the network; this is called the
critical path
6. Use the network to help plan, schedule, monitor, and control the project
• Activity-on-node (AON)
AON where the nodes represent
activities
– One node represents the start of the project, one node
for the end of the project, and nodes for each of the
activities
– The arcs are used to show the predecessors for each
activity
• Activity-on-arc (AOA)
AOA where the arcs are used to represent
the activities
Drawing the PERT/CPM Network
S S and T must be
U completed before U
can be started.
T
Drawing the PERT/CPM Network
T
T and U cannot
S begin until S has
U been completed.
2
To compute the dispersion or ba
variance of activity completion Variance
time:
time
6
Activity Times
• Time estimates (weeks) for General Foundry
1 A 2w
2 B 3w
3 C 2w
4 D 4w
5 E 4w
6 F 3w
7 G 5w
8 H 2w
Find the Critical Path
• General Foundry’s network with expected activity times
ACTIVITY t
ACTIVITY IMMEDIATE
PREDECESSOR
EXPECT
ED TIME
ES EF
A — 2 LS LF
B — 3
A C F
C A 2 2 2 3
D B 4
E H
E C 4 Start Finish
4 2
F C 3
G D, E 5 B D G
3 4 5
H F, G 2
ES and EF Times ACTIVITY t
ES EF
Early Finish Time = Early Start Time + Activity Time LS LF
A 2 C 2
0 2 4
E 4
Starting 4 8
Activity
3 7 13
ACTIVITY t LS and LF Times
ES EF
LS LF Late Start Time = Late Finish Time - Activity Time
C 2 F 3
2 4 4 7
2 4 10 13
LF(C)=Min[LS(E), LS(F)]
E 4 H 2
4 8 13 15 Finish
4 8 13
G 5
8 13
8 13
How to Find the Critical Path
(General Foundry’s example)
Early Finish Time = Early Start Time + Activity Time ACTIVITY t
• At the start of the project we set the time to zero ES EF
• Thus ES = 0 for both A and B LS LF
A 2 C 2 F 3
0 2 2 4 4 7
E 4 H 2
Start 4 8 13 15 Finish
B 3 D 4 G 5
0 3 3 7 8 13
Project’s EF = 15
=> LF =
How to Find the Critical Path
(General Foundry’s example)
ACTIVITY t LS and LF Times
ES EF
Late Start Time = Late Finish Time - Activity Time
LS LF
A 2 C 2 F 3
0 2 2 4 4 7
0 2 2 4 10 13
E 4 H 2
Start 4 8 13 15 Finish
4 8 13 15
B 3 D 4 G 5
0 3 3 7 8 13
1 4 4 8 8 13
How to Find the Critical Path
• Slack time that each activity:
Slack = LS – ES, or Slack = LF – EF
Activities with no slack time are called critical activities and they are said to be on the
critical path
A 2 C 2 F 3
0 2 2 4 4 7
0 2 2 4 10 13
E 4 H 2
Start 4 8 13 15 Finish
4 8 13 15
B 3 D 4 G 5
0 3 3 7 8 13
1 4 4 8 8 13
Probability of Project Completion
The critical path analysis determine the expected project
completion time of 15 weeks
B 10 10 10 30
C 13 13 26
D 12 12 12 12 48
E 14 14 14 14 56
F 10 10 10 30
G 16 16 16 16 16 80
H 8 8 16
308
Total to date 21 42 65 90 126 162 198 212 228 244 260 276 292 300 308
Budgeting for General Foundry
B 10 10 10 30
C 13 13 26
D 12 12 12 12 48
E 14 14 14 14 56
F 10 10 10 30
G 16 16 16 16 16 80
H 8 8 16
308
Total to date 11 32 55 78 104 130 156 182 198 214 240 266 292 300 308
Using PERT/COST approach, we are easily to control
project implementation in terms of time and cost.
VALUE OF
TOTAL WORK
BUDGETED PERCENT OF COMPLETED
ACTIVITY COST ($) COMPLETION ($) Questions:
A 22,000 100 22,000 1. Project is on schedule?
B 30,000 100 30,000 2. What is value of work
C 26,000 100 26,000 completed?
D 48,000 10 4,800 3. Are there any cost
E 56,000 20 11,200 overrun?
F 30,000 20 6,000
G 80,000 0 0
H 16,000 0 0
Using these formula:
• Value of Work Completed = % of Work completed x activity budget
• Difference = Actual Cost – Value of Work completed
• If Difference > 0 Activity/Project is overrun
• If Difference < 0 Activity/Project is under control
VALUE OF
TOTAL WORK ACTIVITY
BUDGETED PERCENT OF COMPLETED ACTUAL DIFFERENCE
ACTIVITY COST ($) COMPLETION ($) COST ($) ($)
A 22,000 100 22,000 20,000 –2,000
B 30,000 100 30,000 36,000 6,000
C 26,000 100 26,000 26,000 0
D 48,000 10 4,800 6,000 1,200
E 56,000 20 11,200 20,000 8,800
F 30,000 20 6,000 4,000 –2,000
G 80,000 0 0 0 0
H 16,000 0 0 0 0
Total 100,000 112,000 12,000
Overrun
Project Crashing
• Projects will sometimes have deadlines that are
impossible to meet using normal procedures
• By using exceptional methods it may be possible to
finish the project in less time than normally required
• However, this usually increases the cost of the
project
• Reducing a project’s completion time is called
crashing
Project Crashing
• Crashing a project starts with using the normal time to create
the critical path
• The normal cost is the cost for completing the activity using
normal procedures
• If the project will not meet the required deadline,
extraordinary measures must be taken
• The crash time is the shortest possible activity time and will
require additional resources
• The crash cost is the price of completing the activity in the
earlier-than-normal time
Four Steps to Project Crashing
1. Find the normal critical path and identify the
critical activities
2. Compute the crash cost per week (or other time
period) for all activities in the network using the
formula
A 2 C 2 F 3
Start E 4 H 2 Finish
B 3 D 4 G 5
Figure 13.12
Project Crashing with
Linear Programming
• The decision variables for the problem are
XA = EF for activity A
XB = EF for activity B
XC = EF for activity C
XD = EF for activity D
XE = EF for activity E
XF = EF for activity F
XG = EF for activity G
XH = EF for activity H
Xstart = start time for project (usually 0)
Xfinish = earliest finish time for the project
Project Crashing with
Linear Programming
• The decision variables for the problem are
Y =the number of weeks that each activity
is crashed
YA =the number of weeks activity A is
crashed and so forth