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What is a Project Management?
• Project: a series of related activities usually directed toward some major output and requiring a significant period of time to perform • Project management: the application of the knowledge, skills, tools, and techniques necessary to successfully complete a project. • According to the Project Management Institute (www.pmi.org), the body of knowledge of project management can be divided into five categories:
1. initiation 2. planning 3. execution 4. control 5. closure
Characteristics of a Project
• A unique, one-time effort • Requires the completion of a large number of interrelated activities • Resources, such as time and/or money, are limited • Typically has its own management structure
An element of risk Teams made up of several individuals who come from different departments or functional areas or who have unique skills • Team members work on multiple projects at the same time .Characteristics for Projects Projects generally have or include: • • • • • Pre-specified deliverables after completion Pre-established limits and exclusions Specific intermediate goals or performance milestones.
Example Projects in Different Functional Areas that Impact the Value Chain .
Matrix Project .
resources. and cost .Three Interrelated Constraints in Project Management All project management decisions involve three factors: time.
Project Management Tools and Techniques • The discipline of project management has a number of tools and procedures that enable the project team to organize its work to meet the objectives under the constraints: – – – – – – – – Work Breakdown Structure Precedence Relationship and Time Estimates Gantt Chart Network Diagram Critical Path Method (CPM) Cost and Time Tradeoff Analysis Program Evaluation and Review Technique (PERT) Resource Management .
tasks.Work Breakdown Structure • Work breakdown structure (WBS): an approach that defines a project in terms of its subprojects. . and activities – Most fundamental technique for designing and organizing • Activity: the smallest work package that can be assigned to a single worker or a team • It is essential that care is taken to develop a realistic work breakdown structure.
. • The project schedule. and resource requirements depend on the precedence relationships and time estimates for individual tasks. cost.Precedence Relationship and Time Estimates • Precedence relationship analysis: identification of the relationships and the sequence of activities within a project • Great care is taken to estimate the approximate completion time for each activity.
. who originally developed the chart in the 1910s.Gantt Chart • Gantt chart: a special type of horizontal bar chart used to display the schedule for an entire project • Named after Henry Gantt. • A Gantt chart with different color codes can be used to track performance while the project is in progress.
An Example of a Gantt Chart .
and the nodes are used to show the beginning and end points .Network Diagram • Network diagram: a diagram with arrows and nodes (circles) created to display a sequence of activities within a project • Activity on node (AON) approach: a network diagram that shows each activity as a circle (or a node) and connects the activities with arrows • Activity on arrow (AOA) convention: a network diagram in which each activity is represented by an arrow.
Activity on Node (AON) and Activity on Arrow (AOA) Conventions for Representing Network Diagrams .
Used when activity times are known with certainty – Used to determine timing estimates for the project.Types of Critical Path Methods • CPM . and slack time for activities • PERT with Three Activity Time Estimates – Used when activity times are uncertain – Used to obtain the same information as the Single Time Estimate model and probability information • Time-Cost Models – Used when cost trade-off information is a major consideration in planning – Used to determine the least cost in reducing total project time . each activity in the project.
the bottleneck path or the binding constraint • Critical activities: the project activities making up a critical path • Slack: the amount of flexibility in scheduling an activity within a project .Critical Path Method • Critical path method: an algorithm for scheduling activities within a project for the fastest and most efficient execution • Critical path: the path within a project that takes the longest time to complete – Dictates the project completion time.
Computing the Critical Path • Earliest start (ES) = 0 for all activities without predecessors. = smallest of latest start times for all successor activities. working backwards in the project network . • Earliest finish (EF) = ES + task duration. = largest of earliest finish times of all immediate predecessor activities. • Latest start (LS) = LF .task duration. working forward in the project network • Latest finish (LF) = for all ending activities = minimum project duration.
Pred. Time (Weeks) A None 2 B A 1 C B 1 D C 2 E C 5 F D. .CPM with Single Time Estimate Consider the following consulting project: Activity Assess customer's needs Write and submit proposal Obtain approval Develop service vision and goals Train employees Quality improvement pilot groups Write assessment report Designation Immed. E 5 G F 1 Develop a critical path diagram and determine the duration of the critical path and slack times for all activities.
First draw the network Act.E F 5 1 D(2) A(2) B(1) C(1) F(5) G(1) E(5) . Time None A B C C 2 1 1 2 5 F G D. A B C D E Imed. Pred.
Determine early starts and early finish times ES=4 EF=6 ES=0 EF=2 A(2) ES=2 EF=3 B(1) ES=3 EF=4 C(1) ES=4 EF=9 Hint: Start with ES=0 and go forward in the network from A to G. D(2) ES=9 EF=14 F(5) ES=14 EF=15 G(1) E(5) .
Determine late starts and late finish times ES=4 EF=6 D(2) LS=7 LF=9 ES=4 EF=9 E(5) LS=4 LF=9 ES=0 EF=2 A(2) LS=0 LF=2 ES=2 EF=3 B(1) LS=2 LF=3 ES=3 EF=4 C(1) LS=3 LF=4 Hint: Start with LF=15 or the total time of the project and go backward in the network from G to A. ES=9 ES=14 EF=14 EF=15 F(5) LS=9 LF=14 G(1) LS=14 LF=15 .
Critical Path & Slack ES=4 EF=6 Slack=(7-4)=(9-6)= 3 Wks ES=0 EF=2 A(2) LS=0 LF=2 ES=2 EF=3 B(1) LS=2 LF=3 ES=3 EF=4 C(1) LS=3 LF=4 D(2) LS=7 LF=9 ES=4 EF=9 E(5) LS=4 LF=9 ES=9 EF=14 F(5) LS=9 LF=14 ES=14 EF=15 G(1) LS=14 LF=15 Duration=15 weeks .
. • The probabilistic information about the activities is translated into probabilistic information about the project.Program Evaluation and Review Technique (PERT) • The technique is based on the assumption that an activity’s duration follows a probability distribution instead of being a single value.
the consensus best estimate of the activity’s duration – optimistic time (to ) .the time the activity would take if things do not go well – most likely time (tm ) .the time the activity would take if things do go well .PERT • Three time estimates are required to compute the parameters of an activity’s duration distribution: – pessimistic time (tp ) .
te = ( to + 4tm + tp ) / 6 Vt = [ ( tp .to ) / 6 ] 2 .PERT • From these three time estimates about an activity. two probability distribution parameters are calculated: the mean (te ) and the variance (Vt ).
F 1 4 7 I G.H 4 19 28 .Example: PERT 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.
Time 6 . Time + 4(M ost Likely Time) + Pess. Expected Time Calculations ET(A)= 3+4(6)+15 Task A B C D E F G H I Immediate Expected Predecesors Time None 7 None 5.F 1 4 7 I G.H 18 6 ET(A)=42/6=7 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.333 A 14 A 5 C 11 D 7 B 11 E.H 4 19 28 Expected Time = Opt.Example.F 4 G.
333) G(11) .Network Diagram Duration = 54 Days C(14) A(7) E(11) H(4) D(5) F(7) I(18) B (5.
TE t 2 cp .Exercise What is the probability of finishing this project in less than 53 days? p(t < D) D=53 TE = 54 Z = D .
A ctiv ity v arian ce. .) 2 = 41 . 2 P essim . 2 = ( ) 6 Task A B C D E F G H I Optimistic Most Likely Pessimistic Variance 3 6 15 4 2 4 14 6 12 30 16 2 5 8 5 11 17 4 3 6 15 3 9 27 1 4 7 1 4 19 28 16 (Sum the variance along the critical path.O p tim .
TE cp 2 53 .54 = = -.156) = . or 43.156 41 p(Z < -.438.8% probability that this project will be completed in less than 53 weeks.p(t < D) t D=53 TE = 54 Z = D .8 % (NORMSDIST(-. .156) There is a 43.
Additional Probability Exercise • What is the probability that the project duration will exceed 56 weeks? .
TE cp 2 56 . or 37.54 = = .312 41 p(Z > .312) = .Additional Exercise Solution p(t < D) t TE = 54 D=56 Z = D .378.8 % (1-NORMSDIST(.312)) .
• This is accomplished by reducing the length of the critical path(s). or accelerate the completion of the project.Activity Cost-Time Tradeoffs • Project managers may have the option or requirement to crash the project. • The length of the critical path is reduced by reducing the duration of the activities on the critical path .
• Crash time is the shortest possible time the activity can realistically be completed. • Crash cost is the total additional cost associated with completing an activity in its crash time rather than in normal time. Crash cost per unit of time = Crash Cost – Normal Cost Normal Time – Crash Time .Chapter 18 Project Management • Crashing a project refers to reducing the total time to complete the project to meet a revised due date.
Activity crashing Crash cost Crashing activity Slope = crash cost per unit time Normal Activity Normal cost Normal time Crash time Activity time .
Considerations Pick activities on the Critical Path Determine Crash/Day costs Start with lowest cost crash/day Determine other effects of shortening critical path activities • Continue to crash/analyze until optimum solution reached.Crashing . • Analyze Project Cost/Duration Graph • • • • .
) Oracle Projects (Oracle Corp.Computer Software for Project Management • • • • • • • • Artemis Views (Artemis Management Systems) FastTrack Schedule (AEC Software) Microsoft Project (Microsoft Corp.) PowerProject (ASTA Development) Primavera Project Planner (Primavera Systems) SuperProject (Computer Associates International) TurboProject (IMSI) .
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