INSE 6230: Total Quality Project Management

Lecture #7 Project Time Management 3 Project Cost Management

Nov. 5, 2012
Instructor: Dr. Zhigang (Will) Tian CIISE, Faculty of Engineering and Computer Science Concordia University

Presenting the Scheduling Results

Gant Chart
Lists activities and shows their scheduled start, finish and duration. Monitoring a project: indicate the current state of each activity.

Percentage Completion versus Time

Early start schedule: - each activity was scheduled at its earliest start time, ES(i,j) Late start schedule: - based on latest possible start times for each activity, LS(i,j)

Actual Percentage Completion versus Time

CPM with Complex Precedence Relationship

Complex precedence relationship

There are 4 precedence relationships between predecessor activity (A) and successor activity (B), which provide flexibility for modeling different real situations. Finish-to-Start (FS): (Finish of predecessor A to Start of successor B) - B can NOT start until A finishes. - The most common precedence relationship. Start-to-Start (SS): - B can NOT start until A starts.

Finish-to-Finish (FF): - B can NOT finish until A finishes.

Start-to-Finish (SF): - B can NOT finish until A starts.

Lags, Leads and Windows

For each of the 4 precedence relationships between predecessor activity (A) and successor activity (B), a lag time (or lead time) can be specified.

Lag time: - A delay between the predecessor event (start or finish) and the successor event (start or finish). - Example: A Finish-to-Start relationship between A and B with a 2 days lag, means B can not start until A has finished for 2 days In this example, FS = 2 days.
Lead time: - The successor event (start or finish) can occur before the predecessor event (start or finish) within a certain time frame. - Example: A Finish-to-Start relationship between A and B with a 2 days lead, means B can not start until it is 2 days before A finishes In this example, FS = - 2 days.

Window: - A certain time window for an activity to be performed.

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Microsoft Project

Project Time Management: Advanced Topics

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Scheduling with Uncertain Durations

In previous discussions, it is assumed that activity

durations are fixed and known.

However, there may be a significant amount of

uncertainty associated with the actual durations: Examples:

external events such as adverse weather the time required to gain regulatory approval for projects
may vary tremendously

Two simple methods for dealing with uncertainty

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Simple method 1 Ignoring the uncertainty, and schedule the project using the expected or most likely duration for each activity.

Drawbacks:

Typically results in overly optimistic schedules the use of single activity durations often produces a rigid,
inflexible mindset on the part of schedulers. As a result, field managers may loose confidence in the realism of a schedule based upon fixed activity durations.

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Simple method 2 Include a contingency allowance in the estimate of activity durations.

For example, an activity with an expected duration of two

days might be scheduled for a period of 2.2 days, including a 10% contingency.

Systematic use of contingency factors can result in more

accurate schedules

However, formal scheduling methods that incorporate

uncertainty more formally are useful as a means of obtaining greater accuracy

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PERT (Project Evaluation and Review Technique)

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PERT (Project Evaluation and Review Technique) PERT is a commonly used formal method for dealing with uncertainty in project scheduling.

Apply the critical path scheduling process and then

analyze the results from a probabilistic perspective.

Procedure:

Using expected activity durations and critical path

scheduling, a critical path of activities can be identified

This critical path is then used to analyze the duration of

the project incorporating the uncertainty of the activity durations along the critical path.
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PERT: Project duration measures

The expected project duration:

The expected project duration is equal to the sum of the

expected durations of the activities along the critical path.

The variance in the duration of this critical path:

the variance or variation in the duration of this critical path is

calculated as the sum of the variances along the critical path.

Assuming that activity durations are independent random

variables

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The mean and variance for each activity duration

The mean and variance for each activity duration are typically computed from the following three estimates (using AOA representation as an example):

"optimistic" (ai,j) "most likely" (mi,j),

"pessimistic" (bi,j)
Mean:

Variance:

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Example 6.1: A software development project

(Source: Nahmias, Production and operations analysis, McGraw-Hill, 2005)

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Example 6.1: CPM result

The critical path: A C E G - I

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Example 6.1: PERT

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Example 6.2: Answer the following questions

Answer the following questions about the project scheduling problem described in Example 6.1.

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Example 6.2
1. The probability that the project can be completed within 22 weeks:

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Example 6.2
2. The probability that the project requires more than 28 weeks:

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Example 6.2
3. The number of weeks required to complete the project with probability 0.90:

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Use of 95 percentile

Absolute limits on the optimistic and pessimistic activity

durations are difficult to estimate from historical data

A common practice is to use the ninety-fifth percentile of activity

durations for these points.

The optimistic time would be such that there is only 5% chance

that the actual duration would be less than the estimated optimistic time.

The calculation of the expected duration is the same.

Variance:

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Example 6.3: 95 percentile variance estimation

Project: nine-activity construction project Critical path: A C- F - I

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Example 6.3
Activity durations estimation

The sum of the means for the critical activities is 4.0 + 8.0 + 12.0 + 6.0 = 30.0 days, and the sum of the variances is 0.4 + 1.6 + 1.6 + 1.6 = 5.2 leading to a standard deviation of 2.3 days.
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Problems with using PERT method

1. The procedure focuses upon a single critical path, when

many paths might become critical due to random fluctuations.

As a result of the focus on only a single path, the PERT method

typically underestimates the actual project duration.

2. Assume that most construction activity durations are

independent random variables.

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Monte Carlo simulation

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Monte Carlo simulation

Objective: obtain information about the distribution of project completion time (as well as other schedule information)

Input: Duration distribution of each activity; Network diagram.

Procedure:

1. In each iteration, generate a set of activity durations, based on their corresponding duration distributions.
2. Use CPM to compute the project completion time and other scheduling information. 3. Repeat 1 and 2 until the maximum iteration N is reached. Thus, N project completion times can be obtained. 4. Determine the project completion time distribution based on the data obtained in 3.
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Monte Carlo simulation

A number of different indicators of the project schedule can be estimated from the results of a Monte Carlo simulation:

Estimates of the expected time and variance of the project completion. An estimate of the distribution of completion times, so that the probability
of meeting a particular completion date can be estimated.

The probability that a particular activity will lie on the critical path. This is
of interest since the longest or critical path through the network may change as activity durations change.

Monte Carlo simulation is more accurate than PERT Dependency among duration distributions of activities can be modeled.

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Example 6.4: A Three-Activity Project Example

A simple project involving three activities in series.

The actual project duration has a mean of 10.5 days, and a standard deviation of 3.5 days.

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Example 6.5

Nine-activity project:

Run the simulation 500 times. The average project duration is found to be 30.9 days with a
standard deviation of 2.5 days.

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