Project Management

PROJECT MANAGEMENT
OVERVIEW
WHY PROJECTS
Projects are a means to accomplish
Individual or family objectives
Organizational objectives
National or global objectives
Project Identification begins in response to
the specific need or the objectives
PROJECT CHARACTERISTICS
COMPLEX:
Many inter-related activities,
Involving many people

Crossing functional boundaries
TEMPORARY BY NATURE
Have a finite life cycle with characteristic phases
UNIQUE: different objectives, tasks, people, schedules, problems
etc.
DYNAMIC:
Changes during different phase of the project life cycle
Changes requested by clients, management, technology
development etc.
Changes in working environment
HIGH PRESSURES AND HIGH RISKS
WHAT IS A PROJECT?
Two defining features:

- A unique output
-A limited time frame
Formal definition: A project is a complex effort, made up of

interrelated tasks, to be completed within a limited time frame
and budget, with a well-defined set of objectives
Types of projects that could be considered :

- Industrial projects
- Infrastructure projects
- Organizational and development projects
Project versus Program

What is a project?
Temporary and unique
Definite beginning and end
Unique purpose
Require resources, often from various areas involve
uncertainty
Note: temporary does not mean short in duration
What is a program?
A group of projects managed in a coordinated way to obtain
benefits not available to managing them individually
Long Term for: a collection of projects
Same Techniques Work for Projects, Products, & Programs!
Use them where they work!
Triple Constraints Theory

Every project is constrained in
different ways by its
Scope goals: What is the
project trying to accomplish?
Time goals: How long should
it take to complete?
Cost goals: What should it
cost?
It is the project managers duty
to balance these three often
competing goals
PERSONAL PROJECTS
Preparing for an examination

Writing a book
Getting dressed
Wedding in the house
A birthday function
A family vacation
VARIETY OF PROJECTS
Projects at personal level

Projects in local neighbourhood
Organizational projects
National projects
Global projects
PROJECTS IN LOCAL NEIGHBOURHOOD
A school function
Cleanliness drive
Construction of clubs
Tree plantation exercise
Establishment of a park
Welcoming a dignitary to the colony
NATIONAL PROJECTS
ORGANISATIONAL PROJECTS
Construction of building, highway

Planning & launching a new product
A turnaround in a refinery
A training for managers in the organization
Conducting a marketing survey
Completing a financial audit
Disposal of dead stock
Launching a new satellite

Literacy campaign
Poverty removal drive
Organizing general elections
Preparation of annual budget
Project Management Framework
GLOBAL PROJECTS
Organizing peace missions (UN)
Space exploration
Conducting World Trade
Environment protection
Project Lifecycle
Definition
/Concept
Project Phases
Projects are divided up into phases, collectively project phases

are known as the project lifecycle
Planning
Execution
/Development /Implementation
Delivery
/Close-out
The Phases often overlap!!!
Project phases are marked by completion of one or more

deliverables
Deliverable is a tangible, verifiable work product
Questions at the end of each phase (known as phase exits, kill

points, or stage gates)
Level
of
Effort
Determine if the project should continue

Detect and correct errors cost effectively
Deliverables from the preceding phase are usually approved

before work exceeds 20% of the next phases budget
i.e. Overlapping work is done at cost risk to meet schedule
FAST TRACKING: projects that have overlapping phases
Phases of the Project Life Cycle

Phase
Concept/
Definition
Development/
Planning
Implementation
/ Execution
Close-Out/
Delivery
Planning
Management
Plan
Project Plan
Work Package
Completed
Work
Financial
Preliminary
Cost Estimate
Budgetary Cost
Estimate
Costs and Over

Runs
Lessons
Learned
Reporting /
Decomposition
3-level WBS
6+ level WBS
Performance
Reports
Customer
Acceptance
Deliverables
1. Goals
1. Schedules
2.Specifications 2. Budgets
3.Tasks
3. Resources
4.Responsibilities 4. Risks
5. Staffing
1. Status reports
2. Changes
3. Quality
4. Forecasts
1. Train Customer
2. Transfer Documents
3. Release Resources
4. Reassign Staff
5. Lessons Learned
LIFE CYCLE OF A PROJECT

Selection of the project
Project Planning
Scope of work & network development
Basic Scheduling
Time Cost tradeoffs
Resource Considerations in projects
Project Implementation
Project Completion and Audit
Project Stakeholders
Projectized:
Stakeholders are the people involved in or affected

by project activities
Stakeholders include
the project sponsor and project team

support staff
customers
users
Suppliers and vendors
opponents to the project
A Project as a Production System

Mass production
Batch
Production
Job
Production
Q
Quantity
to be
Made
1
Projects
P (No. of Products or VARIETY)
Knowledge base for Project

management
/ COMPETENCY
BASELINE
Team members are often co-located.

Most of the organization's resources are
involved in project work.
Project managers have a great deal of
independence and authority.
Departments either report directly to the
project manager or provide services to the
various projects.
PROJECT SUCCESS CRITERIA

Project success is assessed by:
Objective measures or performance: cost, time, meeting the
stated objectives and targets, quality and specifications of the
deliverables, etc.
Perceived satisfaction of the key stakeholders that include
client, top management and the project team
It is important for project manager to:
Identify and document the project success criteria
Getting the key stakeholders agree on the criteria
Keeping a balanced mix of managerial attention to technical
tasks and stakeholder management
It may be practical to define a range of project success (from
minimum required to realistically best case scenario)
The Immutable Laws of project

management (1)
1) No major project is installed on time, within budget, or
with the same staff that started it. Yours will not be the
first.
2) Projects progress quickly until they become 90%
complete, then they remain at 90% complete forever.
3) One advantage of fuzzy project objectives is that they
let you avoid the embarrassment of estimating the
corresponding costs.
4) When things are going well, something will go wrong.
When things just cannot get any worse, they will. When
things appear to be going better, you have overlooked
something.
The Immutable Laws of project

management (2)
5) If project content is allowed to change freely, the
rate of change will exceed the rate of progress.
6) No system is ever completely debugged.
Attempts to debug a system inevitably introduce
new bugs that are even harder to find.
7) A carelessly planned project will take three times
longer than expected; A carefully planned project
will take only twice as long.
8) Project teams detest progress reporting because
it vividly manifest their lack of progress.
The new challenges

of Project Management
Heterogeneity of projects, ranging from engineering

to social ones, calling for a wide range of knowledge
and skills
Shortened life cycle of projects, specially as result of
advance of technology and increased competition
Globalization and the growing need for international
project managers
Knowledge explosion in terms of volume, quality
and speed of dissemination
Increased customer expectation
IDEA GENERATION
Screening
PROJECT IDENTIFICATION,
SCREENING AND SELECTION
Project Appraisal
Project Selection
PROJECT IDENTIFICATION
What are the objectives?

Brainstorm to generate alternative solutions.
OBJECTIVES
STRENGTHS
THREATS
SEARCH NEW IDEAS
WEAKNESSES
OPPORTUNITIES
Emerging market trends.

SWOT analysis.
Other constraints
Shortlist candidate ideas for detailed scrutiny.
ALTERNATIVE
PROJECT POSSIBILITIES
SWOT ANALYSIS
OBJECTIVES
To increase profits
To minimize threats of losses
To become more competitive
To provide help after a disaster
To train people in a new area
To reduce pollution in Raipur
To become a successful entrepreneur
STRENGTHS
Experience and expertise

Financial position
Capital raising capability
Industrial contacts
Foreign collaborations
Easy access to market
WEAKNESSES
OPPORTUNITIES
Emerging technologies
New products with new markets
New processes with better features
Special financing schemes
Government and other incentives
Objectives
Experience
Resources
Environment pressures
Keeping these factors in mind an analysis of
strengths, weaknesses , opportunities and
threats is made to identify and select suitable
projects.
Newer unfamiliar technologies

Inability to raise huge investments
Lack of experience
Lack of trained personnel
Inability to forecast market trends
THREATS
Competitors
Poor state of the economy
Outdated technology
Unprofessional management skills
New products and services
SOURCE OF NEW PRODUCT IDEAS
Marketing and sales department

Research &Development
Top management
Production department
Consumers / Customers
Competition
SCREENING OF IDEAS
Poor Fair Good Vgood Excellent

(1) (2) (3) (4) (5) Weight
Cost
*
20%
Risk
*
30%
Return
*
40%
Hazard
*
10%
(score = 2x0.2+3x0.3+4x0.4+2x0.1= 3.1)
MORTALITY OF NEW PROJECT IDEAS

One study indicated that out of 35 new ideas
only 1 made it to the final product
No. of
Ideas
BRAINSTORMING
A good means to generate new project ideas
Focus on uninhibited participation by a group
Listing of ideas without suppressing creativity
at source
List of ideas subjected to screening and
evaluation subsequently
CRITERIA IN SCREENING PROJECTS
Investment
Rate of return
Risk
Likely profit
Payback
Similarity to existing
business
Expected life
Flexibility
Environment impact
Competition
REDUCE VEHICULAR POLLUTION IN

RAIPUR
1 Restrict registration of new vehicles
2 Enforce strict emission regulations for
vehicles
3 Ban diesel run vehicles on road
4 Introduce MRTS for the city
5 Encourage use of car pools
6 Grow more trees/ green belts in the city
Feasible Idea
REDUCE VEHICULAR POLLUTION IN

RAIPUR-II
7 Declaring no traffic zones in the city
8 Ban vehicles with an age of ten or more years
from plying on the roads
These and more ideas could be generated
through a Brainstorming exercise
SCALE OF EVALUATION
SCREENING OF IDEAS
Criteria chosen for screening:
Effectiveness to achieve objective
Cost of the proposal
Ease of implementation
Time needed
This is an illustrative list. Other criteria could
be added, if needed.
SCORING OF ALTERNATIVE PROJECTS

(Effectiveness/Cost /Implementation/Time)
v poor poor fair average good excellent

(0)
(1) (2) (3)
(4)
(5)
Low
Effectiveness
High
High
Cost
Low
Difficult
Implementation
Easy
Maximum
Time
Minimum
SCORING OF ALTERNATIVE PROJECTS

(Effectiveness/Cost/Implementation/Time)
5 Encourage use of car
pools
6 Grow more
trees/green belts in the
city
7 Declaring no traffic
zones in the city
8 Ban 10 year and older
vehicles
2 5 4 4
15
4 3 3 3
13
2 3 2 2
3 2 3 3
11
1 Restrict registration
of new vehicles
2 Enforce strict
emission regulations on
vehicles
3 Ban diesel run
vehicles on the road
4 Introduce MRTS for
the city
3 1 1 2
4 5 4 5
18
3 1 1 2
4 0 1 0
RESULTS OF SCREENING
Project No.2: Enforce strict emission
regulations on vehicles (18 points)
Project No. 5: Encourage use of car pools
(15 points)
Project No. 6: Grow more trees/green belts in
the city
(13 points)
PROJECT IDENTIFICATION
Objectives
Internal
SWOT
Brainstorming
External
Project possibilities
Criteria
Screening
Candidate project proposals
PROJECT APPRAISAL
Market appraisal
Technical appraisal
Socio economic appraisal
Ecological appraisal
Financial appraisal
MARKET APPRAISAL
(ISSUES)
MARKET APPRAISAL
What would be the aggregate
demand of the proposed product
or service?
What would be the market share
of the project under appraisal?
MARKET APPRAISAL
(ISSUES contd.)
Consumer behaviour
motivations, attitudes,
preferences,requirements
Distribution channels
marketing policies
Administrative, technical and legal constraints
Past and current demand trends

Past and current supply position
Elasticity of demand
Production possibilities and constraints
Imports and exports
Nature of competition
Cost structure
TECHNICAL APPRAISAL
Whether prerequisites for the
success of project considered?
Good choices with regard to
location, size, process, machines
etc.
TECHNICAL APPRAISAL
(ISSUES)
Preliminary tests and studies
Availability of raw materials, power and other
inputs
Optimal scale of operations
Choice of suitable production process
Choice of appropriate machines and
equipment
SOCIO-ECONOMIC APPRAISAL
Social cost -benefit analysis
Direct economic benefits and costs in terms of
shadow prices
Impact of project on distribution of income in
society
Impact on level of savings and investments in
society
ECOLOGICAL APPRAISAL
Impact of project on quality of
Air
Water
Noise
Vegetation
Human life
TECHNICAL APPRAISAL
(ISSUES Cont.)
Effluents and waste disposal

Proper layout of plant and buildings
Realistic work schedules
Socially acceptable technology
SOCIO-ECONOMIC APPRAISAL
(Continued)
Impact on fulfillment of national goals
Self sufficiency
Employment
Social order
ECOLOGICAL APPRAISAL (Continued)

Major projects , such as given below, cause
environmental damage
Power plants
Irrigation schemes
Industries like bulk drugs, chemicals and leather
processing etc.
Likely damage & the cost of restoration
10
FINANCIAL APPRAISAL
(Continued)
FINANCIAL APPRAISAL
Whether the project is financially
viable ?
Servicing debt
Meeting return expectations
FINANCIAL APPRAISAL
(Continued)
Investment worthwhile?
Net present value
Internal rate of return
Payback period
Loan returning capability

Debt service coverage ratio
Level of risk
Investment and phasing of the total cost

Means of financing
Cost of capital
Projected profitability
Breakeven point
Cash flows in the project
SUMMARY
Project selection involves consideration of
multiple, often conflicting criteria among
alternatives.
Project appraisal leads to evaluations which
may be tangible, incommensurate or
intangible.
Intangibles are evaluated on a numerical
subjective scale.
Why planning?
PROJECT PLANNING AND SCHEDULING
Insure goal achievement

Improve effective utilization of resources
Help control and monitor progress
Promote communication /co-ordination
Motivate people
Get finance for project
11
Project Planning
Describe scope and activities, output and
specifications
Estimate time, costs and other resources
Schedule project activities
Identify critical activities
Determine personnel needs and recruit project staff
Organize the project team and assign
works/responsibilities/ authorities
Plan for project monitoring and control
Write (and get approved) project document.
Negotiate and sign contracts
Deliverable output: List and schedule of activities
with description and estimates, organization
structure and responsibility assignment
Why do plans fail?
What is a Project Plan?

Common misunderstanding: Project
Schedule
Introduction or overview of the project
Description of how the project is organized
Management and technical processes used
on the project
Work to be done, schedule, and budget
information
IMPERCEPTION
Plans are based on insufficient data

Project goals, objectives and specifications
are not understood (or agreed upon) at all
levels.
Plans are done by one and executed by
another.
Plans have no provision for monitoring,
controlling and adjustment.
Plans lack specific progress indicators, or
having them wrong.
DIFFERENT
PERSONS
PERCEIVE
DIFFERENTLY
THOUGH
THEY MAY
SEE THE
SAME
THING
The basic project scheduling

Purpose:
To put the projects activities in a

timeframe:
To ensure feasible implementation
To ensure fastest completion possible
To help in controlling the implementation
Input:
The activity list (or WBS)
Activity duration estimate
Activity precedence relationship
12
WORK BREAKDOWN STRUCTURE
ALTERNATIVE WAYS TO BREAKDOWN

WORK
A breakdown of the total project task into

components to establish
How work will be done?
How people will be organized?
How resources would be allocated?
How progress would be monitored?

Project
System I
System II
Subsystem
Subsystem
Task
Subtask
System N
Subsystem
Hardware orientation (Identification of basic

work packages)
Agency orientation (Based on assignment of
responsibility to different agencies)
Function oriented (e.g Design, Procurement,
Construction and Commissioning)
Task
Subtask
Work package
Subtask
Work package

(Continued)

(Continued)
Generally a WBS includes 6-7 levels. More or

less may be needed for a situation.
All paths on a WBS do not go down to the
same level.
WBS does not show sequencing of work.
A WBS should be developed before scheduling
and resource allocation are done.
A WBS should be developed by individuals

knowledgeable about the work. This means
that levels will be developed by various groups
and the the separate parts combined.
Break down a project only to a level sufficient
to produce an estimate of the required
accuracy.
13
ILLUSTRATIVE WORK BREAKDOWN

STRUCTURE
Guidance
control sys
Ballistic
shell
Missile
Rocket
Launching
platform
Propulsion
Re entry
engine
vehicle
Housing project
Residential
Buildings
Modules
Warhead
Res. Bld
Foundation
High
School
Res. Bld
Super
Structure
Filtered
Water
Supply sys
Police
station
I Stage
Solid fuel
Sub-project and Task Level Work Breakdown
Educational
Buildings
Primary
School
K.G
Public
Buildings
Nursery
Party
Office
Sewerage
system
Social
Centre
Open theater
Duration: Length of the period of time to complete a task.

Early Start: The earliest an activity can start based on project logic.
Late Start: The latest an activity can start without delaying a project completion.
Early Finish: The earliest an activity can finish based on early start and duration.
Late Finish: Latest an activity can finish without delaying a project completion.
Shopping
complex
Rail/Air Ticket
Booking
Counter
Post
office
Gas supply
system
Service
buildings
Temple/
Mosque /
Church etc.
Swimming
pool
Air raid
shelter
The basic project scheduling
The Work Breakdown Structure
Relationships/Precedence: Dependencies that exist between activities.
Youth
centre
Road/
Pavements
etc
Electrical
System
II Stage
Activity: A task or work package performed over a period of time.
External
Services
Res bldg
Finishes
Unfiltered
Water
Supply Sys
Health
centre
WBS Terminology:
Housing Units Project
Tools:
Activity precedence diagram (PERT or CPM diagram)
CPM algorithm or scheduling software
Output
Gantt chart of activities with slacks, critical activities
and milestones
Other schedule-related plans (resource loading
charts, personnel assignments, control schedule, etc.)
Float: The amount of time an activity can be delayed without delaying the project finish date.
Total Float: The amount of time that a pathway may be delayed from it's early start without delaying
the project finish date.
Critical Path: The longest time period from start to completion of a project; also the shortest total length
of the project.
CPM and PERT: A quick historical look

Critical Path Method (CPM):
1957
Plant maintenance projects for DuPont
Emphasis on cost/time trade-off
Program Evaluation and Review Technique (PERT)

1958
US Navys Polaris Missile System Program
Emphasis on uncertain time estimates
Project scheduling: some basic concepts

Activity precedence relationship:
Finish-to-start
Others: Finish-to-finish, Start-to-finish, Start-to-start
Lags and leads in the relationship
Activity precedence diagram:

Activity and event
Activity-on-node (AON)
Activity-on-arc (AOA)
Slacks (or floats)

Critical activities
Critical paths
14
ALTERNATIVE PROJECT
REPRESENTATIONS
Task Dependency Relationships

Finish-to-Start (FS)
B cannot start till A finishes
A: Construct fence; B: Paint Fence
Start-to-Start (SS)
B cannot start till A starts
A: Pour foundation; B: Level concrete
Finish-to-Finish (FF)
Activity on Arc
(A-O-A)
Arrow diagrams
Event oriented
networks
Activity on Node
(A-O-N)
Precedence networks
Activity oriented
networks
B cannot finish till A finishes

A: Add wiring; B: Inspect electrical
Start-to-Finish (SF)
B cannot finish till A starts (rare)
Network Diagrams
AOA consists of
Circles representing Events
Such as start or end of a given task
Lines representing Tasks

Thing being done
Arrow Diagramming Method (ADM)
AON
Tasks on Nodes
Nodes can be circles or rectangles (usually latter)
Task information written on node
Arrows are dependencies between tasks

Precedence Diagramming Method (PDM)
TIME ESTIMATES
Deterministic times
A single time estimate is used for each activity.
This is taken from experts who have prior
knowledge and experience of the activity.
Probabilistic times
Three time estimates (optimistic, most likely and
pessimistic) are commonly used for each activity
based on the consensus of the group.
activity, a
ACTIVITY DURATIONS
Deterministic (as in CPM)
when previous experience yields fairly accurate
estimates of activity duration, eg construction
activity, market surveys.
Probabilistic (as in PERT)

when there is uncertainty in times, as for instance
in R&D activities, new activities being carried out
for the first time.
Critical Path
The specific set of sequential tasks upon
which the project completion date depends
or the longest full path
-(The longest time period from start to completion of
a project; also the shortest total length of the
project.)
All projects have a Critical Path

Accelerating non-critical tasks do not directly
shorten the schedule
15
CPM
ABC Hospital
Critical Path Method
Activity
The process for determining and optimizing the

critical path
Non-CP tasks can start earlier or later w/o

impacting completion date
Note: Critical Path may change to another as
you shorten the current
Should be done in conjunction with you & the
functional manager
A
B
C
D
E
F
G
H
I
J
K
ABC Hospital
Activity
A
B
C
D
E
F
G
H
I
J
K
Description
Immediate
Predecessor(s)
Select administrative and medical staff.
Select site and do site survey.
Select equipment.
A
Prepare final construction plans and layout.
B
Bring utilities to the site.
B
Interview applicants and fill positions in
A
nursing, support staff, maintenance,
and security.
Purchase and take delivery of equipment.
C
Construct the hospital.
D
Develop an information system.
A
Install the equipment.
E,G,H
Train nurses and support staff.
F,I,J
AON Network
A
B
C
D
E
F
G
H
I
J
K
Description
Immediate
Predecessor(s)
Responsibility

Select equipment.
and security.
ABC Hospital
Responsibility
Activity
AON
Ramesh
Rohit
Ashish
Rohit
Nikhil
Ramesh
A
B
C
D
E
F
Ashish
Rohit
Ram
Ashish
Ramesh
G
H
I
J
K
ABC Hospital
Activity
Description
Network
Description
Immediate
Predecessor(s)
Select equipment.
A
B
B
A
and security.
C
D
A
E,G,H
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
ABC Hospital
Immediate
Predecessor(s)
Select equipment.
A
A
B
B
A
nursing,
Startsupport staff, maintenance,
and security.
C
D
A
E,G,H
F,I,J
Responsibility
Activity
AON Network
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
Description
Immediate
Predecessor(s)
Select equipment.
A
A
B
B
A
nursing,
and security.
C
D
B
Develop an information
system.
A
E,G,H
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
16
ABC Hospital
Activity
AON Network
A
B
C
D
E
F
G
H
I
J
K
ABC Hospital
Immediate
Predecessor(s)
Description
Select equipment.
A
A
B
B
A
nursing,
maintenance,
Startsupport staff, C
and security.
C
D
B
system.
A
E,G,H
F,I,J
Responsibility
Activity
AON Network
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
ABC Hospital
Activity
AON Network
A
B
C
D
E
F
G
H
I
J
K
Select equipment.
A
A
B
B
A
nursing,
maintenance,
and security.
C
D
D
B
system.
A
E,G,H
F,I,J
Select equipment.
A
A
B
B
A
nursing,
maintenance,
and security.
C
D
D
B
system.
A
E,G,H
F,I,J
Responsibility
Activity
AON Network
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
Select equipment.
A
A
F
B
B
A
nursing,
maintenance,
and security.
C
D
D
B
system.
A
E,G,H
F,I,J
A
B
C
D
E
F
G
H
I
J
K
Select equipment.
A
A
F
B
B
A
nursing,
maintenance,
G
and security.
C
D
D
B
system.
A
E,G,H
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
ABC Hospital
Immediate
Predecessor(s)
Description
Adams
Taylor
Simmons
Adams
Johnson
ABC Hospital
AON Network
Immediate
Predecessor(s)
Description
Activity
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
ABC Hospital
Immediate
Predecessor(s)
Description
Immediate
Predecessor(s)
Description
Responsibility
Activity
AON Network
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
Immediate
Predecessor(s)
Description
Select equipment.
A
A
F
B
B
A
nursing,
maintenance,
G
and security.
C
D
D
B
H
system.
A
E,G,H
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
17
ABC Hospital
Activity
AON Network
A
B
C
D
E
F
G
H
I
J
K
Description
ABC Hospital
Immediate
Predecessor(s)
Select equipment.
A
A
F
B
B
A
nursing,
maintenance,
G
and security.
C
D
D
B
H
system.
A
E,G,H
F,I,J
Responsibility
Activity
AON Network
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
Description
A
B
C
D
E
F
G
H
I
J
K
Description
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
ABC Hospital
AON Network
Immediate
Predecessor(s)
Select equipment.
A
A
F
B
B
A
nursing,
maintenance,
G
and security.
C
D
D
B
H
J A
system.
E,G,H
F,I,J
Activity
ABC Hospital
Immediate
Predecessor(s)
Select equipment.
A
F
K A
B
B
A
nursing,
maintenance,
G
and security.
C
D
D
B
H
J A
system.
E,G,H
F,I,J
Responsibility
Activity
AON Network
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
Description
Immediate
Predecessor(s)
Select equipment.
A
F
K A
B
B
A
nursing,
maintenance,
Finish
G
and security.
C
D
D
B
H
J A
system.
E,G,H
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
E
Figure 1
ABC Hospital
Activity
AOA Network
A
B
C
D
E
F
G
H
I
J
K
Description
ABC Hospital
Immediate
Predecessor(s)
Select equipment.
A
B
B
A
and security.
C
D
A
E,G,H
F,I,J
Responsibility
Activity
AOA Network
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
Description
Immediate
Predecessor(s)
2 and medical staff.

Select administrative
Select equipment.
A
Prepare final
B
A construction plans and layout.
B
A
nursing,
and security.
1
C
D
A
E,G,H
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
18
ABC Hospital
Activity
AOA Network
A
B
C
D
E
F
G
H
I
J
K
ABC Hospital
Immediate
Predecessor(s)
Description

Select equipment.
A
Prepare final
B
B
A
nursing,
and security.
1
C
D
Develop anBinformation system.
A
E,G,H
F,I,J
Responsibility
Activity
AOA Network
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K

Select equipment. C
A
Prepare final
B
Bring utilities to the
B
3 site.
A
nursing,
and security.
1
C
5
D
A
E,G,H
D
F,I,J
AOA Network
A
B
C
D
E
F
G
H
I
J
K
Immediate
Predecessor(s)
Description
2 and medical staff. 8

I
Select equipment. C
A
Prepare final
B
B
3 site.
7
A
nursing,
maintenance,
Startsupport staff, G
and security.
1
H of equipment.
Purchase and take delivery
C
5
6
D
A
E
E,G,H
D
F,I,J
Responsibility
Activity
AOA Network
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
A
B
C
D
E
F
G
H
I
J
K
Immediate
Predecessor(s)
Description

I
Select equipment. C
A
Prepare final
B
B
3 site.
7
J in
Interview applicants and fill positions
A
nursing,
maintenance,
and security.
1
H of equipment.
C
5
6
D
A
E
E,G,H
D
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
ABC Hospital
AOA Network
Adams
Taylor
Simmons
Adams
Johnson
ABC Hospital
Activity
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
ABC Hospital
Activity
Immediate
Predecessor(s)
Description
ABC Hospital
Immediate
Predecessor(s)
Description

I Dummy
Select equipment. C
A
Prepare final
B
site.
B
3
7
J in
A
nursing,
maintenance,
and security.
1
H of equipment.
C
5
6
D
A
E
E,G,H
D
F,I,J
Responsibility
Activity
AOA Network
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
Immediate
Predecessor(s)
Description

I Dummy
Select equipment. C
KA
Prepare final
B
B
3 site.
7
J in
A
nursing,
maintenance,
Finish
and security.
1
H of equipment.
C9
5
6
D
A
E
E,G,H
D
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
4
Figure 2
19
ABC Hospital
Activity
Description
Completion Time
A
B
C
D
E
F
G
H
I
J
K
I
15
ABC Hospital
Immediate
Predecessor(s)
A
F
KA
Select equipment.
12
10
6
B
B
A
C
G
nursing,
Finish
10
35
and security.
C
B
D
H
JD
system.
9
10
40
4A
E,G,H
F,I,J
Responsibility
Activity
Description
Completion Time
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
A
B
C
D
E
F
G
H
I
J
K
I
15
Immediate
Predecessor(s)
A
F
KA
Select equipment.
12
10
6
B
B
A
C
G
nursing,
Finish
10
35
and security.
C
B
D
H
JD
system.
9
10
40
4A
E,G,H
F,I,J
Responsibility
Activity
Description
Completion Time
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
A
B
C
D
E
F
G
H
I
J
K
I
15
Immediate
Predecessor(s)
A
F
KA
Select equipment.
12
10
6
B
B
A
C
G
nursing,
Finish
10
35
and security.
C
B
D
H
JD
system.
9
10
40
4A
E,G,H
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
ABC Hospital
Immediate
Predecessor(s)
A
F
KA
Select equipment.
12
10
6
B
B
A
C
G
nursing,
Finish
10
35
and security.
C
B
D
H
JD
system.
9
10
40
4A
E,G,H
F,I,J
E
24
I
15
E
24
ABC Hospital
Description
Completion Time
Adams
Taylor
Simmons
Adams
Johnson
ABC Hospital
E
24
Activity
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
E
24
ABC Hospital
Description
Completion Time
Immediate
Predecessor(s)
A
F
KA
Select equipment.
12
10
6
B
B
A
C
G
nursing,
Finish
10
35
and security.
C
B
D
H
JD
system.
9
10
40
4A
E,G,H
F,I,J
E
24
Activity
I
15
Responsibility
Activity
Description
Completion Time
Johnson
Taylor
Adams
Taylor
Burton
Johnson
A
B
C
D
E
F
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K
I
15
Immediate
Predecessor(s)
A
F
KA
Select equipment.
12
10
6
B
B
A
C
G
nursing,
Finish
10
35
and security.
C
B
D
H
JD
system.
9
10
40
4A
E,G,H
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
E
24
20
ABC Hospital
Path
ABC Hospital
Expected Time (wks)
Immediate
Activity
Description I
Predecessor(s)
Completion Time
A-F-K
28
15
A
and medical staff.
A-I-K
33
B
Select site and
A-C-G-J-K
67Ado site survey.
F
KA
C
Select equipment.
12
10
6
B-D-H-J-K
D
Prepare final69
construction plans and layout.
B
B-E-J-K
E
Bring utilities43
to the site.
B
F
G
H
I
J
K
Path

C
G
nursing,
10
35
and security.
B
D
H
system.
9
10
40
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Activity
Adams
Taylor
Simmons
Adams
Johnson
G
H
I
J
K

C
G
nursing,
10
35
and security.
B
D
H
system.
9
10
40
E
24
Description
Completion Time
A
B
C
D
E
F
G
H
I
J
K
KA
6
B
B
A
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Finish
C
D
J
4A
E,G,H
F,I,J
Adams
Taylor
Simmons
Adams
Johnson
E
24
FORWARD PASS
ABC Hospital
Activity
Immediate
Predecessor(s)
Description
I
Completion Time
A-F-K
28
15
A
and medical staff.
A-I-K
33
B
Select site and
A-C-G-J-K
67Ado site survey.
F
C
Select equipment.
B-D-H-J-K
12
10
D
Prepare final69
construction
plans and layout.
B-E-J-K
E
Bring utilities43
to the site.
Finish
C
JD
4A
E,G,H
F,I,J
Expected Time (wks)
Immediate
Predecessor(s)
I
15
A
F
KA
Select equipment.
12
10
6
B
B
A
C
G
nursing,
Finish
10
35
and security.
C
B
D
H
JD
system.
9
10
40
4A
E,G,H
F,I,J
Responsibility
Johnson
Taylor
Adams
Taylor
Burton
Johnson
Adams
Taylor
Simmons
Adams
Johnson
To determine early start (ES) and early finish (EF)

times for each task
Work from left to right
Adding times in each path
Rule: when several tasks converge, the ES for the
next task is the largest of preceding EF times
E
24
Figure 3
ABC Hospital
ABC Hospital
I
15
12
10
10
35
Start
B
9
Earliest Start
and
Earliest Finish Times
10
40
E
24
Finish
I
15
Earliest start time

A
12
10
10
35
Start
B
9
Earliest Start
and
Finish
10
40
E
24
21
ABC Hospital
Earliest start time
0
ABC Hospital
I
15
A 12
12
10
10
35
Start
B
9
Earliest Start
and
Finish
10
40
A 12
12
10
E
24
B 9
12
A 12
12
10
B 9
10
35
Finish
D 19
10
40
12
12
Start
B 9
9
Earliest Start
and
24
12
A 12
12
9 E 33
ABC Hospital
A 12
12
12
12
Start
B 9
9
Earliest Start
and
12
F 22
K
6
C 22
10
35
9 E 33
24
I 27
F 22
10
C 22
10
35
Finish
D 19
10
40
I 27
15
10
D 19
24
ABC Hospital
I 27
10
H
40
9 E 33
15
D
10
15
Start
Finish
15
9
Earliest Start
and
G
35
24
ABC Hospital
C
10
Start
9
Earliest Start
and
ABC Hospital
I
15
Earliest finish time
19
Finish
H 59
40
A 12
12
12
12
Start
F 22
10
C 22
22
10
B 9
9
Earliest Start
and
D 19
10
G 57
Finish
35
19
H 59
40
9 E 33
24
22
ABC Hospital
12
ABC Hospital
I 27
Earliest start time
12
15
A 12
12
12
12
Start
F 22
10
C 22
22
10
B 9
9
Earliest Start
and
D 19
G 57
19
H 59
59
40
A 12
12
12
Start
Critical
path
J 63
B 9
9
Earliest Start
and
9 E 33
24
BACKWARD PASS
A 12
12
12
Start
63 K 69
63
69
22
10
B 9
9
Latest Start
and
Latest Finish Times
D 19
10
9 E 33
24
Finish
19
H 59
59
40
J 63
4
I 27
A 12
12
12
Start
F 22
63 K 69
10
12
C 22
22
10
B 9
9
Latest Start
and
Latest Finish Times
D 19
G 57
Finish
35
19
H 59
59
40
10
J 63
4
9 E 33
24
I 27
15
F 22
C 22
D 19
G 57
35
15
12
10
12
22
24
15
C 22
9 E 33
ABC Hospital
I 27
63 K 69
10
ABC Hospital
To determine the last finish (LF) and last start (LS)

times
Start at the end node
Compute the bottom pair of numbers
Subtract duration from connecting nodes latest start
time
Rule: when several tasks converge, the LF for the
preceding task is the smallest of succeeding LS times
F 22
10
12
12
10
12
Finish
35
10
ABC Hospital
I 27
15
G 57
Finish
35
19
H 59
40
Latest
finish
time
59
J 63
4
A 12
12
12
Start
F 22
10
12
C 22
Latest
start
time
22
10
B 9
9
Latest Start
and
Latest Finish Times
D 19
10
63 K 69
63
69
G 57
Finish
35
19
H 59
40
Latest
finish
time
59
J 63
4
9 E 33
24
23
ABC Hospital
ABC Hospital
12
27
48 15 63
A 12
12
63 K 69
63
69
12
22
53 10 63
12
Start
C 22
B 9
D 19
10
22
G 57
19
H 59
40
59
59
24
ABC Hospital
A 12
12
B 9
9
Latest Start
and
Latest Finish Times
9
19
9 10 19
9 E 33
35 24 59
0
12
2 12 14
19
59
19 40 59
Start
Finish
Critical
path
59
63
59 4 63
0
0
ABC Hospital
Gantt
Charts
Figure 4 (a)
B 9
9
Latest Start
and
Latest Finish Times
22
57
24 35 59
19
19
H 59
40 59
Finish
59
59
J 63
4 63
12
27
48 15 63
63 K 69
63
69
12
22
53 10 63
22
57
24 35 59
Latest finish time
63 K 69
63
69
63 K 69
63
69
9 E 33
35 24 59
Latest start time
D 19
10
Earliest start time
12
22
53 10 63
12
22
14 10 24
Start
ABC Hospital
12
27
48 15 63
B 9
9
Latest Start
and
Latest Finish Times
9 E 33
C 22
10
J 63
4 63
12
22
53 10 63
12
Start
Finish
35
A 12
12
10
9
Latest Start
and
Latest Finish Times
12
27
48 15 63
12
22
14 10 24
9
19
9 10 19
22
57
24 35 59
19
59
19 40 59
Finish
59
63
59 4 63
9 E 33
35 24 59
ABC Hospital
Gantt
Charts
Figure 4(b)
24
ABC Hospital
ABC Hospital
12
27
48 15 63
Activity
Slack
0
12
2 12 14
12
22
14 10 24
Start
0
0
B 9
9 9
Activity Slack
Analysis
ABC Hospital
A
ABC Hospital
0
0
B 9
9 9
Activity Slack
Analysis
9
19
9 10 19
or
63 K 69
63
69
or
SlackK = 69 69
12
53
19
59
19 40 59
Activity Slack
Analysis
B 9
9 9
59
59
J 63
4 63
12
22
14 10 24
0
0
B 9
9 9
Activity Slack
Analysis
63 K 69
63
69
12
22
53 10 63
9
19
9 10 19
22
57
24 35 59
19
59
19 40 59
Finish
59
63
59 4 63
9 E 33
35 24 59
ABC Hospital
Activity Slack
10 63
9
19
9 10 19
9 E 33
35 24 59
or
63 K 69
63
69
SlackK = 0
0
12
2 12 14
H 59
40 59
12
53
F 22
Finish
59
59
12
22
14 10 24
Start
J 63
0
0
4 63
Activity Slack
Analysis
B 9
9 9
63 K 69
63
69
10 63
22
57
24 35 59
19
19
12
27
48 15 63
SlackK = 0
F 22
0
0
14
Start
59
63
59 4 63
12
22
14 10 24
Start
H 59
40 59
Finish
12
27
48 15 63
0
12
2 12 14
A 12
22
57
24 35 59
Activity Slack
SlackK = 63 63
0
2
Slack = LF EF 12
9 E 33
35 24 59
ABC Hospital
19
19
Finish
12
27
48 15 63
Slack = LS ES
12
22
53 10 63
12
22
14 10 24
Start
22
57
24 35 59
Activity Slack
I
12
27
48 15 63
0
12
2 12 14
9
19
9 10 19
9 E 33
35 24 59
Figure 5
Activity Slack
63 K 69
63
69
12
22
53 10 63
9
19
9 10 19
22
57
24 35 59
19
19
H 59
40 59
Finish
59
59
J 63
4 63
9 E 33
35 24 59
25
ABC Hospital
Node Duration ES
0
12
2 12 14
0
0
B 9
9 9
Activity Slack
Analysis
Node Duration ES
A
B
C
D
E
F
G
H
I
J
K
9
19
9 10 19
0
12
2 12 14
19
19
H 59
40 59
0
12
9
9
12
22
19
12
59
Start
63
0
14
9
35
53
24
19
48
59
63
0
2
59
59
J 63
0
0
4 63
Node Duration ES
0
0
B 9
9 9
Activity Slack
Analysis
I 27
12
48 15 63
63 K 69
63
69
12
22
14 10 24
9
19
9 10 19
22
57
24 35 59
19
59
19 40 59
Finish
B 9
9
19
9 10 19
9 9
LS
19
19
H 59
40 59
Finish
59
59
J 63
4 63
Slack
ABC0 Hospital
2
2
12
9
10
10
24
10
35
40
15
4
6
22
57
24 35 59
9 E 33
35 24 59
0
12
9
9
12
22
19
12
59
63
0
14
9
35
53
24
19
48
59
63
59
63
59 4 63
12
27
48 15 63
0
2
0
26
41
2
0
36
0
0
0
0
9 E 33
35 24 59
ABC Hospital
A
B
C
D
E
F
G
H
I
J
K
12
22
14 10 24
Start
Activity Slack
Analysis
12
22
53 10 63
Finish
Slack
0
2
0
26
A 12
41
14
12
2
0
36
0
0
63 K 69
63
69
12
22
53 10 63
22
57
24 35 59
9 E 33
35 24 59
LS
63 K 69
63
69
ABC0 Hospital
2
2
12
9
10
10
24
10
35
40
15
4
6
Slack
12
27
48 15 63
12
22
53 10 63
12
22
14 10 24
Start
LS
ABC Hospital
12
27
48 15 63
63 K 69
63
69
12
22
53 10 63
12
22
14 10 24
B 9
22
57
24 35 59
9
19
9 10 19
9 9
19
59
19 40 59
Finish
59
63
59 4 63
9 E 33
35 24 59
Critical Path
ABC Hospital
12
27
48 15 63
Cost-Time Relationships in Cost Analysis

8000
Start
0
0
B 9
9 9
12
53
F 22
63 K 69
63
69
10 63
C 22
12
G 57
22
14 10 24
24 35 59
9
19
9 10 19
Direct cost (dollars)
0
12
2 12 14
19
19
H 59
40 59
Finish
59
59
J 63
Linear cost assumption

6000
5200
5000
9 E 33
35 24 59
Estimated costs for

a 2-week reduction,
from 10 weeks to
8 weeks
4000
3000
4 63
Critical Path
Crash cost (CC)
7000
Normal cost (NC)

|
5
|
6
(Crash time)
Figure 6
|
7
|
9
|
10
|
11
(Normal time)
Time (weeks)
26
ABC Hospital
TABLE 1
ABC Hospital
Minimum-Cost Schedule
DIRECT COST AND TIME DATA FOR

THE ABC HOSPITAL PROJECT
Activity
Normal
Time
(NT)
Normal
Cost
(NC)
A
B
C
D
E
F
G
H
I
J
K
12
9
10
10
24
10
35
40
15
4
6
$ 12,000
50,000
4,000
16,000
120,000
10,000
500,000
1,200,000
40,000
10,000
30,000
Totals
$1,992,000
Crash
Time
(CT)
11
7
5
8
14
6
25
35
10
1
5
Crash
Cost
(CC)
Maximum
Time
Reduction
(wk)
$ 13,000
64,000
7,000
20,000
200,000
16,000
530,000
1,260,000
52,500
13,000
34,000
Cost of
Crashing per
Week
1
2
5
2
10
4
10
5
5
3
1
$ 1,000
7,000
600
2,000
8,000
1,500
3,000
12,000
2,500
1,000
4,000
33 weeks
28 weeks
67 weeks
69 weeks
43 weeks
Indirect costs = $8,000/week

Penalty cost = $20,000/week after week 65
Total cost = $2,624,000
Critical Path B-D-H-J-K: 69 weeks
Crash Activity J by 3 weeks @ $1,000/week
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000

A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000

3($28,000) 3($1,000) = $81,000
$2,624,000 $81,000 = $2,543,000
3($28,000) 3($1,000) = $81,000
ABC Hospital
ABC Hospital
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
ABC Hospital
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
$2,209,000
ABC Hospital
A-I-K:
A-F-K:
A-C-G-J-K:
A-I-K:
A-F-K:
A-C-G-J-K:
Minimum Cost Schedule

B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,543,000

A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
A
12
B-D-H-J-K:
F
B-E-J-K:
10
69 weeks
K
43 weeks
6
Total cost = $2,624,000 $2,543,000

C
G
Finish
10
35
Indirect costsStart
= $8,000/week
B

I
15
40
9 69 weeks
10
1
Critical Path B-D-H-J-K:
E
3($28,000) 3($1,000) = $81,000

$2,624,000 $81,000 = $2,543,000
24
3($28,000) 3($1,000) = $81,000
$2,624,000 $81,000 = $2,543,000
27
ABC Hospital
Minimum Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
A
12
ABC Hospital
I
15
B-D-H-J-K:
F
B-E-J-K:
69 weeks
K
43 weeks
10
Total cost = $2,624,000 $2,543,000

C
G
Finish
10
35
Indirect costs Start
= $8,000/week
B
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,543,000

40
9 69 weeks
10
1

Crash Activity D by 2 weeks @ $2,000/week
E
24
3($28,000) 3($1,000) = $81,000

$2,624,000 $81,000 = $2,543,000
ABC Hospital
ABC Hospital
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,543,000

$28,000 + $8,000 2($2,000) = $32,000
$2,543,000 $32,000 = $2,511,000
ABC Hospital
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks A
67 weeks 12
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,511,000

$28,000 + $8,000 2($2,000) = $32,000
$2,543,000 $32,000 = $2,511,000
ABC Hospital
I
15
B-D-H-J-K:
F
B-E-J-K:
10
69 weeks
43Kweeks
6
Total cost = $2,624,000 $2,511,000

C
G
Finish
10
35
Indirect costsStart
= $8,000/week
B
A-I-K:
A-F-K:
A-C-G-J-K:
40
9
8
1
64 weeks
E
24
$28,000 + $8,000 2($2,000)
= $32,000
$2,543,000 $32,000 = $2,511,000
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks A
67 weeks 12
I
15
B-D-H-J-K:
F
B-E-J-K:
10
69 weeks
43Kweeks
6
Total cost = $2,624,000 $2,511,000

C
G
Finish
10
35
Indirect costsStart
= $8,000/week
B
40
9
8
1
64 weeks
E
24
$28,000 + $8,000 2($2,000)
= $32,000
$2,543,000 $32,000 = $2,511,000
28
ABC Hospital
ABC Hospital
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,511,000

Critical Paths B-D-H-J-K and A-C-G-J-K: 64 weeks
Crash Activity K by 1 week @ $4,000/week
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,511,000

$8,000 $4,000 = $4,000
$2,511,000 $4,000 = $2,507,000
ABC Hospital
ABC Hospital
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,507,000

A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks A
12
67 weeks
I
15
B-D-H-J-K:
FB-E-J-K:
10
$8,000 $4,000 = $4,000

$2,511,000 $4,000 = $2,507,000
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks A
12
67 weeks
H
40
E
24
ABC Hospital
I
15
B-D-H-J-K:
FB-E-J-K:
10
69 weeks
43K weeks
5
Total cost = $2,624,000

$2,507,000
C
G
Start
Finish
10
35
B
9
8
1
Critical Paths B-D-H-J-K
and
A-C-G-J-K: 63
weeks
$8,000 $4,000 = $4,000

$2,511,000 $4,000 = $2,507,000
ABC Hospital
Total cost = $2,624,000

$2,507,000
C
G
Start
Finish
10
35
B

69 weeks
43K weeks
$8,000 $4,000 = $4,000

$2,511,000 $4,000 = $2,507,000
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,507,000

40
9
8
1
and
A-C-G-J-K:
63
weeks
E
24
A-I-K:
A-F-K:
A-C-G-J-K:

Crash Activities B and C by 2 weeks
@ $7,000/week and $600/week
29
ABC Hospital
ABC Hospital
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,507,000

2($8,000) 2($7,600) = $800
$2,507,000 $800 = $2,506,200
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks A
67 weeks12
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,506,200

ABC Hospital
I
15
B-D-H-J-K:
F
B-E-J-K:
10
69 weeks
43Kweeks
5
Total cost = $2,624,000 C$2,506,200

G
Start
Finish
10
35
B
33 weeks
28 weeks
67 weeks
2($8,000) 2($7,600) = $800

$2,507,000 $800 = $2,506,200
ABC Hospital
A-I-K:
A-F-K:
A-C-G-J-K:
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks A
67 weeks12
2($8,000) 2($7,600) = $800

$2,507,000 $800 = $2,506,200
STANDARD PERT ASSUMPTIONS

1. The activities are independent
2 The critical path contains a large no. of activities
so that we can invoke the Central Limit Theorem.
3 .All activities not on the critical path are ignored.
4. Activity times follow a Beta distribution.
5. The mean and variance of the activities are given
by (a+4m+b)/6 and [(b-a)/6]2.
B-D-H-J-K:
69 weeks
43Kweeks
F
B-E-J-K:
10
Total cost = $2,624,000 C$2,506,200

G
Start
Finish
8
35
40
9
8
1
and
A-C-G-J-K:
61
weeks
E
24
I
15
40
7
8
1
and
A-C-G-J-K:
61
weeks
E
24
2($8,000) 2($7,600) = $800

$2,507,000 $800 = $2,506,200
Probabilistic Time Estimates

Area under curve
between a and b
is 99.74%
Probability
A-I-K:
A-F-K:
A-C-G-J-K:
3s
m
Mean
3s
Time
b
Figure 7 Normal Distribution
30
ABC Hospital
ABC Hospital
Probabilistic
Time Estimates
Probabilistic
Time Estimates
Mean
Start
a + 4m + b
6
te =
Variance
s2 =
Finish
Activity B
Most
Optimistic Likely Pessimistic
(a)
(m)
(b)
7
8
15
Finish
ABC Hospital
Time Estimates (wk)
Activity B
Most
Optimistic Likely Pessimistic
(a)
(m)
(b)
7
8
15
Start
7 + 4(8) + 15
= 9 weeks
6
Optimistic Likely
Activity
(a)
(m)
( 156- 7 ) = 1.78
ABC Hospital
Finish
A
B
C
D
E
F
G
H
I
J
K
11
7
5
8
14
6
25
35
10
1
5
12
8
10
9
25
9
36
40
13
2
6
Activity Statistics
Pessimistic Expected
(b)
Time (te )
13
15
15
16
30
18
41
45
28
15
7
12
9
10
10
24
10
35
40
15
4
6
Probabilities
Probabilities
Critical Path = B - D - H - J - K
T = 72 days
T = 72 days
TE = 69 days
s2 = (variances of activities)
Variance
(s2 )
0.11
1.78
2.78
1.78
7.11
4.00
7.11
2.78
9.00
5.44
0.11
ABC Hospital
Critical Path = B - D - H - J - K
T TE
z=
s2
s2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89

72 69
11.89
z=
Probabilistic
Time Estimates
s2 =
Start
ba
6
ABC Hospital
te =
TE = 69 days
z=
T TE
s2
s2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89

z=
72 69
= 0.87
11.89
From Appendix
Pz = .8078 .81
31
ABC Hospital
ABC Hospital
Probabilities
Probabilities
Normal distribution:
Critical
Path
- K= 69 weeks;
Mean
Length
of = B - D - H - J
critical path
T = 72 days
s2 =
Probability of
meeting the of
(variances
schedule is
0.8078
s = 3.45 weeks
TE = 69 days
activities)
T TEof
z Probability
=
exceeding
s272
weeks is 0.1922
s2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89

z=
Path = A - C - G - J - K
72 69
From
69
72 Appendix 2
= 0.87
Pz = (weeks)
.8078 .81
11.89
Project duration
Figure
T = 72 days
TE = 67 days
z=
T TE
s2
s2 = 0.11 + 2.78 + 7.11 + 5.44 + 0.11 = 15.55

z=
72 67
= 1.27
15.55
From Appendix 2
Pz = .8980 .90
SUMMARY
Basic scheduling computations can be done on both
A-O-A or A-O-N networks.
A-O-N networks are simpler to draw, though they
lack intuitive work flow interpretation of A-O-A
networks.
There are no float anomalies in A-O-N networks.
A-O-N networks are becoming more popular, in
computer packages,
SUMMARY
Basic PERT analysis
Three time estimates for activities
Mean and variance computation
Forward and backward pass on the network
Critical path identification
Distribution of project completion time
Probability statements about project completion.
SUMMARY
An Evaluation of PERT
Leads to optimistic results
Basic PERT assumptions lead to errors at both
activity level as well as at their aggregation.
Alternatives approaches
Simulation etc.
32
Some limitations of CPM/PERT techniques

Major problems: Very strong (and sometimes
unrealistic) assumptions are required, e.g.
Project is completely defined as a sequence of
identifiable and independent activities with known
relationships
Outcomes of the project activities are known in advance
Activity times are independent and cant be accurately
estimated
Possible solutions
Graphical Evaluation and Review Technique (GERT)
technique
Discrete event simulation
33

Project Management

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Project Management

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PROJECT MANAGEMENT

Involving many people

Two defining features:

Formal definition: A project is a complex effort, made up of

Types of projects that could be considered :

Project versus Program

Triple Constraints Theory

Preparing for an examination

Projects at personal level

PROJECTS IN LOCAL NEIGHBOURHOOD

Construction of building, highway

Launching a new satellite

Project Management Framework

Projects are divided up into phases, collectively project phases

The Phases often overlap!!!

Project phases are marked by completion of one or more

Questions at the end of each phase (known as phase exits, kill

Determine if the project should continue

Deliverables from the preceding phase are usually approved

FAST TRACKING: projects that have overlapping phases

Phases of the Project Life Cycle

Costs and Over

LIFE CYCLE OF A PROJECT

Stakeholders are the people involved in or affected

the project sponsor and project team

A Project as a Production System

P (No. of Products or VARIETY)

Knowledge base for Project

Team members are often co-located.

PROJECT SUCCESS CRITERIA

The Immutable Laws of project

The Immutable Laws of project

The new challenges

Heterogeneity of projects, ranging from engineering

What are the objectives?

SEARCH NEW IDEAS

Emerging market trends.

Shortlist candidate ideas for detailed scrutiny.

Experience and expertise

Newer unfamiliar technologies

SOURCE OF NEW PRODUCT IDEAS

Marketing and sales department

Poor Fair Good Vgood Excellent

MORTALITY OF NEW PROJECT IDEAS

CRITERIA IN SCREENING PROJECTS

REDUCE VEHICULAR POLLUTION IN

REDUCE VEHICULAR POLLUTION IN

SCORING OF ALTERNATIVE PROJECTS

v poor poor fair average good excellent

SCORING OF ALTERNATIVE PROJECTS

Past and current demand trends

Effluents and waste disposal

ECOLOGICAL APPRAISAL (Continued)

Likely damage & the cost of restoration

Loan returning capability

Investment and phasing of the total cost

PROJECT PLANNING AND SCHEDULING

Insure goal achievement

Why do plans fail?

What is a Project Plan?

Plans are based on insufficient data

The basic project scheduling

To put the projects activities in a

WORK BREAKDOWN STRUCTURE