Project Management

Project Management Process

Project
unique, one-time operational activity or effort

Project Management Process

Project Management Process

Project Elements
Objective Scope Contract requirements Schedules Resources Personnel Control Risk and problem analysis

Project Team and Project Manager

Project team
made up of individuals from various areas and departments within a company

Matrix organization
a team structure with members from functional areas, depending on skills required

Project manager
most important member of project team

Scope Statement
Scope statement a document that provides an understanding, justification, and expected result of a project Statement of work written description of objectives of a project

Work Breakdown Structure

Work breakdown structure (WBS) Breaks a project into components, subcomponents, activities, and tasks

Work Breakdown Structure for Computer Order Processing System Project

Responsibility Assignment Matrix

Organizational Breakdown Structure (OBS)
a chart that shows which organizational units are responsible for work items

Responsibility Assignment Matrix (RAM)

shows who is responsible for work in a project

Responsibility Assignment Matrix

Global and Diversity Issues in Project Management

Global project teams are formed from different genders, cultures, ethnicities, etc. Diversity among team members can add an extra dimension to project planning Cultural research and communication are important elements in the planning process

Project Scheduling
Steps
Define activities Sequence activities Estimate time Develop schedule

Techniques
Gantt chart CPM/PERT

Software
Microsoft Project

Gantt Chart
Graph or bar chart Bars represent the time for each task Bars also indicate status of tasks Provides visual display of project schedule

Example -1 construction of a house 1. Design a house and get finance 3 months

2. Lay foundation Order and receive material 3. Build house Select paint and after that select carpet 2 months 1 month 3 months 1 month 1 month 1 month

4. Finish work

Example of Gantt Chart

0
Activity Design house and obtain financing Lay foundation

Month 4

10

Order and receive materials

Build house Select paint Select carpet Finish work

3 Month

Project Control
Time management Cost management Performance management
Earned Value Analysis standard procedure to numerically measure a projects progress forecast its completion date and cost measure schedule and budget variation

Project Control
Quality management Communication Enterprise project management

CPM/PERT
Critical Path Method (CPM)
DuPont & Remington-Rand Deterministic task times Activity-on-node network construction

Project Evaluation and Review Technique (PERT)

US Navy and Booz, Allen & Hamilton Probabilistic task time estimates Activity-on-arrow network construction

Project Network
Activity-on-node (AON)
nodes represent activities arrows show precedence relationships
Branch
1 2

Node
3

Activity-on-arrow (AOA)
arrows represent activities nodes are events for points in time

Event
completion or beginning of an activity in a project

AON Network for House Building Project

Lay foundation Build house Activity Number Activity Time

2 2

4 3

Start

1 3
Design house and obtain financing

7 1 3 1
Order &receive materials

5 1
Select paint

6 1
Select carpet

Finish work

AOA Project Network for a House

3
2 0 1 Order and receive materials

Lay foundation

Dummy Build house Finish work

3 Design house and obtain financing

4
Select paint 1

3
1

6
Select carpet

Concurrent Activities
Dummy
two or more activities cannot share same start and end nodes
Lay foundation

3
Lay foundation Dummy 2 1 0

2
Order material

3
2

Order material
(b) Correct precedence relationship

(a) Incorrect precedence relationship

SUM-1 Draw (AOA) network diagram for the data given below

Activity A B C D E F G H

Immediate predecessor activity A A B C D E F ,G

SUM-2 Draw a network diagram and find critical path

Activity A B C D E F G H I J

Immediate predecessor activity A A A B C C E ,F D ,G H ,I

Duration of activity 12 8 4 3 12 18 5 4 9 6

AON network
2 2 4 3

Start

1 3 3 1 5 1 6 1

7 1

Critical Path
2 2 4 3 7 1 3 1 5 1 6 1 1 3

Start

A: B: C: D:

1-2-4-7 3 + 2 + 3 + 1 = 9 months 1-2-5-6-7 3 + 2 + 1 + 1 + 1 = 8 months 1-3-4-7 3 + 1 + 3 + 1 = 8 months 1-3-5-6-7 3 + 1 + 1 + 1 + 1 = 7 months

Critical path

Longest path through a network Minimum project completion time

Activity Start Times

Start at 5 months

2 2 Start 1 3 3 1
Start at 3 months

4 3

Finish at 9 months

7 1 5 1 6 1
Start at 6 months

Finish

Activity Scheduling
Earliest start time (ES)
earliest time an activity can start ES = maximum EF of immediate predecessors

Forward pass
starts at beginning of CPM/PERT network to determine earliest activity times

Earliest finish time (EF)

earliest time an activity can finish earliest start time plus activity time EF= ES + t

Activity Scheduling
Latest start time (LS)
Latest time an activity can start without delaying critical path time LS= LF - t

Latest finish time (LF)

latest time an activity can be completed without delaying critical path time LF = minimum LS of immediate predecessors

Backward pass
Determines latest activity times by starting at the end of CPM/PERT network and working forward

Activity Slack
Activity
*1 *2 3 *4

LS
0 3 4 5

ES
0 3 3 5

LF
3 5 5 8

EF
3 5 4 8

Slack S
0 0 1 0

5
6 *7 * Critical Path

6
7 8

5
6 8

7
8 9

6
7 9

1
1 0

Probabilistic Time Estimates

Beta distribution
probability distribution traditionally used in CPM/PERT a + 4m + b t= 6

Mean (expected time): Variance: where

b-a = 6

a = optimistic estimate m = most likely time estimate b = pessimistic time estimate

Activity Time Estimates

TIME ESTIMATES (WKS) ACTIVITY MEAN TIME VARIANCE

a 6 3 1 2 2 3 2 3 2 1 1

m 8 6 3 4 3 4 2 7 4 4 10

b 10 9 5 12 4 5 2 11 6 7 13

t 8 6 3 5 3 4 2 7 4 4 9

2 0.44 1.00 0.44 2.78 0.11 0.11 0.00 1.78 0.44 1.00 4.00

1 2 3 4 5 6 7 8 9 10 11

Activity Early, Late Times & Slack

ACTIVITY

t 8 6 3 5 3 4 2 7 4 4 9

0.44 1.00 0.44 2.78 0.11 0.11 0.00 1.78 0.44 1.00 4.00

ES

EF

LS

LF

1 2 3 4 5 6 7 8 9 10 11

0 0 0 8 6 3 3 9 9 13 16

8 6 3 13 9 7 5 16 13 17 25

1 0 2 16 6 5 14 9 12 21 16

9 6 5 21 9 9 16 16 16 25 25

1 0 2 8 0 2 11 0 3 8 0

Total Project Variance

2 = 22 + 52 + 82 + 112

= 1.00 + 0.11 + 1.78 + 4.00

= 6.89 weeks

Probabilistic Network Analysis

Determine probability that project is completed within specified time

Z= where = = x= Z=

x-

tp = project mean time project standard deviation proposed project time number of standard deviations that x is from the mean

Normal Distribution of Project Time

Probability

= tp

Time

Southern Textile
What is probability that project is completed within 30 weeks?
P(x 30 weeks)

= 6.89 weeks
2

Z= =

x-

6.89

= 2.62 weeks
= 25 x = 30
Time (weeks)

30 - 25 2.62

= 1.91
From Table A.1, (appendix A) a Z score of 1.91 corresponds to a probability of 0.4719. Thus P(30) = 0.4719 + 0.5000 = 0.9719

Southern Textile
What is probability that project is completed within 22 weeks?
P(x 22 weeks) = 0.1271 0.3729

= 6.89 weeks
2

Z=
=

x-

6.89

= 2.62 weeks
x = 22 = 25 Time (weeks)

22 - 25 2.62

= -1.14
From Table A.1, (appendix A) a Z score of 1.14 corresponds to a probability of 0.3729. Thus P(22) = 0.5000 - 0.3729 = 0.1271

Project Crashing
Crashing
reducing project time by expending additional resources

Crash time
an amount of time an activity is reduced

Crash cost
cost of reducing activity time

Goal
reduce project duration at minimum cost

Project Network Building a House

2 8 1
12

4
12

7 4 3 4 5 4 6 4

Project Crashing
NORMAL TIME (WEEKS) CRASH TIME (WEEKS) NORMAL COST CRASH COST TOTAL ALLOWABLE CRASH TIME (WEEKS) CRASH COST PER WEEK

ACTIVITY

1 2 3 4 5 6 7

12 8 4 12 4 4 4

7 5 3 9 1 1 3

$3,000 2,000 4,000 50,000 500 500 15,000 $75,000

$5,000 3,500 7,000 71,000 1,100 1,100 22,000 $110,700

5 3 1 3 3 3 1

$400 500 3,000 7,000 200 200 7,000

$500 2 8 1
12

$7000 4
12

$7000 7 4 6 4 $200

FROM
Project Duration: 36 weeks

$400

3 4 $3000

5 4 $200

$500

$7000 4
12

TO
Project Duration: 31 weeks Additional Cost: $2000
1
7

2 8

$7000

7 4
6 4 $200

$400

3 4

5 4 $200

$3000

Time-Cost Relationship
Crashing costs increase as project duration decreases Indirect costs increase as project duration increases Reduce project length as long as crashing costs are less than indirect costs