OPERATIONS MANAGEMENT

O P M
PROJECT MANAGEMENT
By: HAKEEM UR REHMAN PCBA UCP

WHAT IS A PROJECT?
Non Routine, one time effort, limited by time and resources, and performance specifications designed to meet customer needs. (or) Special operations designed to accomplish a set of objectives in a limited time frame.

WHAT IS PROJECT MANAGEMENT?

Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project .

PROJECT MANAGEMENT TOOLS AND TECHNIQUES



Good project management deals with three factors: factors: time, cost and performance. performance. Some specific ones include
 

Gantt charts, PERT charts, critical path analysis (time) Cost estimates and Earned Value Analysis (cost) A hierarchical method that successively subdivides the work of the project into smaller details. details. Such a structure defines tasks that can be completed independently of other tasks, facilitating resource allocation, assignment of responsibilities, and measurement and control of the project. project.

Work Breakdown Structure (WBS)



Work Breakdown Structure (WBS) DIAGRAM

WORK BREAKDOWN STRUCTURE OUTLINE

Level 1
Task 1 Subtask 1.1 Work Package 1.1.1 Work Package 1.1.1 Work Package 1.1.1 Subtask 1.2 Work Package 1.2.1 Work Package 1.2.2 Work Package 1.2.3 Task 2 Subtask 2.1 Work Package 2.1.1 Work Package 2.1.2 Work Package 2.1.3

Level 2

Level 3

GANTT CHART

0
Activity Design house and obtain financing Lay foundation Order and receive materials Build house Select paint Select carpet Finish work

Month 4 |

| 8

|10

3 Month

  

Graph or bar chart with a bar for each project activity that shows passage of time Provides visual display of project schedule Slack: amount of time an activity can be delayed without delaying the project

Basic Rules: Developing a project network

Eight Rules Apply:
1. 2.

3.

4. 5.

6.

7.

8.

Networks typically flow from left to right. An Activity cannot begin until all preceding activities have been completed. Arrows on networks indicate precedence and flow. Arrows can cross over each other. Each activity should have a unique identification number. An activity identification number must be larger than that of any activities preceding it. Looping in not allowed (in other words recycling through a set of activities cannot take place). Conditional statements are not allowed (i.e. this type of statement should not appear: if successful, do something; if not, do nothing) When there are multiple starts, a common start node can be used to indicate a clear project beginning on the network. Similarly, a single project end, node can be used to indicate a clear ending.

CONSTRUCTING A PROJECT NETWORK



Activity
 

An element of the project that require time; may or may not required resources Description of activities should use verb/noun format; develop project specifications More than one activity immediately preceding it ( more than one arrow flowing to it) Activities that can take place at the same time, if the manager wishes; may or may not occur simultaneously A sequence of connected, dependent activities Longest path (s) through the network; if an activity on the path is delayed, the project is delayed the same amount of time. A point in time when the activity is started or finished; does not consume time More than one activities immediately following it ( more than one dependency arrow flowing from it) A dummy activity, which is normally depicted by a dashed arrow, consumes no time or resources.

 

Merge Activity


Parallel Activities


 

Path


Critical Path


 

Event


Burst Activity


Dummy Activity


Activity On Arc Network Fundamentals

Predecessor, Successor & Concurrent or Parallel activities A
1

Y and Z are preceded by X

A is preceded by nothing B is preceded by A C is preceded by B X

1

Z
Y and Z can begin at the same time, if you wish

(A)

(B)

Activity
J K L

On

Arc Network Fundamentals

Z is preceded by X and Y

Predecessor, Successor & Concurrent or Parallel activities M X

1

J,K & L can begin at the same time, if you wish (they need not occur simultaneously)

AA

All (J,K,L) must be completed before M can begin

AA is preceded by X and Y

(C)

(D)

Activity

On

Arc Network Fundamentals

Predecessor, Successor & Concurrent or Parallel activities

Use of Dummy activity:

1. Activity C can start immediately after A and B are completed. 2. Activity E can start immediately after only B is completed. A 1 D B 2 E

Here, D is a Dummy Activity.

Example: (AOA Network)

Consider the following data: Activity A B C D E F G H I J K Description
Select administrative and medical staff Select site and do site survey Select equipment Prepare final construction plans and layout Bring utilities to the site Interview applicants and fill positions in nursing, support staff, maintenance, & security Purchase and take delivery of equipment Construct the hospital Develop an information system Install the equipment Train nurses and support staff

Immediate Predecessor(s) A B B A C D A E, G, H F, I, J

Draw the AOA network Diagram.

AOA Network:
F 2 C 3 1 5 B D E 4 6 H I 7 G J K 9 8

QUESTION Develop the network by yourself.

Activity Description Immediate Predecessor(s) None None None A B D,E B,C F,G H

A B C D E F G H I

Procurement of parts for sub Procurement of parts for sub Procurement of parts for sub Building sub Building sub Building sub Building sub assembly 1 assembly 2 assembly 4 assembly 3

assembly 1 assembly 2 assembly 3

Building the final product Final Test

PROGRAM/PROJECT EVALUATION & REVIEW TECHNIQUE (PERT) (PERT) & CRITICAL PATH METHOD (CPM) (CPM)


In 1957 the Critical Path Method (CPM) was developed as a network model for project management. CPM is a deterministic management. method that uses a fixed time estimate for each activity. While activity. CPM is easy to understand and use, it does not consider the time variations that can have a great impact on the completion time of a complex project. project. The Program Evaluation and Review Technique (PERT) is a network model that allows for randomness in activity completion times. times. PERT was developed in the late 1950's for the U.S. Navy's 1950's Polaris project having thousands of contractors. It has the potential to reduce both the time and cost contractors. required to complete a project. project.

CPM: EXAMPLE
CPM Network
2

f, 15 g, 17
6

a, 6

h, 9 i, 6
8

b, 8
3

d, 13
7

j, 12

c, 5 e, 9
4

Activity-on-Arc Network Fundamentals Activity-on

Performing few simple computations allows PM to complete a process know as Forward and Backward Pass FORWARD PASS
1. 2. 3.

EARLIEST TIMES
ES) EF) ET)

How soon can the activity start? (early start How soon can the activity finish? (early finish

How soon can the project be finished? (expected time

BACKWARD PASS
1. 2. 3.

LATEST TIMES
LS) LF)

How late can the activity start? (late start How late can the activity finish? (late finish

Which activities represent critical path (CP)? This is the longest path in the network which, when delayed, will delay the project How long can the activity be delayed? (slack or float SL)

4.

CPM Example
ES and EF Times
2

f, 15 6 21 g, 17 6 23
6

a, 6 0 6
1

i, 6 23 29

h, 9 21 30

b, 8 0 8 c, 5 0 5
4 3

d, 13 8 21 e, 9 5 14
7

j, 12 21 33 Projects EF = 33

Activity-on-Arc Network Fundamentals Activity-on

Backward Pass

Latest Times; similar to

Forward Pass; remember three things:

1. Subtract

activity times along each path starting Dur. = LS)

with the project end activity (LF

2. Carry

the LS to the next preceding activity to

establish its LF, unless

3. Next

preceding activity is a burst activity; select

the smallest LS of all its immediate successor activities to establish its LF

CPM Example
LS and LF Times
2

a, 6 0 6 3 9 b, 8 0 8 0 8 c, 5 0 5 7 12

f, 15 6 21 9 24 g, 17 6 23 6 10 27 d, 13 8 21 8 21 e, 9 5 14 12 21

i, 6 23 29 27 33

h, 9 21 30 24 33

j, 12
7

21 33 21 33

Activity-on-Arc Network Fundamentals Activity-on Slack or Float

 

SL

Forward & Backward Passes Computed Possible to determine which activities can be delayed by computing Slack or Float LS LF ES = SL EF = SL

  

Total Slack: tells us the amount of time an activity can be delayed; not delay project

CPM Example
SLACK
a, 6 3 0 6 3 9 b, 8 0 0 8 0 8 c, 5 0 5 7 7 12 f, 15 3 6 21 9 24 2 g, 17 6 4 6 23 10 27 d, 13 8 21 0 8 21 e, 9 5 14 7 12 21
5

i, 6 23 29 4 27 33

h, 9 3 21 30 24 33

j, 12 21 33 0 21 33

CRITICAL PATH
a, 6

CPM Example
f, 15
2 5

g, 17
6

h, 9 i, 6
8

b, 8
3

d, 13

j, 12
7

c, 5 e, 9
4

CPM Example
Critical Path: 1 3 7 8

Activities on the Critical Path: b d j Total Project Time: 8+13+12 = 33

PRACTICE QUESTION
Network Information Country Engineers Design Department
ACTIVITY
A B C D E F G H

DESCRIPTION
Application Approval Construction Plans Traffic Study Service Availability Check Staff Report Commission Approval Wait for Construction Occupancy

PROCEDING ACTIVITY
None A A A B,C B,C,D F E,G

ACTIVITY TIME (Duration)

5 15 10 5 15 10 170 35

Program/Project Evaluation & Review Technique (PERT)



The technique is based on the that an activity s duration probability distribution instead single value. value. The probabilistic information activities is translated into information about the project. project.

assumption follows a of being a about the probabilistic

PERT
Three time estimates are required to compute the parameters of an activity s duration distribution:


Pessimistic Time (tp ) - the longest time that an activity might require. require. Three standard deviations from the mean is commonly used for the pessimistic time. Most Likely Time (tm ) - the completion time having the highest probability. Note that this time is different from the expected time probability. Optimistic Time (to ) - generally the shortest time in which the activity can be completed. It is common practice to specify optimistic times to be three completed. standard deviations from the mean so that there is approximately a 1% chance that the activity will be completed within the optimistic time.

BETA PROBABILITY DISTRIBUTION WITH THREE TIME ESTIMATES

PERT
PERT assumes a beta probability distribution for the time estimates. estimates. For a beta distribution, the expected time and variance for each activity can be: be: Expected time = ( Optimistic + 4 x Most likely + Pessimistic ) / 6 te = ( to + 4tm + tp ) / 6 Variance = [ (Pessimistic Optimistic) / 6 ] 2 Vt = [ ( tp - to ) / 6 ] 2

PERT : EXAMPLE
Immed. Immed. Optimistic Most Likely Pessimistic Predec. (Hr.) Time (Hr.) Activity Predec. Time (Hr.) Time (Hr.) A -4 6 8 B -1 4.5 5 C A 3 3 3 D A 4 5 6 E A 0.5 1 1.5 F B,C 3 4 5 G B,C 1 1.5 5 H E,F 5 6 7 I E,F 2 5 8 J D,H 2.5 2.75 4.5 K G,I 3 5 7

PERT : EXAMPLE
PERT NETWORK
D

C B F G I K

PERT : EXAMPLE
Activity A B C D E F G H I J K Expected Time 6 4 3 5 1 4 2 6 5 3 5 Variance 4/9 4/9 0 1/9 1/36 1/9 4/9 1/9 1 1/9 4/9

SOLUTION
EARLIEST/LATEST TIMES:
Activity A B C D E F G H I J K ES 0 0 6 6 6 9 9 13 13 19 18 EF 6 4 9 11 7 13 11 19 18 22 23 LS 0 5 6 15 12 9 16 14 13 20 18 LF 6 9 9 20 13 13 18 20 18 23 23 Slack 0 *critical 5 0* 9 6 0* 7 1 0* 1 0*

PERT : EXAMPLE
Activities on the Critical Path: A C F I K Total Project Time: 6+3+4+5+5 = 23

PERT : EXAMPLE
Activity A B C D E F G H I J K Expected Time 6 4 3 5 1 4 2 6 5 3 5 Variance 4/9* 4/9 0* 1/9 1/36 1/9* 4/9 1/9 1* 1/9 4/9*

PERT : EXAMPLE
Probability the project will be completed within 24 hours Vpath = VA + VC + VF + VI + VK = 4/9 + 0 + 1/9 + 1 + 4/9 = 2 Wpath = 1.414 Expected Time = EA + EC + EF + EI + EK =6+ 3 +4 +5 +5 = 23
What is the probability that the project will be completed within the 24 hours?

z = (24 - 23)/W!(24-23)/1.414 = .71 23)/W!(24-

PERT : EXAMPLE


Probability the project will be completed within 24 hours

.2612 .5000

23

24

From the Standard Normal Distribution table: P(z < .71) = .5 + .2612 = .7612

PRACTICE QUESTION
A medical institute is planning to hold an annual conference on eradication of cancer. In order to coordinate the project, it was decided to use PERT network. The major activities and time estimates a, m, and b for each activity are carefully computed and gives as follows.
Activities A B C D E F G Predecessors a A A A B, C D 2 10 8 10 7 9 3 Estimates m 4 12 9 15 7.5 9 3.5 b 12 26 10 20 11 9 7

H E, F, G 5 5 5 1) Draw the PERT diagram for the project. 2) Compute Expected Time and Variance for each activity. 3) Compute ES, EF, LS, LF and Slack time.
4) Identify the critical path and find its length and variance. 5) What is the probability that the project will be completed within 30 days?

QUESTIONS