BUAD306 Chapter 17 Project Management. Life is a Project You are already a project manager!...

BUAD306

Chapter 17 – Project Management

Life is a Project

You are already a project manager!Fraternity/sorority projectsSport-related activitiesFamily eventsWork-related projects

Types of Projects

CorporateMergers, systems conversions,

relocations, new business ventures, new products, start—ups…

DepartmentQuality improvement, work-flow

modifications, new technology/ equipment, automation, new products…

Project Plan

The roadmap for your project Designates who does what, when, where Shows sequence of activities and

schedule of when they occur Analyzed regularly (daily) to identify

issues and gauge timeliness of project

Conveying the “why” is critical to the Project manager’s job!

Gantt Charts

Visual display of project tasksSpecific tasksTimeframe to completeSequenceAssignments of Responsibility

Pros/ConsSimple, easy to createDoesn’t show interdependencies

Gantt Chart

WK1 WK2 WK3 WK4 WK5 WK6 WK7 WK8 WK9 WK10

Paint

Develop Floor Plan

Buy Furniture, etc.

Hang fixtures

Install lighting

Arrange Furniture

Display Inventory

Open Store

Gantt Chart

PERT and CPM

PERT – Program Evaluation and Review Technique

CPM – Critical Path Method Together, Project Managers can do the

following: See a graphical display of activities Estimate length of project Identify tasks most critical to completion Determine how long any activity can be

delayed without delaying the project

Network Diagram

1 32

Branch

Network consists of branches & nodes

Node

Predecessor Activity

Network Conventions (AOA)

a

b

c ab

c

a

b

c

d

a

b

c

Dummyactivity

Project Network

1

2

3

4

5 6

Paint

Hang Fixtures

Display Inventory/Goods

Develop Floor Plan

Buy Furniture

Install Lighting

Arrange Furniture

Critical Path

A path is a sequence of connected activities running from start to end node in network

The critical path is the path with the longest duration in the network

Project cannot be completed in less than the time of the critical path

Find the Critical Path

1

2

3

4

5 6

4 weeks

3 weeks

3 weeks

2 weeks9 weeks

5 weeks

2 weeks

Slack

Represents time available for getting a path completed as compared to the critical path

is the “wiggle room” you have on that path

Example 1

A B C

E FD

G

H

Act Time

A 4

B 1

C 6

D 5

E 2

F 4

G 2

H 1

Example 2

A B

C

E F

D

G H

Act Time Crash $

A 2 5000

B 3 2000

C 1 --

D 5 3000

E 6 6000

F 3 8000

G 2 1000

H 1 --

*Max you can crash any activity is one week*For each week crashed, can earn $2500

Expediting Your Project?

Why?Save $Make $Improve customer satisfactionGovernment requirements

Crashing

Use of additional resources, which typically cost money, to shorten the original length of the overall project

Conditions:Activity crashed must be on the critical

path(s)Benefit of crashing must outweigh the

cost of crashing

Should We Crash?

1

2

3

4

5 6

4 weeks

3 weeks

3 weeks

2 weeks9 weeks

5 weeks

2 weeks

$500/week; maximum = 3

$500/week; maximum = 1

Can earn $700 for each week opened early

Should We Crash?

1

2

3

4

5 6

4 weeks

3 weeks

3 weeks

2 weeks9 weeks

5 weeks

2 weeks

$500/week; maximum = 3

What if $100/week; maximum = 1

Can earn $700 for each week opened early

Example 2 – Part 2

A B

C

E F

D

G H

Act Time Crash $

A 2 5000

B 3 2000

C 1 --

D 5 3000

E 6 6000

F 3 8000

G 2 1000

H 1 --

*Max you can crash any activity is one week*For each week crashed, can earn $2500

Example 3

A B C

E

F

D

G

H

Act Time Crash $

A 4 4000

B 3 2000

C 1 --

D 1 3000

E 4 2500

F 5 3000

G 2 1000

H 4 1000

I 3 1000

J 1 --

*Max you can crash any activity is one week*For each week crashed, can earn $2000

I

J

Handout #1:

Given the project diagram below and the table of info:

1)Calculate the critical path and slacks2)If the company wants to shorten the project by 3 weeks and spend no more than $5,000, is it possible? Assume no task can be crashed more than twice. Explain3)Using original data: if activity D is delayed by 5 weeks, is there a delay in the entire project? If so, by how much?

A B

C

D

E F

G

H

Activ TimeCrash

$A 4 $2000

B 2 --

C 11 $2000

D 9 $1500

E 1 --

F 7 $2000

G 4 $500

H 1 --

Handout #2:

Given the project diagram below and the table of info:

1)Calculate the critical path and slacks2)The company has crash costs as shown (costs are listed for 1st week crash and 2nd week. If no cost shown, it cannot be crashed). The company would like to crash the project by 4 weeks. How much will it cost to do this and what tasks will be crashed and by how much?

A

C

B

D

E

F

G

H

Activ TimeCrash $ - 1

Crash $ - 2

A 2 -- --

B 5 $500 $1000

C 3 $200 --

D 2 -- --

E 4 $400 $800

F 8 $1000 $2000

G 2 -- --

H 5 $800 $1500

I 3 $600 --

J 1 -- --

I J

Handout #2: - ALTERNATIVE!!!!!!!!!!

Given the project diagram below and the table of info:

1)Calculate the critical path and slacks2)The company has crash costs as shown (costs are listed for 1st week crash and 2nd week. If no cost shown, it cannot be crashed). The company would like to crash the project by 4 weeks. How much will it cost to do this and what tasks will be crashed and by how much?

A

C

B

D

E

F

G

H

Activ TimeCrash $ - 1

Crash $ - 2

A 2 -- --

B 5 $500 $1000

C 3 $200 --

D 2 -- --

E 4 $400 $800

F 8 $1000 $2000

G 2 -- --

H 5 $1800 $1500

I 3 $600 --

J 1 -- --

I J

Handout #3:

Given the project diagram below and the table of info:

1)Calculate the critical path and slacks2)If task D were to slip by 4 weeks, would there be a delay in the project? If so, by how much?3)Given the original info, the company must complete the project in 20 weeks or else be fined $2000 for each week beyond 20. Is it possible for the company to complete the project and NOT be fined? If so, how would they do so?

A

C

B

D

E

F

G H

Activ TimeCrash $ (max 1)

A 5 $3000

B 3 $1500

C 4 $1500

D 1 --

E 3 $3200

F 6 $2000

G 3 --

H 3 $800

I 1 --

I

Microsoft Project

Powerful business tool Easily entry and organization of

project tasks PERT/CPM flexibility Standard project communications Custom reporting

Risk Management

Types of RisksProject Risks – overall projectTask Risks – individual componentsDecision Risks – strategic

Cost Benefit Analysis

Read Text

Key Project Tasks

Project Designation Project Manager Selection Project Team Designation Project Planning Managing Resources/Activities Issues Management Communication Post-Mortem/Analysis

Project Manager

Ultimately responsible for success/failure of project

Manages: work effort, resources, communications, quality, timetables, and costs

Requires strategic management, “juggling” & prioritization skills, etc.

Can be certified (PMI)

Project Management Issues

Time Considerations Quality Factors Conflicts of Interest Limited Resources Perception within Organization STRESS!