© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Chapter 6 Project Management

© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e

Chapter 6

Project Management

2000 by Prentice-Hall, Inc 2

A Project is

Unique One-time operation Containing an interrelated set of unique

activities Has a definite starting and end point Is designed to accomplish a specific set of

objectives In a limited time frame


Project management

The planning, directing, and control of resources (people, equipment, and material) to meet the technical and cost constraints of the project


Examples:

Constructing a shopping complex Installing a new computer system Developing a new space shuttle Introducing a new product or service into

the marketplace Redesigning the layout of a plant or office

2000 by Prentice-Hall, Inc 5Ch 17 - 3© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Project Planning

Statement of work written description of goals, work & time

frame of project Activities require labor, resources & time Precedence relationship shows sequential

relationship of project activities



Simplified Project Network

1 32Construct forms Pour concrete



Elements Of Project Planning

Define project objective(s) Identify activities Establish precedence relationships Make time estimates Determine project completion time Compare project schedule objectives Determine resource requirements to meet

objective



Gantt Chart

Popular tool for project scheduling Graph with bar for representing the time

for each task Provides visual display of project

schedule Also shows slack for activities

(amount of time activity can be delayed without delaying project)

2000 by Prentice-Hall, Inc 9Ch 17 - 8© 2000by Prentice-Hall Inc


20 4 106 8

31 5 7 9Month

Month

Activity

Design house andobtain financing

Lay foundation

Order and receivematerials

Build house

Select paint

Select carpet

Finish work

A Gantt Chart



CPM/PERT

Critical Path Method (CPM) DuPont & Remington-Rand (1956) deterministic task times

Project Evaluation & Review Technique (PERT)

US Navy, Booz, Allen & Hamilton multiple task time estimates



The Project Network

Network consists of branches & nodes

1 32

Branch

Node



Project Network For A House

1 2 4 6 7

3

5

32

0

1

31

1

1

Lay foundation

Design house and obtain financing

Order and receive materials

Dummy

Finish work

Select carpet

Select paint

Build house



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



Concurrent Activities

4

3

2

DummyLay foundation

2 3

Lay foundation

Order materialOrder material

Incorrect precedence relationship

Correct precedence relationship



Early Times(Housebuilding example)

ES - earliest time activity can start Forward pass starts at beginning of

CPM/PERT network to determine ES times

EF = ES + activity time



Late Times

LS - latest time activity can start & not delay project

Backward pass starts at end of CPM/PERT network to determine LS times

LS = LF - activity time



Activity Slack

Activities on critical path have ES=LS & EF=LF

Activities not on critical path have slack

Sij = LSij - ESij

Sij = LFij - EFij



Probabilistic Time Estimates

Reflect uncertainty of activity times Beta distribution is used in PERT

b - a6

( )Variance: 2 =

a = optimistic estimatem = most likely time estimateb = pessimistic time estimate

Where,

2

Mean (expected time): a + 4m + b6

t =



Project Variance

Project variance is the sum of variances on the critical path



Probabilistic Network Analysis

Determine probability that project is completed within specified time

where

= tp = project mean time = project standard deviationx = proposed project timeZ = number of standard deviations x is from mean

Z = x -



Normal Distribution Of Project Time

= tp Timex

Z

Probability

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© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Chapter 6 Project Management