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Managing ProjectProcesses

Characteristics of a ProjectA unique, one-time effortRequires completion of a large number of interrelated activitiesResources, such as time and/or money, are limitedTypically has its own management structure

Critical Path Method (CPM)

Designed to provide intense micro-controlSystem is dynamic; it continues to provide periodic reports as project progresses

Managers View of CPM List of project activities Precedence relationship among activities Estimate of each activitys duration Estimated duration of project Identification of critical activities Amount of slack for each activityCPM processing procedures

CPM TerminologyActivityA task or certain amount of work required in the projectRequires time to completeRepresented by an arc (AOA) or a node (AON)Dummy activity (AOA only)Indicates only precedence relationshipsDoes not require any time of effort

CPM TerminologyNetworkShows sequential relationships among activities using nodes and arrows

CPM TerminologyPathConnected sequence of activities leading from starting event to ending eventCritical pathLongest path (time); determines project durationCritical activitiesAll of the activities that make up critical path

CPM TerminologyEarliest start (ES)Earliest that an activity can begin; assumes all preceding activities have been completedEarliest finish (EF)ES + activity timeLatest finish (LF)Latest that an activity can finish and not change project completion timeLatest start (LS)LF - activity time

Steps in CPM AnalysisDraw the CPM networkA graphic view of relationships among required activitiesPath analysisDetermine length of each path (time required to complete each path)Longest path is the critical path

Steps in CPM AnalysisNetwork analysisWorking from left to right, find the EF and ES for each activityWorking from right to left, find LF and LS for each activityCompute activitys slackTotal Slack = LS - ES = LF - EF This slack is shared with other activitiesFree slackTime an activity may be delayed without impacting the ES of successor activities

St. Adolfs Hospital

St. Adolfs Hospital

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalCompletion Time

St. Adolfs HospitalEarliest StartandEarliest Finish Times

St. Adolfs HospitalEarliest StartandEarliest Finish Times

St. Adolfs HospitalEarliest StartandEarliest Finish Times

St. Adolfs HospitalEarliest StartandEarliest Finish Times

St. Adolfs HospitalEarliest StartandEarliest Finish Times

St. Adolfs HospitalEarliest StartandEarliest Finish Times

St. Adolfs HospitalEarliest StartandEarliest Finish Times

St. Adolfs HospitalEarliest StartandEarliest Finish Times

St. Adolfs HospitalEarliest StartandEarliest Finish Times

St. Adolfs HospitalLatest StartandLatest Finish Times

St. Adolfs HospitalLatest StartandLatest Finish Times

St. Adolfs HospitalLatest StartandLatest Finish Times

St. Adolfs HospitalLatest StartandLatest Finish Times

St. Adolfs HospitalLatest StartandLatest Finish Times

St. Adolfs HospitalLatest StartandLatest Finish Times

St. Adolfs HospitalLatest StartandLatest Finish Times

St. Adolfs HospitalGantt Charts

St. Adolfs HospitalActivity Slack Analysis

St. Adolfs HospitalActivity Slack Analysis

St. Adolfs HospitalActivity Slack Analysis

St. Adolfs HospitalActivity Slack AnalysisK

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St. Adolfs HospitalActivity Slack Analysis

St. Adolfs HospitalActivity Slack Analysis

St. Adolfs HospitalActivity Slack Analysis

St. Adolfs HospitalActivity Slack Analysis

St. Adolfs HospitalCritical Path

St. Adolfs HospitalCritical Path

St. Adolfs HospitalActivity Slack

Program Evaluation andReview Technique (PERT)PERT is based on assumption that an activitys duration follows a probability distribution instead of being a single value.Probabilistic information about activities is translated into probabilistic information about project.

PERTThree time estimates are required to compute parameters of an activitys duration distribution:Pessimistic time (b ) - time activity would take if things did not go wellMost likely time (m ) - consensus best estimate of activitys durationOptimistic time (a ) - time activity would take if things did go well

Steps in PERT AnalysisDraw network as in CPMAnalyze paths through network and find critical pathLength of critical path is mean of project duration probability distributionassumed to be normal (really beta)50% probability the project will be completed in this amount of time

Steps in PERT AnalysisStandard deviation of project duration is computed by adding variances of critical activities (all activities that make up critical path) and taking square root of that sumProbability computations can now be made using normal distribution table

Calculating Probabilistic Activity TimesThree time estimatesoptimistic (a)most likely (m)pessimistic (b)

a, m, and b Estimates

PERT Example

QuestionWhat is the probability of completing the project within 23 weeks?

Look up z value in normal distribution table see page 457 in text

Z=1.52 corresponds to area under the curve of .9357

Probability project completes within 23 days equals .9357

Probability project completes takes longer than 23 days equals .0643 (1.0 - .9357)

Project Life Cycle

Activity Cost-Time TradeoffsProject managers may have option or requirement to crash project, or accelerate completion of project.This is accomplished by reducing length of critical path(s).Length of critical path is reduced by reducing duration of activities on critical path.

Cost-Time TradeoffsIf each activity requires expenditure of an amount of money to reduce its duration by one unit of time, then project manager selects least cost critical activity, reduces it by one time unit, and traces that change through remainder of network.

Cost-Time TradeoffsAs a result of a reduction in an activitys time, a new critical path may be created.When there is more than one critical path, each of the critical paths must be reduced.If length of project needs to be reduced further, process is repeated.

Computer Software for Project ManagementArtemis Views (Artemis Management Systems)FastTrack Schedule (AEC Software)Microsoft Project (Microsoft Corp.)Oracle Projects (Oracle Corp.)PowerProject (ASTA Development)Primavera Project Planner (Primavera Systems)SuperProject (Computer Associates International)TurboProject (IMSI)

Evaluation of CPM/PERTActivities are assumed to be independent.A precise breaking point where one activity ends and another begins is also assumed.Initially-critical activities might not receive attention they deserve until it is too late.Activity time estimates might be biased.Cost of CPM/PERT might not be justified by value of information it provides.Employees might not understand statistical underpinnings of PERT.

1This presentation covers Chapter 3 - Managing Project Processes. The graphic is based on the example used through the Chapter.10The first step is to create the list of activities and the required predecessors.1112Then a network can be drawn. In fact, this step is not strictly necessary for management purposes and large projects are very difficult to represent in this fashion. But it is helpful to visualize this small project in this way. This series builds Figure 3.1.

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39393939393939393939393939The next three slides show the analysis completion times for each path through the network. 39The B-D-H-J-K path is the longest, therefore critical ,path.3945We can calculate the earliest possible starting times and earliest possible finishing times for each activity.46474849The calculations must proceed through the network after earlier activities are calculated. For example, activity D can not start until activity B is complete.5051525355In much the same fashion, late start and late finish times can be calculated working backward through the network.

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56575859606161Figure 3.3 is a screen shot from Project showing a Gantt chart for Example 3.2.62Having these sets of times it is possible to analyze slack for the network. This starts the presentation of Example 3.3. The series first shows the manual development of activity slack and then presents the screen shot of the Project output, Figure 3.4.

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686868Using either the ES/LS or EF/LF pairs results in the same analysis.6868This slide advances automatically.

68Completing the analysis for the entire network, these are the results.6869The critical path will be the path with zero slack.6969In estimating optimistic and pessimistic times, formula assumes less than 1% chance that actual time will be outside this range.

What does that mean to the one estimating?

70This is the complete Figure 3.5.