MBA782.Proj.Mgmt.ACAJ8.03.1 Definition of Project Management Work Breakdown Structure Project Control Organizational Structures Critical Path Scheduling

MBA782.Proj.Mgmt.A CAJ8.03.1

• Definition of Project Management

• Work Breakdown Structure

• Project Control

• Organizational Structures

• Critical Path Scheduling– CPM with a Single Time– CPM with Three Activity Time Estimates

Operations Management

Project Management


Project Management

• Project

– series of _______ jobs usually directed toward some

________ output and requiring a ______________ period of time to perform.

• Project Management

– planning, directing, and controlling __________ (people, equipment, material) to meet the technical, cost, and time ______________ of the project.


• Construction of a new building

• Installing a large computer system

• Introducing a new product

• Hosting a business conference

• Moving a department to a new building

• Earning a graduate degree

Project Management

Examples


Work Breakdown Structure

Program

Project 1 Project 2

Task 1.1

Subtask 1.1.1

Work Package 1.1.1.1

Level

1

2

3

4

Task 1.2

Subtask 1.1.2

Work Package 1.1.1.2


Work Breakdown Structure

• Allow the elements to be worked on _______________

• Make them ________________ in size

• Give _____________ to carry out the program

• Monitor and ____________ the program

• Provide the required _____________


Organizational StructurePure Project--Advantages

• The project manager has ______ authority over the project

• Team members report to ______ boss

• Shortened communication lines

• Team pride, motivation, and commitment are _____


Organizational StructurePure Project--Disadvantages

• Duplication of resources

• Organizational goals and policies are ___________

• ______ of technology transfer

• Team members have no functional area ”_______ "


Functional Project

President

Research andDevelopment

Engineering Manufacturing

ProjectA

ProjectB

ProjectC

ProjectA

ProjectB

ProjectC

ProjectA

ProjectB

ProjectC


Organizational StructureFunctional Project--Advantages

• A team member can work on ___________ projects

• Technical expertise is _________________ within the functional area

• The functional area is a ______ after the project is completed

• Critical mass of specialized knowledge


Organizational StructureFunctional Project--Disadvantages

• Aspects of the project that are not directly related to the functional area get ____________________

• Motivation of team members is often __________ .

• Needs of the client are __________________ and are responded to slowly


Matrix Project

President

Research andDevelopment

Engineering Manufacturing Marketing

ManagerProject A

ManagerProject B

ManagerProject C


Organizational StructureMatrix--Advantages

• Enhanced inter-functional communications

• Pinpointed responsibility

• Duplication of resources is _________________

• Functional ________ for team members

• Policies of the parent organization are ______________


Organizational StructureMatrix--Disadvantages

• _______ _________

• Depends on PM’s ___________________ skills

• Potential for sub-optimization


• Program evaluation and review technique (PERT)

– network technique typically used to scheduleR & D projects.

– developed by U.S. Navy Special Projects Office (1958) for the Polaris missile project

– uses ______________ activity time estimates to control time aspects.

– usually illustrated with __________________ (AOA) technique.

Project Management

Network Planning Methods


• Critical Path Method (CPM)

– Network technique typically used to schedule maintenance shutdowns of chemical processing plants

– J. E. Kelly of Remington-Rand and M. R. Walker of Du Pont (1957)

– uses _________________ time estimates to control both time and costs.

– usually illustrated with _________________ (AON) technique

Project Management

Network Planning Methods


• Activity

– the ______________ unit of effort that the project manager can schedule and control

• Precedence Relationship

– a sequencing __________ between related activities.

– it states that one activity cannot start until a preceding activity has been ___________.

Project Management

Network Analysis Terms


• Precedence Diagram

– a network diagram representation of sequencing relationships

• Critical Path

– the sequence of activities that determines the __________ possible time for completing a project

• Crashing

– analyzing time versus cost ___________ for speeding up individual activities in the project

Project Management

Network Analysis Terms


• Describe the project

– activities

– immediate predecessors

– time estimates

• Diagram the network

• Estimate the time of completion

• Analyze the model

Project Management

Steps in Network Planning


• Nodes (circles) and arcs (arrows)

• Activity on Arc

– arcs are _________ and nodes are _______– event oriented - any point at which one or more

activities are to be completed and one or more other activities are to begin

– event consumers no time or resources

• Activity on Node

– nodes are ____________ and arcs show

_____________ relationships

– activity oriented

Network Planning

Diagram the Network


Activity Relationship:

S precedes T, which precedes U.

AOA AON

1 2S

3T

4U

S T U

Network Planning

Diagram the Network



S and T must be completed before U can be started.

AOA AON

S

T

U

1

2

3T

S

4U

Network Planning

Diagram the Network



T and U cannot begin until S has been completed.

AOA AON

T

U

S

3

4

1

T

U2S

Network Planning

Diagram the Network


• Earliest finish time

– the earliest start time _____ the time, t, needed to complete the activity

EF = ES + t

• Earliest start time

– the earliest possible time an activity can begin

without ___________ any precedence restrictions

ES = Max [EF times of all immediately preceding activities]

Network Planning

Estimate Completion Time


• Latest start time

– the latest finish time ________ the time, t, required for the activity

LS = LF - t

• Latest finish time

– the latest time an activity an activity can end without ___________ the overall completion of the project.

LF = Min [LS times for all immediately following activities]

Network Planning



• Forward pass

– determining the ES and EF dates for each activity, and the _____________ possible completion date for the project.

• Backward pass

– determining the LS and LF dates for each activity to ensure that the project ________ the earliest completion date set by the forward pass

Network Planning



• Activity slack (SLACK)

– the maximum time the start of an activity can be ___________ without delaying the entire project

– the critical path is also the sequence of activities with _______ slack.

SLACK = LS - ES = LF - EF

• Critical Path

– the sequence of activities between the start and finish of a project that takes the __________ time to complete

Network Planning



Consider the following pipeline project:

Network Planning

Diagram the Network

Develop a critical path diagram and determine theduration of the critical path and slack times for allactivities ....

Activity DesignationImmediate

PredecessorTime

(weeks)Buy pipe A none 6Dig ditch B none 10Buy hydrants C none 17Lay pipe D A, B 8Install hydrants E C, D 4


Keep the following points in mind when constructing a network diagram:

• Always have _________ and _________ nodes.

• Avoid __________ paths to keep the diagram simple

• Use only one arrow to directly connect any two nodes

• Put activities with no predecessors at the left and

point the arrows from ______ to right.

• Be prepared to _________ the diagram several times before you create a correct and uncluttered diagram

Network Planning

Diagram the Network


Network Planning

Diagram the Network

Start Finish

A

t

ES EF

LS LF


ES, EF, LS, LF, and SLACKs:

Network Planning

Diagram the Network

Activity ES EF LS LF SLACKABCDE

Critical Path: ___________

Completion Time: _______


Project Management


Project Management


• What is the probability that the project will be completed by the deadline?

• Address _________________ cause by labor shortages, weather, supply delays, or accidents.

• Completion time with a set amount of risk

• Use ________________ time estimates to incorporate uncertainty into the network model.

Project Management

Probabilistic Time Estimates


Activity times are stated in terms of three reasonable time estimates:

• _________________ time (a): - shortest time an activity can be completed

• _________________ time (m): - best estimate of average time

• _________________ time (b): - longest time an activity can take

Project Management



• Activity’s mean time (te)

and variance (2) with beta distribution

Project Management


Meanma b Time



Calculating Time Statistics

6

)4( bmate

22

6

ab

e

Activity (a) (m) (b) te 2

A 2 5 14B 6 8 22C 7 15 35D 5 8 11E 3 4 5


If the random variable xi has:

Mean = i

Variance = i2

the total T of n independent observations of xi is

T = x1 + x2 + ... + xn , and is

NORMALLY DISTRIBUTED with

_______ of T = 1 + 2 + ... + n

__________ of T = 12 + 2

2 + ... + n2


Central Limit Theorem Corollary

-3 -2 -1 1 2 3



Path B - D - E Time Estimate

)()()()( EDBBDE tEtEtEtE

2222

EDBBDE

-3 -2 -1 1 2 3

Activity (a) (m) (b) te 2

B 6 8 22 10.00 7.11D 5 8 11 8.00 1.00E 3 4 5 4.00 0.11


Exercise # 1a

What is the probability that the project duration 25 days?

tTE = 22

p(t < D)

D=____

= Z

P ( z _____ ) = ________ , or 85.31 %


Exercise # 1b

What is the probability that the project duration > 25 days?

tTE = 22

p(t < D)

D=25

=T - D

= Z2

cp

E

P ( z > 1.05) = _____ - _________, or 14.69 %


Exercise # 2

What is the probability of finishing this project in 21 days?

tTE = 22

D= ____

=T - D

= Z2

cp

E

p(t < D)

P( z - 0.348) = ___ - ________ = 0.3632, or 36.3 %



All Path Time Estimates

Probability of completion in 25 days or less

Activity (a) (m) (b) t e s 2

A 2 5 14 6.00 4.00B 6 8 22 10.00 7.11C 7 15 35 17.00 21.78D 5 8 11 8.00 1.00E 3 4 5 4.00 0.11

Path E(tp) 2 z P(z Z)B-D-E 22 7.11+1.00+0.11 = 8.22 2.87 1.05 0.8523A-D-E 18 4.00+1.00+0.11 = 5.11 2.26 3.10 0.9990

C-E 21


Probability ofCompleting =Project in25 days or less


Completion in 25 Days or Less

ProbabilityAll Paths< 25 days

)25()25()25()25( CEPADEPBDEPDP

E T p = 2 2

p = 2 .8 7

BDE

10 20 30 40

E T p = 1 8

p = 2 .2 6

ADE

10 20 30 40

E T p = 2 1

p = 4 .0 1

CE

10 20 30 40

D = 25

Path E(t p ) s p z P(z <= Z)B-D-E 22 2.87 1.05 0.8523 A-D-E 18 2.26 3.10 0.9990

C-E 21 4.68 0.85 0.8037


P( C-E 25 days) = ________P( B-D-E 25 days) = ________

• The probability of non-critical path C E being

completed in 25 days or less is ____________ the probability of critical path B D E being completed in 25 days.

• It is possible for the non-critical path to have

_____ likelihood of being completed than the critical path.

• What does this mean?....

Project Management



• Projects will probably be ______ relative to the deterministic critical path

• Network simulation is not worth the additional expense

• Use deterministic time estimates

• Look at path _______________ .

• Intensively manage critical and non-critical activities that are _________ to critical times

Project Management


Schonberger, R.J., “Why Projects are Always Late: A Rationale Based on Manual Simulation of a PERT/CPM Network.” Interfaces, Oct. 1981.


• Activities have a clear beginning and end

– __________ ______ _______

• Sequential relationships can be specified and networked

– ordering may be ________________ (contingencies)

• Focus on the critical path

– not always true - “ _______ ” critical path

• Beta distribution

– 10% error; 5% variance; arriving at “ _____ ” activity time

• Can cost 2 - 5 % of total project cost

– benefit from ___________ scheduling and ___________ project time

Project Management

Cautions on PERT and CPM


• Importance of ________________

– Clearly identifying project ____________________

– Simple and timely progress _____________ system

– good ___________-management practices

• Why do projects _______ ?

– _________________ Planning

– ________ of top management commitment

– _____________ of talented project manager

Project Management

Conclusions


Project Management

Documents

MBA782.Proj.Mgmt.ACAJ8.03.1 Definition of Project Management Work Breakdown Structure Project Control Organizational Structures Critical Path Scheduling