6. Project Management

Project A set of partially ordered, interrelated activities

that must be completed to achieve a goal

Project Management Decision-making, choosing between alternatives,

managing activities as a part of the project Planning

goal setting, project definition, team organization Scheduling

relating people, money, and supplies to specific activities and activities to one and other

Controlling monitoring resources, costs, and quality; revising plans

and shifting resources to meet time and cost demands

Role of Project Manager All necessary activities are finished in order

and on time The project comes in within budget The project meets quality goals The people assigned to the project receive

motivation, direction, and information

Project Scheduling Identifying precedence relationships Sequencing activities Determining activity times & costs Estimating material and worker

requirements Determining critical activities

Scheduling Techniques Gantt chart Network models

Critical Path Method (CPM) Program Evaluation and Review Technique

(PERT) Identify the longest time-consuming path

through a network of activities required to complete a project

Gantt Chart: Service for a Delta Jet

Passengers

Baggage

Fueling

Cargo and mail

Galley servicing

Lavatory servicingDrinking water

Cabin cleaning

Cargo and mail

Flight services

Operating crewBaggagePassengers

DeplaningBaggage claimContainer offloadPumpingEngine injection waterContainer offloadMain cabin doorAft cabin doorAft, center, forwardLoadingFirst-class sectionEconomy sectionContainer/bulk loadingGalley/cabin checkReceive passengersAircraft checkLoadingBoarding

00 1515 3030 4545 6060MinutesMinutes

Key Terms for Network Models Forward pass

To compute the earliest start (ES) and finish (EF) times for each activity

Backward pass To compute the latest start (LS) and finish (LF)

times for each activity without delaying the completion of the entire project

Slack The length of time an activity can be delayed

without delaying the entire project LS-ES or LF-EF

Key Terms for Network Models

A

Activity Name or Symbol

Earliest Start ES

Earliest FinishEF

Latest Start

LS Latest Finish

LF

Activity Duration

2

Key Terms for Network Models Critical path

Zero slack for every activity on the path The longest path through the network The shortest time in which the project can be

completed Any delay in critical path activities delays the

project There may be several critical paths

Network Examples

A B C A

C

B

B

A

C

A

B

C

D

A

B

C

D

A

C

DB

CPM and PERT Procedures Develop relationships among the activities -

decide which activities must precede and which must follow others

Draw the network connecting all of the activities

Assign time and/or cost estimates to each activity

Compute the longest time path through the network – this is called the critical path

Use the network to help plan, schedule, monitor, and control the project

CPM Example

Activity DescriptionImmediate

PredecessorsTime

(Weeks)

A Build internal components — 2

B Modify roof and floor — 3

C Construct collection stack A 2

D Pour concrete and install frame A, B 4

E Build high-temperature burner C 4

F Install pollution control system C 3

G Install air pollution device D, E 5

H Inspect and test F, G 2

Continued

G

E

F

H

CA

Start

DB

Continued

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

13 15

10 13

8 13

4 8

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

42

84

20

41

00

PERT PERT uses a probability distribution for

activity times to allow for variability while CPM assumes fixed time estimate

PERT uses two or three time estimates for each activity a: optimistic time, b: pessimistic time, m: most

likely time Uniform distribution approximation

expected time = (a+b)/2, variance = (b–a)2/12 Beta distribution approximation t = (a+4m+b)/6, v = (b–a)2/36

PERT Example

Activity a m b t v

A 1 2 3 2.11B 2 3 4 3

.11C 1 2 3 2

.11D 2 4 6 4

.44E 1 4 7 4

1.00F 1 2 9 3

1.78G 3 4 11 5

1.78H 1 2 3 2

.11

Probability of Project Completion Project variance is computed by summing

variances of critical activities σ2 = .11+.11+1.00+1.78+.11 = 3.11 Total project completion times follow a

normal probability distribution Probability to finish the project within 16

weeks?Pr(T<16) = Pr(Z<(16-15)/1.76)) = Pr(Z<0.57) = 0.716

(Dis)Advantages of CPM/PERT Especially useful for large projects Straightforward concept and not

mathematically complex Graphical networks help to perceive

relationships among project activities Critical path pinpoints activities that need

to be closely watched Time estimates tend to be subjective Too much emphasis on the critical path

Project Crashing Shortening the duration of the project Steps:

Compute the crash cost per time period Identify the critical path and activities Select an activity on the critical path that can

be crashed with the smallest crash cost Repeat until the desired due date is reached

An Example

Time (Wks) Cost ($) Crash Cost CriticalActivity Normal Crash Normal Crash Per Wk ($) Path?

A 2 1 22,000 22,750 750 YesB 3 1 30,000 34,000 2,000 NoC 2 1 26,000 27,000 1,000 YesD 4 2 48,000 49,000 1,000 NoE 4 2 56,000 58,000 1,000 YesF 3 2 30,000 30,500 500 NoG 5 2 80,000 84,500 1,500 YesH 2 1 16,000 19,000 3,000 Yes

Video Case Study Develop the network for planning and

construction of the new hospital at Arnold Palmer.

What is the critical path and how long is the project expected to take?

Why is the construction of this 11-story building any more complex than construction of an equivalent office building?

What percent of the whole project duration was spent in planning that occurred prior to the proposal and reviews? Prior to the actual building construction? Why?