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Project Management
Lecture 27
Dr. Arshad Zaheer
Source: CASE material and online sources
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Recap What is a Project Project Management Modern Tools and Techniques Project Selection Models Project Life Cycle Project manager and functional manager Project organizations Benefits of Project management Causes of failure of projects
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Outline PERT and CPM Framework of PERT/CPM Terminology Drawing Network Diagrams Calculation of expected time Identification of critical path Gantt charts, Resource loading and leveling Work Breakdown Structures Linear Responsibility Charts
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PERT AND CPM
• RERT (program evaluation and review technique) and CPM (critical path method) are two of the most widely used techniques for planning and coordinating large scale projects.
• By using PERT or CPM managers are able to obtain:– A graphical display of the project activities– An estimate of how long the project will take– An indication of which activities are most critical– An indication of how long an activity can be delayed
without lengthening the project
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The framework of PERT and CPM
• For proceeding with PERT/CPM following common six points have to be followed:– Define the project with significant activities or tasks– Develop relationship among the activities– Draw network connecting all activities– Assign time and/or cost estimates to each activity– Compute the critical path– Use network to help plan, schedule, monitor and
control the project
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Terminology• PERT: A technique for planning, scheduling and
controlling the activities
• Activity: A specific or set of tasks required by the project. Actions taken to accomplish a task are called activities which consumes time and other organizational sources. Activities are represented by arrows.
• Event: Outcome of one or more activities. The starting and ending point of an activity is called event. It is a statement of accomplished task from where another activity starts. Events are represented by circles called nodes.
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Terminology
• Network: Combination of all activities and events. A systematic diagram showing the logical sequence and interrelationships between events and activities.
• Path: Series of connected activities or events
• Critical path: Longest – Critical path is the path which has longest total duration of the project. Any delay would delay the project
• Slack/float: Allowable slippage for a path
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A simple project network diagram
1
2
3
4
5 6
Locate facilities
Interview
Order furniture
Remodel
Furniture setup
Hire & train
Move in
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Activity relationship
a
b
c
a b
c
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a
b
c
d
a
b
c
Dummy Activity
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Activity Preceding Activity Time
A - 10B - 12C A 11D B 16E C, D 8
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Expected timeExpected time = t = a + 4m + b
6a = Optimistic time: Time taken if every thing progress in an ideal manner with nothing going wrongm = Most probable time: This is most likely activity time under the normal conditionsb = This is the pessimistic time if there are abnormal conditions for any significant breakdown or delay
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ActivityImmediate
Predecessors
Time Estimates (Week)
Optimistic Most Probable Pessimistic
A - 4 5 12
B - 1 1.5 5
C A 2 3 4
D A 3 4 11
E A 2 3 4
F C 1.5 2 2.5
G D 1.5 3 4.5
H B, E 5 3.5 5
I H 1.5 2 2.5
J F, G, I 1 2 3
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ActivityImmediate Predecessor
Time Estimates (Week)
Expected time = t =(a + 4m + b)/6
A - 6B - 2
C A 3D A 5
E A 3F C 2
G D 3H B, E 4
I H 2J F, G, I 2
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2 5
71 4 8
3 6
Routing(C)
ProductDesign
(A)
MarketResearch
Plan(B)
Prototype(D)
MarketingBrochure
(E)
CostEstimates
(F)Testing
(G)
MarketSurvey
(H)
Pricingand
Forecast(I)
FinalReport
(J)
COMPLETION
Activity list for the Daugherty Porta-Vac Project
Activity Description ImmediatePredecessors
A R&D product design -B Plan market research -C Routing (manufacturing engineering) AD Build prototype model AE Prepare marketing brochure AF Cost estimates (industrial engineering) CG Preliminary product testing DH Market survey B, EI Pricing and forecast report HJ Final report F, G, I
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2
4 51
3
(A) (B)
(C) (D)
(E)
Activity List for a Two-Machine Maintenance Project
Activity Description Expected Time (in days)
A Overhaul machine I 7
B Adjust machine I 3
C Overhaul machine II 6
D Adjust machine II 3
E Test system 2
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PERT DiagramActivity Preceding Activity
A --B --C --D AE AF CG CH E, B, FI E, B, FJ D, HK G, I, J
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2
4 61
3
E
5
B
C
G
J
K7
H
I
A
D
F
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Activities of a projectActivity Predecessor Activity
a -
b -
c -
d a
e b,c
f b,c
g b,c
h c
I g,h
j d,e
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•
Network Diagram
1
2
4
3
6
5
7
a
b
c
d
ef
g
h
i
j
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Make a Network Diagram
Activity Time (days)
Preceding Activity
A 6 -- B 2 -- C 2 -- D 3 -- E 8 A F 5 B, E G 9 C, F, D H 3 -- I 2 P, H J 3 B, E K 10 G L 1 D M 10 I, J, K N 3 L, Q O 5 M, N P 4 A Q 5 G
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1
3
4
2
6 7
5 8
9
10
11
A,6
H, 3
B, 2
C, 2
D, 3
L, 1
Q, 5
G, 9N, 3
K, 10
J, 3
I, 2
O, 5
Dum1
P, 4M, 10
E, 8
F, 5
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Resource loading describes the amount of individual resource an existing schedule requires during specific time periods. The PERT/CPM network technique is well suited for the job of
generating time-phased resource requirements.
Resource Loading
Resource Leveling
Resource leveling aims to minimize the period-by-period variations in resource lading by shifting tasks within their
slack allowances.
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The Work Breakdown Structure & Linear Responsibility Charts
Pictures a project subdivided into hierarchical units of task,
subtasks, work packages, etc.
The project management software actually creates WBSs
automatically, given that the action plans have been input.
WBSs are usually in the form of outlines with the first level
tasks at the left, and successive levels appropriately indented.
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230XZ3Robot
(10.00.00)
Electronics(12.00.00)
Contractadmin.
(13.00.00)
Install. &service
(15.00.00)
Manufatrg.(14.00.00)
Systemsdesign
(11.00.00)
Syst.engr.
(11.01.00)
Prof.test
(11.02.00)
Equip.(12.01.00)
Sftwr.(12.03.00)
Prod.cntrl.
Mfg.engr.
PersonnelDataSite
prep.Logistics
Cntrl(12.02.00)
Vrtl.(12.02.01)
Elbow(12.02.02)
Wrist(12.02.03)
Engrs.(12.02.04)
Trans.(12.02.05)
Work Breakdown Structure(account numbers shown)
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Cont. It may illustrate:
How each project contributes to the whole in terms performance,
responsibility, budget, schedule.
List the vendors and sub contractors associated with specific
tasks.
Documentation of that all parties have signed-off on their various
commitments to the projects.
Any specifications for any work package, establish account
numbers, specify hardware/software to be used, and identify
resource needs.
The basis for making cost estimates.
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Procedure for designing and using the WBS
1. Using information from the action plan, list the task
breakdown in successively finer levels of detail. Continue
until all meaningful tasks or work packages have been
identified and each task can be individually planned,
budgeted, scheduled, monitored, and controlled.
2. For each work package, identify the data relevant to the
WBS. List the personnel and organizations responsible for
each task.
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Cont.
It is helpful to construct a linear responsibility chart
(sometimes called a responsibility matrix) to show who is
responsible for what. This chart also shows critical interfaces
between units that may require special managerial
coordination. With it, the PM can keep track of who must
approve what and who must report to whom.
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Linear Responsibility Chart
Legend: Responsible Support Notification Approval
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Subproject Task
Project
Manager
Contract
Admin.
Project
Eng.
Industrial
Eng.
Determine
Need
A1
A2
Solicit
Quotations B1
Write Approp.
Request C1
C2
C3
“
“
“
“
“
“
WBS
Responsibility
Project Office Field Oper.
Field Manager
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Simplified Linear Responsibility Chart
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Vice-p
residen
t
Gen
eral man
ag
er
Pro
ject m
ana
ger
Man
ag
er en
gin
eering
Man
ag
er softw
are
Man
ag
er man
frg
Man
ag
er mrktg
Su
bp
rog
ram
man
ager m
afrg
Su
bp
rog
ram
Man
ag
er softw
are
Su
bp
rog
ram
Man
ag
er hard
ware
Su
bp
rog
ram
Man
ag
er services
Establish project plan 6 2 1 3 3 3 3 4 4 4 4
Define WBS 5 1 3 3 3 3 3 3 3 3
Establish hardware specs 2 3 1 4 4 4
Establish software specs 2 3 4 1 4
Establish interface specs 2 3 1 4 4 4
Establish manufacturing specs 2 3 4 4 1 4
Define documentation 2 1 4 4 4 4
1 Actual responsibility, 2 General supervision, 3 Must be consulted, 4 May be consulted, 5 Must be noted, 6 Final Approach
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Vice-p
residen
t
Gen
eral man
ag
er
Pro
ject m
ana
ger
Man
ag
er en
gin
eering
Man
ag
er softw
are
Man
ag
er man
frg
Man
ag
er mrktg
Su
bp
rog
ram
man
ager m
afrg
Su
bp
rog
ram
Man
ag
er softw
are
Su
bp
rog
ram
Man
ag
er hard
ware
Su
bp
rog
ram
Man
ag
er services
Establish project plan 6 2 1 3 3 3 3 4 4 4 4
Define WBS 5 1 3 3 3 3 3 3 3 3
Establish hardware specs 2 3 1 4 4 4
Establish software specs 2 3 4 1 4
Establish interface specs 2 3 1 4 4 4
Establish manufacturing specs 2 3 4 4 1 4
Define documentation 2 1 4 4 4 4
1 Actual responsibility, 2 General supervision, 3 Must be consulted, 4 May be consulted, 5 Must be noted, 6 Final Approach
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Verbal Responsibility Chart
Legend:IA, ILI, IHI: Product linesLOB: Line of businessMC: Management committeeM-A Cttee: Marketing administration committeeS&S: Sales and serviceMP&R: Marketing planning and research
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Clear Action withActivities
Responsible Individuals
Work withInitiate Action
Distribution System
And its Administration1. Recommend distribution
system to be used.
Mktg Officer
Mktg Officer
Mktg Officer
LIL & IHI LOB
MCs
M-A Cttee
VP & Agcy Dir
Group LOB MC
M-A Cttee
VP & Agcy Dir
IA LOB MC
M-A Cttee
VP & Agcy Dir
Sr VP Mktg
Sr VP Mktg
Sr VP Mktg
Compensation2. Determine provisions of
sales compensation programs
(e.g., commissions, subsidies, fringes).
3. Ensure cost-effectiveness
testing of sales compensation
programs.
Compensation
Task Force
Compensation
Task Force
Compensation
Task Force
Compensation
Task Force
Mktg, S&S &
Eqty Prod Offrs
Mktg, S&S &
Eqty Prod Offrs
Mktg, S&S &
Eqty Prod Offrs
Mktg, S&S &
Eqty Prod Offrs
President
President
President
Territory4. Establish territorial strategy
for our primary distribution
system.
VP & Agcy Dir Dir MP&R
M-A Cttee
Sr VP Mktg
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Clear Action withActivities
Responsible Individuals
Work withInitiate Action
Territory5. Determine territories for
agency locations and establish
priorities for standing.
6. Determine agencies in
Which advanced sales personnel
Are to operate.
VP & Agcy Dir
Dir Ret Pln
Sls
Dir Adv Sls
Dir MP&R
M-A Cttee
VP S&S
Sr VP Mktg
Sr VP Mktg