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Project Management Project

series of related jobs usually directed toward some major output and requiring a significant period of time to perform.

Project Management planning, directing, and controlling

resources (people, equipment, material) to meet the technical, cost, and time constraints of the project.

Project or Program?

Project Management

Managementof Projects

Functional Structure

Pure ProjectStructure

Matrix Structure

Project Development

Time Cost Models

Inferences about duration

Identify the Critical Path

Find Activity Variance

Find Expected Activity Times

Three Time EstimateSingle Time Estimate

Early Start Schedule

Late Start Schedule

Activity Slack

Work Breakdown Structure

Gantt Chart

Critical Path Scheduling

Network Diagram

Identify the Critical Path

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Work Breakdown Structure

ProgramLevel

Project 1 Project 21

Task 1.12 Task 1.2

Subtask 1.1.13 Subtask 1.1.2

Work Package 1.1.1.14 Work Package 1.1.1.2

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Work Breakdown Structure Requirements

Elements may be worked on independently

Elements are manageable in size

Program can be monitored and measured

The required resources are provided

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Organizational Structure:Pure Project--Advantages

The project manager has full authority over the project

Team members report to one boss

Shortened communication lines

Team pride, motivation, and commitment are high

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Organizational Structure:Pure Project--Disadvantages

Duplication of resources

Organizational goals and policies are ignored (also an advantage!)

Lack of technology transfer

Team members have no functional area "home"

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Functional Project

President

Research andDevelopment

Engineering Manufacturing

ProjectA

ProjectB

ProjectC

ProjectA

ProjectB

ProjectC

ProjectA

ProjectB

ProjectC

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Organizational Structure:Functional Project--Advantages

A team member can work on several projects

Technical expertise is maintained within the functional area

The functional area is a home after the project is completed

Critical mass of specialized knowledge

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Organizational Structure:Functional Project--Disadvantages

Aspects of the project that are not directly related to the functional area get short-changed

Motivation of team members is often weak

Needs of the client are secondary and are responded to slowly

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Matrix ProjectPresident

Research andDevelopment

Engineering Manufacturing Marketing

ManagerProject A

ManagerProject B

ManagerProject C

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Organizational Structure:Matrix--Advantages

Enhanced inter-functional communications

Pinpointed responsibility

Duplication of resources is minimized

Functional home for team members

Policies of the parent organization are followed (also a disadvantage!)

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Organizational Structure:Matrix--Disadvantages

Two bosses

Depends on Project Manager’s negotiating skills

Less flexibility for “pure project”

Potential for sub-optimization

Project Management

Managementof Projects

Project Development

Three Time EstimateSingle Time Estimate

Early Start Schedule

Late Start Schedule

Activity Slack

Work Breakdown Structure

Gannt Chart

Critical Path Scheduling

Network Diagram

Identify the Critical Path

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Network-Planning Models

A project is made up of a sequence of activities that form a network representing a project.

The path taking longest time through this network of activities is called the “critical path.”

The critical path provides a wide range of scheduling information useful in managing a project.

Critical Path Method (CPM) helps to identify the critical path(s) in the project networks.

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Critical Path Scheduling:PERT and CPM

CPM (critical path method) J. E. Kelly of Remington-Rand and M. R.

Walker of Du Pont (1957) Scheduling maintenance shutdowns of

chemical processing plants

PERT (program evaluation & review technique) U.S. Navy Special Projects Office (1958) Polaris missile project

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Critical Path Scheduling

A project must have:

well-defined jobs or tasks whose completion marks the end of the project;

independent jobs or tasks;

and tasks that follow a given sequence.

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CPM with Single Time Estimate

Consider the following consulting project:

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

Activity Designation Immed. Pred. Time (Weeks)Assess customer's needs A None 2Write and submit proposal B A 1Obtain approval C B 1Develop service vision and goals D C 2Train employees E C 5Quality improvement pilot groups F D, E 5Write assessment report G F 1

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First draw the network

A, 2 B, 1 C, 1

D, 2

E, 5

F, 5 G, 1

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Gannt Chart

Activity

Assess customer's needs A

Write and submit proposal B

Obtain approval C

Develop service vision and goals D

Train employees E

Quality improvement pilot groups F

Write assessment report G| | | | | | | | | | | | | | | |1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16Week

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Determine early start and early finish times

ES=0EF=2

ES=2EF=3

ES=3EF=4

ES=4EF=9

ES=4EF=6

?A, 2 B, 1 C, 1

D, 2

E, 5

F, 5 G, 1

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When I can start depends on when predecessors finish

ES=9EF=14

ES=14EF=15

ES=0EF=2

ES=2EF=3

ES=3EF=4

ES=4EF=9

ES=4EF=6

A, 2 B, 1 C, 1

D, 2

E, 5

F, 5 G, 1

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Determine late starts and late finish times

ES=9EF=14

ES=14EF=15

ES=0EF=2

ES=2EF=3

ES=3EF=4

ES=4EF=9

ES=4EF=6

A, 2 B, 1 C, 1

D, 2

E, 5

F, 5 G, 1

LS=14LF=15

LS=9LF=14

LS=4LF=9

LS=7LF=9

?

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Don’t delay the project

ES=9EF=14

ES=14EF=15

ES=0EF=2

ES=2EF=3

ES=3EF=4

ES=4EF=9

ES=4EF=6

A, 2 B, 1 C, 1

D, 2

E, 5

F, 5 G, 1

LS=14LF=15

LS=9LF=14

LS=4LF=9

LS=7LF=9

LS=3LF=4

LS=2LF=3

LS=0LF=2

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Critical Path & Slack

ES=9EF=14

ES=14EF=15

ES=0EF=2

ES=2EF=3

ES=3EF=4

ES=4EF=9

ES=4EF=6

A, 2 B, 1 C, 1

D, 2

E, 5

F, 5 G, 1

LS=14LF=15

LS=9LF=14

LS=4LF=9

LS=7LF=9

LS=3LF=4

LS=2LF=3

LS=0LF=2

Duration = 15 weeks

Slack=(7-4)=(9-6)= 3 Wks

Project Management

Managementof Projects

Project Development

Inferences about duration

Identify the Critical Path

Find Activity Variance

Find Expected Activity Times

Three Time EstimateSingle Time Estimate

Work Breakdown Structure

Gannt Chart

Critical Path Scheduling

Network Diagram

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CPM with Three Activity Time Estimates

TaskImmediate

Predecesors Optimistic Most Likely PessimisticA None 3 6 15B None 2 4 14C A 6 12 30D A 2 5 8E C 5 11 17F D 3 6 15G B 3 9 27H E,F 1 4 7I G,H 4 19 28

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Expected Times

TaskImmediate

PredecesorsExpected

TimeA None 7B None 5.333C A 14D A 5E C 11F D 7G B 11H E,F 4I G,H 18

Expected Time = Opt. Time + 4(Most Likely Time) + Pess. Time

6

A, 7

B5.333

C, 14

D, 5

E, 11

F, 7

H, 4

G, 11

I, 18

Duration = 54 Days

54 Days

41 Days

34.3 Days

What is the probability of finishing this project in less than 53 days?

tTE = 54

p(t < D)

D=53

Z = D - TE

cp2

Activity variance, = (Pessim. - Optim.

6)2 2

(Sum the variance along the critical path.) 2 = 41

Task Optimistic Most Likely Pessimistic VarianceA 3 6 15 4B 2 4 14C 6 12 30 16D 2 5 8E 5 11 17 4F 3 6 15G 3 9 27H 1 4 7 1I 4 19 28 16

Z = D - T

=53- 54

41= -.156E

cp2

tTE = 54

D=53

p(t < D)

p(Z < -.156) = .5 - .0636 = .436, or 43.6 % (Appendix D)

There is a 43.6% probability that this project will be completed in less than 53 weeks.

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Exercise: What is the probability that the project duration will exceed 56 weeks?

tTE = 54

p(t < D)

D=56

Z = D - T

=56 - 54

41= .312E

cp2

p(Z > .312) = .5 - .1217 = .378, or 37.8 % (Appendix D)

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Problem 5 - What is the probability of completing the project in less that 16 days?

Immediate ExpectedActivity Predecessors a m b Time VarianceA -- 1 3 5B -- 1 2 3C A 1 2 3D A 2 3 4E B 3 4 11F C, D 3 4 5G D, E 1 4 6H F, G 2 4 5

Time Estimates

Project Management

Project Development

Time Cost Models

Inferences about duration

Identify the Critical Path

Find Activity Variance

Find Expected Activity Times

Three Time EstimateSingle Time Estimate

Early Start Schedule

Late Start Schedule

Activity Slack

Work Breakdown Structure

Gannt Chart

Critical Path Scheduling

Network Diagram

Identify the Critical Path

Functional Structure

Pure ProjectStructure

Matrix Structure

Managementof Projects

Irwin/McGraw-Hill

Time-Cost Models

Basic Assumption: Relationship between activity completion time and project cost

Time Cost Models: Determine the optimum point in time-cost tradeoffs Activity direct costs Project indirect costs Activity completion times

Problem – Crashing a Project

C

B

F

E

D

A G

5Weeks

4

7

8

10

6

4

Activity NormalTime

NormalCost

CrashTime

CrashCost

A 5 $ 7,000 3 $13,000B 10 12,000 7 18,000C 8 5,000 7 7,000D 6 4,000 5 5,000E 7 3,000 6 6,000F 4 6,000 3 7,000G 4 7,000 3 9,000