managing projects chapter 10. what is a project? a project has a unique purpose a project is...
TRANSCRIPT
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Managing Projects
Chapter 10
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What is a Project?
A project has a unique purpose A project is temporary A project requires resources A project should have a primary sponsor or
customer A project involves uncertainty
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What is Project Management?
The application of knowledge, skills, tools, and techniques to project activities in order to meet project requirements
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Benefits of Project Management
Better coordination among functional areas Ensure that tasks are completed even when there
is personnel turnover Minimize the need for continuous reporting Identification of realistic time limits Early identification of problems Improved estimating capability Easier to monitor success
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Measures of Project Success
Completed on-time Completed within budget Delivery of required specifications Acceptance by customer Minimum number of scope changes (change
orders)
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What do Project Manager do?
Manage the people and resources necessary to meet scope, time, cost, and quality goals Reinforce excitement in the project Manage conflict Empower team members Encourage risk taking and creativity
Communicate the progress of the team with managers and customers
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Building the Project Team
Forming Storming Norming Performing
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Quantitative Tools
Gantt Charts Project Network Diagram
PERT uses AON (Activity on Node) methodology Many software programs (i.e., MS Project) use
boxes and arrows to display activities
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Quantitative Analyses
Constructing PERT diagrams and analyzing the critical path
Developing cost-time trade-off slopes Incorporating uncertainty into activity times
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Constructing PERT DiagramsBaking a Cake ExampleActivity Code Immediate
Predecessor
Duration (minutes)
Preheat oven A - 1.0
Measure ingredients B A 8.0
Mix ingredients for frosting C B 5.0
Mix ingredients for cake D B 5.0
Pour batter into cake pan E D 1.0
Bake F E 30.0
Cool cake G C, F 60.0
Frost cake H G 5.0
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PERT
A1 B8
C5
D5 E1 F30
G60 H5
Note:* Notation represents the activity code and the expected duration (t)* Critical Path = A-B-D-E-F-G-H = 110 minutes
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Notation for Critical Path Analysis
Item Symbol Definition
Activity duration t The expected duration of an activity
Early start ES The earliest time an activity can begin if all previous activities are begun at their earliest times
Early finish EF The earliest time an activity can be completed if it is started at its early start time
Late start LS The latest time an activity can begin without delaying the completion of the project
Late finish LF The latest time an activity can be completed if it is started at its latest start time
Total slack TS The amount of time an activity can be delayed without delaying the completion of the project
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PERT
A1 B8
C5
D5 E1 F30
G60 H5
ES = 0EF = 0+1=1
ES = 1EF = 1+8=9
ES = 9EF = 9+5=14
ES = 9EF = 9+5=14
ES = 14EF = 15
ES = 15EF = 45
ES = 45 (larger of 45, 14)EF = 105
ES = 105EF = 110
Begin at 1st activity andmake ES = 0
ES = EFpredecessor (if more than 1 EFpredecessor then use the largest value)EF = ES + t
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PERT
A1 B8
C5
D5 E1 F30
G60 H5
LS = 0LF = 1
LS = 1LF = 9 (smaller of 40, 9)
LS = 40LF = 45
LS = 9LF = 14
LS = 14LF = 15
LS = 15LF = 45
LS = (105-60)=45LF = LSsuccessor=105
LS = (LF-t) =(110-5)=105LF = EF = 110
Begin at last activity andmake LF=EF = 110
LF = LSsuccessor (If more than 1 LF = LSsuccessor then use the smallest value)LS = LF-t
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PERTActivity ES EF LS LF TS
A 0 1 0 1 0
B 1 9 1 9 0
C 9 14 40 45 31
D 9 14 9 14 0
E 14 15 14 15 0
F 15 45 15 45 0
G 45 105 45 105 0
H 105 110 105 110 0
Total Slack (TS) = LS-ES or LF-EF
Activities that have zero slack are critical, meaning they cannot be delayed without delaying the project completion time
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Gantt Chart
See either: Demonstration in MS Project Hardcopy distributed in class
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Project Network Diagram(produced by MS Project)
See either: Demonstration in MS Project Hardcopy distributed in class
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Tennis Tournament ExampleActivity Code Immediate Predecessor Estimated
Duration (days)
Negotiate for location A - 2
Contact seeded players B - 8
Plan promotion C A 3
Locate officials D C 2
Send RSVP invitations E C 10
Sign player contracts F B,C 4
Purchase balls and trophies G D 4
Negotiate catering H E,F 1
Prepare location I E,G 3
Tournament J H,I 2
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Tennis Tournament ExamplePERT
Possible paths: A-C-D-G-I-J (16), A-C-F-H-J (12), A-C-E-I-J (20), A-C-E-H-J (18), B-F-H-J (15)Critical path = A-C-E-I-J (20)
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Tennis Tournament ExamplePERT
Activity ES EF LS LF TS
A
B
C
D
E
F
G
H
I
J
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Gantt Chart
See either: Demonstration in MS Project Figure 10.8 in textbook
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Project Network Diagram(produced by MS Project)
See either: Demonstration in MS Project Figure 10.9 in textbook
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Trades-OffsCost and Time
Cost and time are inversely related
As time to complete a project goes down, costs for the project go up
As time goes up, costs go down
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Project Costs
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Activity Crashing
An activity is considered to be “crashed” when it is completed in less time than is normal by applying additional labor or equipment
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Determining the Impact of Activity Crashing
To determine the impact of activity crashing begin by identifying the Expedite-Cost Slope for each activity
To do this, a manager must identify “normal” and “crash” time and cost estimates
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Tennis Tournament ExampleCost and Time Estimates
8201212J
210823I
-101011H
110934G
715834F
54020610E
6171112D
3131023C
4302268B
1015512A
Slope ($/day)CrashNormalCrashNormalCode
Expedite-Cost*Direct Costs ($)Time Estimate (Days)
8201212J
210823I
-101011H
110934G
715834F
54020610E
6171112D
3131023C
4302268B
1015512A
Slope ($/day)CrashNormalCrashNormalCode
Expedite-Cost*Direct Costs ($)Time Estimate (Days)
*Slope = Crash Cost – Regular Cost (15 – 5) = 10 = 10 Normal Duration – Crash Duration (2 – 1) 1
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Activity Cost-Time Trade-off(Activity Code E)
Activity E: Normal Time = 10, Crash Time = 6, Normal Cost = $20, Crash Cost = $40)
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Incorporating Uncertainty into Activity Times
When a manager is unsure of the activity duration times, he/she needs to estimate activity times using a Beta distribution
The Beta distribution allows the manager to develop a probable range of times in which the activity time will fall
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Beta Distribution of Activity Duration
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Beta Distribution Time Estimates
Optimistic Time (A) – activity duration if no problems occur
Most Likely Time (M) – activity duration that is most likely to occur
Pessimistic Time (B) – activity duration if extraordinary problems arise
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Formulas
Activity time (t) = (A + 4M + B)/6 Standard deviation (σ) = (B - A)/6 Variance (σ2) = (B – A)2/36
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Assessing ProbabilityTennis Tournament Example
Let’s say we plan to begin the tennis tournament project on October 25th and plan to have it completed within 24 days (November 18th) because the tennis stadium is booked after that.
As a manager, you have estimated the optimistic, most likely, and pessimistic times for each activity
Now you want to find the probability that you will be able to finish the project in 24 days
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Time Estimates Tennis Tournament Example
Time Estimates
Activity A M B t σ σ2
A 1 2 3 2.00 0.33 0.11
B 5 8 11 8.00 1.00 1.00
C 2 3 4 3.00 0.33 0.11
D 1 2 3 2.00 0.33 0.11
E 6 9 18 10.00 2.00 4.00
F 2 4 6 4.00 0.67 0.44
G 1 3 11 4.00 1.67 2.78
H 1 1 1 1.00 0.00 0.00
I 2 2 8 3.00 1.00 1.00
J 2 2 2 2.00 0.00 0.00
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Time Estimates – Critical Path Tennis Tournament Example
Time Estimates Activity A M B t σ σ2 A 1 2 3 2.00 0.33 0.11 B 5 8 11 8.00 1.00 1.00 C 2 3 4 3.00 0.33 0.11 D 1 2 3 2.00 0.33 0.11 E 6 9 18 10.00 2.00 4.00 F 2 4 6 4.00 0.67 0.44 G 1 3 11 4.00 1.67 2.78 H 1 1 1 1.00 0.00 0.00 I 2 2 8 3.00 1.00 1.00 J 2 2 2 2.00 0.00 0.00
∑t = 2.00 + 3.00 + 10.00 + 3.00 + 2.00 = 20 days∑σ2 = 0.11 + 0.11 + 4.00 + 1.00 + 0.00 = 5.22 days∑σ = 0.33 + 0.33 + 2.00 + 1.00 + 0.00 = 3.66
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Building Time DistributionTennis Tournament Example
Z = (X – μ)/σ
Z = (24 – 20)/√5.22
Z = 1.75
Z Table (p. 579 of textbook) shows that a Z value of 1.75 refers to a probability of (0.5000 – 0.4599)= 0.0401 or .04
Therefore, there is a 4% probability that the project would not be completed in 24 days
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