Project Management
Chapter 13
OPS 370
Projects
Project Management
• Five Phases
1. Initiation
2. Planning
3. Execution
4. Control
5. Closure
Project Initiation
Project Planning
• A. Creation of a Number of Planning Documents:
– Project Plan
• Activities, Interdependencies, Time Estimates
– Resource Plan
• What Resources Are Required
– Financial Plan
• Estimated Costs
– Quality Plans
• Quality Targets, Control and Improvement Techniques
– Communications Plan
• Updates to Stakeholders
– Risk Plan
• Assessment of Risks and Uncertainties
Project Execution
Project Control
Project Closure
Project Management
Tools and Techniques
• Project Management has a Number of Tools
Available:
–
–
–
–
–
Precedence Relationship and Time Estimates
Network Diagram
Critical Path Method (CPM)
Cost and Time Tradeoff Analysis
Program Evaluation and Review Technique
(PERT)
Precedence Relationships
and Time Estimates
• A. Precedence Relationship Analysis:
– a. Identification of Relationships and Sequences of
Activities Within a Project
• B. Take Great Care to Estimate the Completion
Time for Each Activity.
• C. Project Schedule, Cost, and Resource
Requirements  Depend on the Precedence
Relationships and Time Estimates
Network Diagrams
Cables By Us is bringing a new product on line to be manufactured in their
current facility in some existing space. The owners have identified 11
activities and their precedence relationships. Develop an AON for the
project.
Activity
A
B
C
D
E
F
G
H
I
J
K
Description
Develop product specifications
Design manufacturing process
Source & purchase materials
Source & purchase tooling & equipment
Receive & install tooling & equipment
Receive materials
Pilot production run
Evaluate product design
Evaluate process performance
Write documentation report
Transition to manufacturing
Immediate Duration
Predecessor (weeks)
None
4
A
6
A
3
B
6
D
14
C
5
E&F
2
G
2
G
3
H&I
4
J
2
Diagram the Network for Cables By Us
Construct a Network
• Project Information (Different project)
– Activity
A
B
C
D
E
F
G
H
I
J
Immediate Predecessor
--A
A
B
C, D, E
C, D, E
F, G
F, G
H, I
Construct a Network
Critical Path Method
Identifying the Critical Path
Calculate the Path Completion
Times
Paths
ABDEGHJK
ABDEGIJK
ACFGHJK
ACFGIJK
Path duration
40
41
22
23
Some Network Definitions
Project Network
ES, EF Network
LS, LF Network
LF = 10
LS = 4
LF = 16 LF = 30
LS = 10 LS = 16
LF = 4
LS = 0
LF = 35
LS = 33
LF = 32
LS = 30
LF = 25
LS = 22
LF = 30
LS = 25
LF = 39
LS = 35
LF = 35
LS = 32
LF = 41
LS = 39
Completed Network Diagram
Calculating Slack
Activity
A
B
C
D
E
F
G
H
I
J
K
Late
Finish
4
10
25
16
30
30
32
35
35
39
41
Early
Finish
4
10
7
16
30
12
32
34
35
39
41
Slack
[weeks]
0
0
18
0
0
18
0
1
0
0
0
Reducing the Time of a Project (Crashing)
Activity
Normal
Time (wk)
Normal
Cost ($)
Crash
Time
Crash
Cost ($)
Max. weeks Reduce cost
of reduction
per week
A
4
8,000
3
11,000
1
3,000
B
6
30,000
5
35,000
1
5,000
C
3
6,000
3
6,000
0
0
D
6
24,000
4
28,000
2
2,000
E
14
60,000
12
72,000
2
6,000
F
5
5,000
4
6,500
1
1500
G
2
6,000
2
6,000
0
0
H
2
4,000
2
4,000
0
0
I
3
4,000
2
5,000
1
1,000
J
4
4,000
2
6,400
2
1,200
K
2
5,000
2
5,000
0
0
Crash costs are assumed to be linear …
Reducing the Time of a Project (crashing)
Activity
Normal
Time (wk)
Normal
Cost ($)
Crash
Time
Crash
Cost ($)
Max. weeks Reduce cost
of reduction
per week
A
4
8,000
3
11,000
1
3,000
B
6
30,000
5
35,000
1
5,000
C
3
6,000
3
6,000
0
0
D
6
24,000
4
28,000
2
2,000
E
14
60,000
12
72,000
2
6,000
F
5
5,000
4
6,500
1
1500
G
2
6,000
2
6,000
0
0
H
2
4,000
2
4,000
0
0
I
3
4,000
2
5,000
1
1,000
J
4
4,000
2
6,400
2
1,200
K
2
5,000
2
5,000
0
0
Crashing Example: Suppose the Cables By Us project
manager wants to reduce the new product project from
41 to 36 weeks.
Crashed Network Diagram
PERT
• A. Program Evaluation and Review Technique: Addresses
the Impact of Uncertainties in Activity Time Estimates on the
Duration of the Entire Project
• B. Different Estimates for Activity Times are Developed:
PERT
PERT
Example
Activity
A
B
C
D
E
F
G
H
I
J
K
to
1
2
1
3
2
12
4
3
2
3
2
tm
2
3
2
4
2
16
8
5
3
4
2
tp
6
3
4
6
4
25
10
6
4
4
6
te
s2
Example
Activity
A
B
C
D
E
F
G
H
I
J
K
to
1
2
1
3
2
12
4
3
2
3
2
tm
2
3
2
4
2
16
8
5
3
4
2
tp
6
3
4
6
4
25
10
6
4
4
6
1  4* 2  6
6
te
2.50
2.83
2.17
4.17
2.33
16.83
7.67
4.83
3.00
3.83
2.67
s2
0.69
0.03
0.25
0.25
0.11
4.69
1.00
0.25
0.11
0.03
0.44
 6 1 


6


2
Example
• 1. Longest Path (Using Expected Activity
Times)
– A. BCDFGK  Length of 36.3 (Variance of 6.67)
– B. Standard Deviation = Sqrt(6.67) = 2.58
• 2. Can Now Answer Questions
Example
• 1. Continued
– A. With 95% Probability, What Is the Date the
Project Can Be Expected to Be Completed?