3
Project Management
PowerPoint presentation to accompany
Heizer and Render
Operations Management, 10e
Principles of Operations Management, 8e
PowerPoint slides by Jeff Heyl
Outline

Project Management Overview

Project Planning, Scheduling, and Control

Project Organization

Project Management Techniques: PERT and CPM



Determining the Project Schedule




Activity-on-Node Example
Activity-on-Arrow Example
Forward Pass
Backward Pass
Calculating Slack Time and Identifying the Critical Path(s)
Project Crashing
2
Learning Objectives
1. Use a Gantt chart for scheduling
2. Draw an AON network
3. Complete forward and backward passes
for a project
4. Determine a critical path
5. Calculate slack
6. Project crashing
3
Bechtel Projects
 Building 26 massive distribution centers in just
two years for the internet company Webvan
Group ($1 billion)
 Constructing 30 high-security data centers
worldwide for Equinix, Inc. ($1.2 billion)
 Building and running a rail line between London
and the Channel Tunnel ($4.6 billion)
 Developing an oil pipeline from the Caspian Sea
region to Russia ($850 million)
 Expanding the Dubai Airport in the UAE ($600
million), and the Miami Airport in Florida ($2
billion)
4
Project Characteristics
 Single unit
 Many related activities
 Difficult production planning and
inventory control
 General purpose equipment
 High labor skills
5
Project Management
Activities
 Planning
 Objectives
 Scheduling
 Resources
 Project activities
 Work break-down
structure
 Start & end times
 Network
 Organization
 Controlling
 Monitor, compare, revise, action
6
Project Planning,
Scheduling, and Controlling
Figure 3.1
Before
project
Start of project
Timeline
During
project
7
Project Planning,
Scheduling, and Controlling
Figure 3.1
Before
project
Start of project
Timeline
During
project
8
Project Planning,
Scheduling, and Controlling
Figure 3.1
Before
project
Start of project
Timeline
During
project
9
Project Planning,
Scheduling, and Controlling
Figure 3.1
Before
project
Start of project
Timeline
During
project
10
estimates
Project Time/cost
Planning,
Budgets
Scheduling, and
Controlling
Engineering
diagrams
Cash flow charts
Material availability details
Budgets
Delayed activities report
Slack activities report
CPM/PERT
Gantt charts
Milestone charts
Cash flow schedules
Figure 3.1
Before
project
Start of project
Timeline
During
project
11
The Role of
the Project Manager
Highly visible
Responsible for making
sure that:
Project managers should be:
 Goodare
coaches
1. All necessary activities
finished in order
and on time
 Good communicators
2. The project comes
in within
budget activities
 Able
to organize
a variety
3. The project meets from
quality
goals of disciplines
4. The people assigned to the project receive
motivation, direction, and information
12
Ethical Issues
 Project managers face many ethical
decisions on a daily basis
 The Project Management Institute has
established an ethical code to deal with
problems such as:
1. Offers of gifts from contractors
2. Pressure to alter status reports to mask delays
3. False reports for charges of time and expenses
4. Pressure to compromise quality to meet
schedules
13
Work Breakdown Structure
Level
1. Project
2.
3.
4.
Major tasks in the project
Subtasks in the major tasks
Activities (or work packages)
to be completed
14
Work Breakdown Structure
Develop Windows 7
Operating System
Level 1
Level 2
Software
Design
1.1
Level 3
Develop
GUIs
1.1.1
Ensure Compatibility
with Earlier Versions
Level 4
Project
Management
1.1.2
Compatible with
Windows ME
1.1.2.1
Compatible with
Windows Vista
1.1.2.2
Compatible with
Windows XP
1.1.2.3
Planning
Cost/Schedule
Management
1.0
1.2
System
Testing
1.3
1.2.1
Module
Testing
1.3.1
Defect
Testing
1.3.2
1.2.2
(Work packages)
Figure 3.3
15
Project Scheduling
 Identifying precedence
relationships
 Sequencing activities
 Determining activity
times & costs
 Estimating material &
worker requirements
 Determining critical
activities
16
Project Management
Techniques
 Gantt chart
 Critical Path Method
(CPM)
 Program Evaluation
and Review
Technique (PERT)
17
A Simple Gantt Chart
J
F
M
Time
A M J
J
A
S
Design
Prototype
Test
Revise
Production
18
Service For a Delta Jet
Passengers
Baggage
Fueling
Cargo and mail
Galley servicing
Lavatory servicing
Drinking water
Cabin cleaning
Cargo and mail
Flight services
Operating crew
Baggage
Passengers
Deplaning
Baggage claim
Container offload
Pumping
Engine injection water
Container offload
Main cabin door
Aft cabin door
Aft, center, forward
Loading
First-class section
Economy section
Container/bulk loading
Galley/cabin check
Receive passengers
Aircraft check
Loading
Boarding
0
Figure 3.4
10
20
30
Time, Minutes
40
19
PERT and CPM
 Network techniques
 Developed in 1950’s
 CPM by DuPont for chemical plants (1957)
 PERT by Booz, Allen & Hamilton with the
U.S. Navy, for Polaris missile (1958)
 Consider precedence relationships and
interdependencies
 Each uses a different estimate of
activity times
20
Six Steps PERT & CPM
1. Define the project and prepare the
work breakdown structure
2. Develop relationships among the
activities - decide which activities
must precede and which must
follow others
3. Draw the network connecting all of
the activities
21
Six Steps PERT & CPM
4. Assign time and/or cost estimates
to each activity
5. Compute the longest time path
through the network – this is called
the critical path
6. Use the network to help plan,
schedule, monitor, and control the
project
22
A Comparison of AON and
AOA Network Conventions
Activity on
Node (AON)
(a) A
C
B
A
(b)
C
B
B
(c)
A
C
Activity
Meaning
A comes before
B, which comes
before C.
A and B must both
be completed
before C can start.
B and C cannot
begin until A is
completed.
Activity on
Arrow (AOA)
A
B
C
A
B
C
B
A
Figure 3.5
C
23
A Comparison of AON and
AOA Network Conventions
Activity on
Node (AON)
A
C
B
D
(d)
A
C
(e)
B
D
Activity
Meaning
C and D cannot
begin until both
A and B are
completed.
C cannot begin
until both A and B
are completed; D
cannot begin until
B is completed. A
dummy activity is
introduced in AOA.
Activity on
Arrow (AOA)
A
C
B
D
A
C
Dummy activity
B
Figure 3.5
D
24
A Comparison of AON and
AOA Network Conventions
Activity on
Node (AON)
A
B
(f)
C
D
Activity
Meaning
B and C cannot
begin until A is
completed. D
cannot begin
until both B and
C are completed.
A dummy
activity is again
introduced in
AOA.
Activity on
Arrow (AOA)
A
Dummy
activity
Figure 3.5
B
D
C
25
AON Example
Milwaukee Paper Manufacturing's
Activities and Predecessors
Activity
A
Description
Build internal components
Immediate
Predecessors
—
B
Modify roof and floor
—
C
Construct collection stack
A
D
Pour concrete and install frame
A, B
E
Build high-temperature burner
C
F
Install pollution control system
C
G
Install air pollution device
D, E
H
Inspect and test
F, G
Table 3.1
26
AON Network for
Milwaukee Paper
A
Activity A
(Build Internal Components)
B
Activity B
(Modify Roof and Floor)
Start
Start
Activity
Figure 3.6
27
AON Network for
Milwaukee Paper
Activity A Precedes Activity C
A
C
B
D
Start
Activities A and B
Precede Activity D
Figure 3.7
28
AON Network for
Milwaukee Paper
F
A
C
E
Start
H
B
D
G
Arrows Show Precedence
Relationships
Figure 3.8
29
AOA Network for
Milwaukee Paper
2
C
4
(Construct
Stack)
Dummy
Activity
1
3
D
5
(Pour
Concrete/
Install Frame)
6
H
(Inspect/
Test)
7
Figure 3.9
30
Determining the Project
Schedule
Perform a Critical Path Analysis
 The critical path is the longest path
through the network
 The critical path is the shortest time in
which the project can be completed
 Any delay in critical path activities
delays the project
 Critical path activities have no slack
time
31
Determining the Project
Schedule
Perform a Critical Path Analysis
Activity
A
B
C
D
E
F
G
H
Description
Time (weeks)
Build internal components
2
Modify roof and floor
3
Construct collection stack
2
Pour concrete and install frame
4
Build high-temperature burner
4
Install pollution control system
3
Install air pollution device
5
Inspect and test
2
Total Time (weeks)
25
Table 3.2
32
Determining the Project
Schedule
Perform a Critical Path Analysis
Earliest start (ES) = earliest time at which an activity can
Activity Description
Time (weeks)
start, assuming all predecessors
have
A
Build internal
components
2
been completed
Modify
roof and
floor
3
EarliestBfinish (EF)
= earliest
time
at which an activity can
be finished
C
Construct
collection stack
2
D start (LS)
Pour=concrete
and
4
Latest
latest time
at install
which frame
an activity can
start so as to not delay
E
Build high-temperature
burnerthe completion
4
of thecontrol
entire project
F
Install time
pollution
system
3
LatestGfinish (LF)
= latest
time bydevice
which an activity has
Install
air pollution
5 to
be finished so as to not delay the
H
Inspect and test
2
completion time of the entire project
Total Time (weeks)
25
Table 3.2
33
Determining the Project
Schedule
Perform a Critical Path Analysis
Activity Name
or Symbol
A
Earliest
Start
ES
EF
Latest
Start
LS
LF
Figure 3.10
2
Earliest
Finish
Latest
Finish
Activity Duration
34
Forward Pass
Begin at starting event and work forward
Earliest Start Time Rule:
 If an activity has only a single immediate predecessor, its ES
equals the EF of the predecessor
 If an activity has multiple immediate predecessors, its ES is
the maximum of all the EF values of its predecessors
ES = Max {EF of all immediate predecessors}
Earliest Finish Time Rule:
EF = ES + Activity time
35
ES/EF Network for
Milwaukee Paper
ES
EF = ES + Activity time
Start
0
0
0
36
ES/EF Network for
Milwaukee Paper
EF of A =
ES of A + 2
ES
of A
0
Start
0
A
0
2
0
2
37
ES/EF Network for
Milwaukee Paper
0
A
2
0
Start
0
0
2
EF of B =
ES of B + 3
ES
of B
B
0
3
3
38
ES/EF Network for
Milwaukee Paper
0
A
2
2
0
Start
2
C
4
2
0
0
0
B
3
3
39
ES/EF Network for
Milwaukee Paper
0
A
2
2
0
Start
2
C
4
2
0
= Max (2, 3)
0
D
3
0
B
3
7
3
4
40
ES/EF Network for
Milwaukee Paper
0
A
2
2
2
0
Start
C
4
2
0
0
0
B
3
3
3
D
7
4
41
ES/EF Network for
Milwaukee Paper
0
A
2
2
2
0
Start
C
4
4
2
F
7
3
0
4
0
E
8
13
4
0
B
3
3
3
D
4
7
H
15
2
G
8
13
5
Figure 3.11
42
Backward Pass
Begin with the last event and work backwards
Latest Finish Time Rule:
 If an activity is an immediate predecessor for just a single
activity, its LF equals the LS of the activity that immediately
follows it
 If an activity is an immediate predecessor to more than one
activity, its LF is the minimum of all LS values of all activities
that immediately follow it
LF = Min {LS of all immediate following activities}
Latest Start Time Rule:
LS = LF – Activity time
43
LS/LF Times for
Milwaukee Paper
0
A
2
2
2
0
Start
C
4
4
2
F
7
3
0
4
0
E
8
13
13
4
0
B
3
3
H
2
15
15
LS = LF
D – Activity time
G
3
7
4
8
13
5
LF = EF
of Project
44
LS/LF Times for
Milwaukee Paper
0
A
2
2
2
0
Start
C
4
4
10
2
F
3
7
13
E
0
8 of
LF =4 Min(LS
following activity)
0
13
13
4
0
B
3
3
3
D
4
7
H
2
15
15
G
8
13
5
45
LS/LF Times for
LF = Min(4, 10)
Milwaukee Paper
0
A
2
2
2
0
Start
2
C
2
4
4
4
10
0
4
4
0
0
B
3
3
3
D
4
7
E
4
F
3
7
13
8
13
8
13
H
2
15
15
G
8
13
8
13
5
46
LS/LF Times for
Milwaukee Paper
0
0
0
0
Start
0
A
2
2
2
2
2
C
2
4
4
4
10
0
4
0
4
0
1
B
3
3
3
4
4
D
4
E
4
F
3
7
13
8
13
8
13
H
2
15
15
G
7
8
13
8
8
13
5
47
Computing Slack Time
After computing the ES, EF, LS, and LF times
for all activities, compute the slack or free
time for each activity
 Slack is the length of time an activity can
be delayed without delaying the entire
project
Slack = LS – ES
or
Slack = LF – EF
48
Computing Slack Time
Earliest Earliest
Start
Finish
Activity
ES
EF
A
B
C
D
E
F
G
H
0
0
2
3
4
4
8
13
2
3
4
7
8
7
13
15
Latest
Start
LS
Latest
Finish
LF
Slack
LS – ES
On
Critical
Path
0
1
2
4
4
10
8
13
2
4
4
8
8
13
13
15
0
1
0
1
0
6
0
0
Yes
No
Yes
No
Yes
No
Yes
Yes
Table 3.3
49
Critical Path for
Milwaukee Paper
0
0
0
0
Start
0
A
2
2
2
2
2
C
2
4
4
4
10
0
4
0
4
0
1
B
3
3
3
4
4
D
4
E
4
F
3
7
13
8
13
8
13
H
2
15
15
G
7
8
13
8
8
13
5
50
ES – EF Gantt Chart
for Milwaukee Paper
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16
A Build internal
components
B Modify roof and floor
C Construct collection
stack
D Pour concrete and
install frame
E Build hightemperature burner
F Install pollution
control system
G Install air pollution
device
H Inspect and test
51
LS – LF Gantt Chart
for Milwaukee Paper
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16
A Build internal
components
B Modify roof and floor
C Construct collection
stack
D Pour concrete and
install frame
E Build hightemperature burner
F Install pollution
control system
G Install air pollution
device
H Inspect and test
52
What Project Management
Has Provided So Far
1. The project’s expected completion time
is 15 weeks
2. Five activities (A, C, E, G, and H) are on
the critical path
3. Three activities (B, D, F) are not on the
critical path and have slack time
4. A detailed schedule is available
53
Trade-Offs and Project
Crashing
It is not uncommon to face the
following situations:
 The project is behind schedule
 The completion time has been
moved forward
Shortening the duration of the
project is called project crashing
54
Factors to Consider When
Crashing a Project
 The amount by which an activity is
crashed is, in fact, permissible
 Taken together, the shortened
activity durations will enable us to
finish the project by the due date
 The total cost of crashing is as
small as possible
In-Class Problems from the
Lecture Guide Practice Problems
Problem 1:
The following represent activities in a major construction project.
Draw the network to represent this project.
Activity
Immediate Predecessor
A
-
B
-
C
A
D
B
E
B
F
C, E
G
D
H
F, G
56