(Final)
Part 2 : Project Planning
Ch.6 : Project Activity and Risk Planning
1.
2.
3.
4.
5.
6.
7.
8.
Purpose
Objectives
Overview
Schedules
Resources
Personnel
Risk management plans
Evaluation methods
Systems Integration
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

Performance
Effectiveness
Cost
The Work Breakdown Structure (WBS) is a key project deliverable that organizes the team's work into
manageable sections. The Project Management Body of Knowledge (PMBOK) defines the work
breakdown structure as a "deliverable oriented hierarchical decomposition of the work to be executed
by the project team." The work breakdown structure visually defines the scope into manageable chunks
that a project team can understand, as each level of the work breakdown structure provides further
definition and detail. Figure 1(below) depicts a sample work breakdown structure with three levels
defined.
The following guidelines should be considered when creating a work breakdown structure:

The top level represents the final deliverable or project

Sub-deliverables contain work packages that are assigned to a organization’s department or unit

All elements of the work breakdown structure don’t need to be defined to the same level

The work package defines the work, duration, and costs for the tasks required to produce the
sub-deliverable

Work packages should not exceed 10 days of duration

Work packages should be independent of other work packages in the work breakdown structure

Work packages are unique and should not be duplicated across the work breakdown structure
Risk Management : Uncertainty is high , Risk management should be built on the results of prior
projects
-Risk management planning
Need to know the risk involved before selecting a project and focus on externalities ( Track and estimate
project survival ).
-Risk identification
Risk is dependent on technology and environmental factors. Also, it also uses cause-effect diagrams,
flow charts, influence charts, SWOT analysis.
-Qualitative risk analysis : To prioritize risks by construct a risk matrix
- Quantitative risk analysis
1.
2.
3.
4.
5.
6.
List ways a project can fail
Evaluate severity
Estimate likelihood
Estimate the inability to detect
Find (RPN = S  L  D)
Consider ways to reduce the S, L, and D for each cause of failure
- Risk response planning
Threats and opportunities
-Risk monitoring and control
-The risk management register


List of categories and key words
Estimates on risk, states of project’s environment, or on project assumptions
Ch7 : Budgeting: Estimating Costs and Risks
Estimating Project Budgets
Material + Labor + Equipment + Capital + Overhead + Profits
=
Bid
Resources + Profits
=
Bid
Types of Budgeting
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-
Top-Down Budgeting : Top managers estimate/decide on the overall budget for the project.
These trickle down through the organization where the estimates are broken down into greater
detail at each lower level.The process continues to the bottom level
Bottom-Up Budgeting : Project is broken down into work packages. Low level managers price
out each work package. Overhead and profits are added to develop the budget
Negotiation
Improving The Process of Cost Estimation
1. Inputs from a lot of areas are required to estimate a project
2. May have a professional cost estimator to do the job
3. Project manager will work closely with cost estimator when planning a project
4. We are primarily interested in estimating direct costs
5. Indirect costs are not a major concern
Ch8 : Scheduling
CPM - Critical Path Method
PERT - Program Evaluation and Review Technique
Activity on Arrow - Arrows represent activities while nodes stand for events
Activity on Node - Nodes stand for events and arrows show precedence
AON
AOA
1.
2.
3.
4.
Begin with START activity
Add activities without precedencies as nodes
Add activities that have those activities as precedencies
Continue
Grantt Chart
-
list out all of the tasks in your project
identify the earliest start date for each task
determine the amount of time you need to accomplish each task
AON
TE 
a  4m  b 
6
 b  a  

 6 
2 
  2
Precedence Diagramming
-
Finish to start
Start to start
Finish to finish
2
-
Start to finish
Ch 9 : Resource Allocation
Slope 
Crash Cost  Normal Cost
Crash Time  Normal Time
slope = cost per day of crashing a project
When slope is negative : indicate the time required for a project is decreased, the cost is increased
1. Focus on the critical path when trying to shorten the duration [resource ready]
2. Select the least expensive way to do it
Ch 10 : Monitoring and Information Systems
–
Time (schedule)
–
Cost (budget)
–
Scope (project performance)
Earned Value Analysis :
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50-50 rule
0-100 percent rule
Critical input use rule
Proportionality rule
CV = EV –AC
CPI = EV/AC
SV = EV –PV
SPI = EV/PV
TV = ST- AT
TPI = ST/AT
CSI = EV*EV/AC*PV
Ch 11 : Project Control
Focus on
1.
-
Scope
Technical problems
Technical difficulties
Quality problems
Client wants changes
Interfunctional complications
Technological breakthroughs
Intrateam conflict
Market changes
2.
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Cost
Difficulties may need more resources
Scope may increase
Initial bid was too low
Reporting was poor
Budget was inadequate
Correction not on time
Input price changed
3.
-
Time
Difficulties took longer than planned to solve
Initial estimates were optimistic
Sequencing was incorrect
Unavailable resources
Preceding tasks were incomplete
Change orders
Governmental regulations were altered
Ch 13 : Project Termination
How to finish the project?
1. Termination by extinction

Extinction occurs in any scenario where the project goes away.When work on a project stops,
some organizational work continues
2. Termination by addition
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Applies to an in-house project
When the project is successful, it is institutionalized
While the project goes away, project personnel and assets are transferred to the new business
3. Termination by integration
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

The most common way to terminate a project
The project comes into the business
That structure absorbs the assets of the project
4. Termination by starvation
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Termination by starvation involves greatly reducing the budget of a project
Used when it is politically dangerous to cancel a project
Bad manners to enquire the status of the project