Operations
5
473.31
Fall 2015
Bruce Duggan
Providence University College
Summary
Want to understand:
• the different organizational structures of projects
• the purpose of a work breakdown structure
• the uses of a critical path
• how projects can be shortened through the use of crashing concepts
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Key Questions
What is project management?
How would you assess a partially
completed project that to date has
spent more than planned but has
accomplished more work than planned?
What are the three ways a project can
be structured within an organization?
Which path is the critical path for a
project? Can there be more than one?
What is the correct hierarchy for:
How can I determine the probability of
completing a project on time when I’m
not sure how long the activities will
take?
• a task
• a program
• a work package
• a project
• a subtask?
If we have to speed up a project, which
activity is the best one to assign more
resources to?
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LO1
Project Management Definitions
A Project is a series of related jobs usually directed toward some major
output and requiring a significant period of time to perform
Project Management refers to the management activities of planning,
directing, and controlling resources (people, equipment, material) to
meet the technical, cost, and time constraints of a project
LO2
Types of Project Organization Structures
Pure Project
• a structure for organizing a project where a self-contained team works fulltime on a project
Functional Project
• a structure where team members are assigned from functional units of the
organization
Matrix Project
• is a structure that blends the functional and pure project structures
LO2
Pure Project
Advantages:
• project manager has full authority
over the project
• team members report to one boss
• lines of communication are
shortened
• team pride, motivation, and
commitment are high
Disadvantages:
• duplication of resources
• organizational goals and policies
ignored
• lack of technology transfer.
• team members have no functional
area “home”
Functional Project
A functional project is housed within a functional division.
Functional Project
Advantages:
• team member can work on several
projects
• technical expertise is maintained
within a functional area
• functional area is a “home” after
project is completed
• there’s a critical mass of
specialized knowledge
Disadvantages:
• aspects of the project 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
Matrix Project
blends properties of functional and pure project structures
Matrix Project
Advantages:
• communication between functional
divisions enhanced.
• a project manager is held responsible
for successful completion of the
project
• team members have a functional
home after the project completion
• policies of the parent organization are
followed
Disadvantages:
• there are two bosses
• project may be doomed to failure
unless the project manager has
strong negotiation skills
• suboptimization is a danger
Work Breakdown Structure
Work breakdown structure = the hierarchy of project tasks, subtasks,
and work packages.
• Task is a further subdivision of a project.
• Subtask further divides the project into more meaningful pieces.
• Work package is a group of activities to be assignable to a single
organizational unit.
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Work Breakdown Structure
Project Control Charts
Tracking Progres Gantt Chart
Activity 1
Activity 2
Activity 3
Activity 4
Activity 5
Activity 6
time
horizontal axis is always time
Earned Value Management
Network-Planning Models
• a project is made up of a sequence of activities that form a network
• 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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Types of Network Planning Models
Critical Path Method (CPM)
• used when activity times are
known with certainty
• used to determine
• timing estimates for the project
• Time estimates for each activity in
the project
Time-Cost Models
• used when cost trade-off
information is a major
consideration in planning
• used to determine the least cost in
reducing total project time
• slack time for activities
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Critical Path Method (CPM)
1. Identify each activity to be done in the project
•
and estimate how long it will take to complete
2. Determine the required sequence of activities
•
and construct a network reflecting the precedence relationships
3. Determine the critical path
4. Determine the schedule with, for each activity:
•
•
•
•
early start
early finish
late start
late finish
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Critical Path Method (CPM)
1. Identify each activity to be done in the project
•
and estimate how long it will take to complete
task
Stock Analysis
A.
Select a company.
B.
Obtain the company’s annual report
and perform a ratio analysis.
C.
Collect technical stock price data
and construct charts.
D.
Individually review the data
and make a decision on whether to buy the stock.
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Critical Path Method Example
2. Determine the required sequence of activities
•
and construct a network reflecting the precedence relationships
Critical Path Method Example
3. Determine the critical path
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Critical Path Method Example
4. Determine the schedule with, for each activity:
•
early start
•
early finish
•
late start
•
late finish
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Critical Path Method Example
4. Determine the schedule with, for each activity:
•
early start
•
early finish
•
late start
•
late finish
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Activity Time Uncertainty
Time-Cost (Crash) Models
Extension of CPM that considers
the trade-off between the time
required to complete an activity
and cost.
• Referred to as “crashing” the
project.
Crashing Process:
1. Prepare a CPM-type diagram.
2. Determine the cost per unit of
time to expedite each activity.
3. Compute the critical path.
4. Shorten the critical path at the
least cost.
5. Plot project direct, indirect, and
total-cost curves and find the
minimum-cost schedule.
Time-Cost Trade-Off Procedure
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Time-Cost Trade-Off Procedure
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Time-Cost Trade-Off Procedure
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End of Chapter 5