Project Management

Project


series of related jobs usually directed toward
some major output and requiring a significant
period of time to perform.
Project Management
planning, directing, and controlling resources
(people, equipment, material) to meet the
technical, cost, and time constraints of the
project.
 Project or Program?

Irwin/McGraw-Hill
Project Management
Project Development
Management
of Projects
Work Breakdown Structure
Pure Project
Structure
Gantt Chart
Critical Path Scheduling
Functional
Structure
Matrix
Structure
Network Diagram
Single Time Estimate
Three Time Estimate
Early Start Schedule
Find Expected Activity Times
Late Start Schedule
Find Activity Variance
Activity Slack
Identify the Critical Path
Identify the Critical Path
Inferences about duration
Time Cost Models
Work Breakdown Structure
Level
1
Program
Project 1
2
Project 2
Task 1.1
Task 1.2
3
Subtask 1.1.1
4
Work Package 1.1.1.1
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Subtask 1.1.2
Work Package 1.1.1.2
Work Breakdown Structure

Requirements

Elements may be worked on independently

Elements are manageable in size

Program can be monitored and measured

The required resources are provided
Irwin/McGraw-Hill
Organizational Structure:
Pure Project--Advantages

The project manager has full authority over
the project

Team members report to one boss

Shortened communication lines

Team pride, motivation, and commitment are high
Irwin/McGraw-Hill
Organizational Structure:
Pure Project--Disadvantages




Duplication of resources
Organizational goals and policies are
ignored (also an advantage!)
Lack of technology transfer
Team members have no functional area
"home"
Irwin/McGraw-Hill
Functional Project
President
Research and
Development
Project Project
A
B
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Project
C
Engineering
Project Project
A
B
Project
C
Manufacturing
Project Project
A
B
Project
C
Organizational Structure:
Functional Project--Advantages




A team member can work on several projects
Technical expertise is maintained within the
functional area
The functional area is a home after the
project is completed
Critical mass of specialized knowledge
Irwin/McGraw-Hill
Organizational Structure:
Functional Project--Disadvantages



Aspects of the project that are not directly
related to the functional area get shortchanged
Motivation of team members is often weak
Needs of the client are secondary and are
responded to slowly
Irwin/McGraw-Hill
Matrix Project
President
Research and
Development
Manager
Project A
Manager
Project B
Manager
Project C
Irwin/McGraw-Hill
Engineering
Manufacturing
Marketing
Organizational Structure:
Matrix--Advantages

Enhanced inter-functional communications

Pinpointed responsibility

Duplication of resources is minimized

Functional home for team members

Policies of the parent organization are
followed (also a disadvantage!)
Irwin/McGraw-Hill
Organizational Structure:
Matrix--Disadvantages

Two bosses

Depends on Project Manager’s negotiating skills

Less flexibility for “pure project”

Potential for sub-optimization
Irwin/McGraw-Hill
Project Management
Management
of Projects
Project Development
Work Breakdown Structure
Gannt Chart
Critical Path Scheduling
Network Diagram
Single Time Estimate
Early Start Schedule
Late Start Schedule
Activity Slack
Identify the Critical Path
Three Time Estimate
Network-Planning Models




A project is made up of a sequence of activities
that form a network representing a project.
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.
Irwin/McGraw-Hill
Critical Path Scheduling:
PERT and CPM

CPM (critical path method)
J. E. Kelly of Remington-Rand and M. R. Walker
of Du Pont (1957)
 Scheduling maintenance shutdowns of chemical
processing plants


PERT (program evaluation & review technique)
U.S. Navy Special Projects Office (1958)
 Polaris missile project

Irwin/McGraw-Hill
Critical Path Scheduling
A project must have:

well-defined jobs or tasks whose
completion marks the end of the project;

independent jobs or tasks;

and tasks that follow a given sequence.
Irwin/McGraw-Hill
CPM with Single Time Estimate
Consider the following consulting project:
Activity
Assess customer's needs
Write and submit proposal
Obtain approval
Develop service vision and goals
Train employees
Quality improvement pilot groups
Write assessment report
Designation Immed. Pred. Time (Weeks)
A
B
C
D
E
F
G
None
A
B
C
C
D, E
F
2
1
1
2
5
5
1
Develop a critical path diagram and determine the
duration of the critical path and slack times for all
activities
Irwin/McGraw-Hill
First draw the network
D, 2
A, 2
B, 1
C, 1
F, 5
E, 5
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G, 1
Gannt Chart
Activity
Assess customer's needs
A
Write and submit proposal
B
Obtain approval
C
Develop service vision and goals D
Train employees
E
Quality improvement pilot groups F
Write assessment report
G
Week
Irwin/McGraw-Hill
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
|
|
|
|
|
|
10 11 12 13 14 15 16
Determine early start and
early finish times
ES=4
EF=6
ES=0
EF=2
ES=2
EF=3
ES=3
EF=4
A, 2
B, 1
C, 1
D, 2
?
ES=4
EF=9
E, 5
Irwin/McGraw-Hill
F, 5
G, 1
When I can start depends on
when predecessors finish
ES=4
EF=6
ES=0
EF=2
ES=2
EF=3
ES=3
EF=4
A, 2
B, 1
C, 1
D, 2
ES=4
EF=9
E, 5
Irwin/McGraw-Hill
ES=9
EF=14
F, 5
ES=14
EF=15
G, 1
Determine late starts and late
finish times
ES=4
EF=6
ES=0
EF=2
ES=2
EF=3
ES=3
EF=4
A, 2
B, 1
C, 1
?
D, 2
LS=7
LF=9
ES=4
EF=9
E, 5
LS=4
LF=9
Irwin/McGraw-Hill
ES=9
EF=14
ES=14
EF=15
F, 5
G, 1
LS=9
LF=14
LS=14
LF=15
Don’t delay the project
ES=4
EF=6
ES=0
EF=2
ES=2
EF=3
ES=3
EF=4
A, 2
B, 1
C, 1
LS=0
LF=2
LS=2
LF=3
LS=3
LF=4
D, 2
LS=7
LF=9
ES=4
EF=9
E, 5
LS=4
LF=9
Irwin/McGraw-Hill
ES=9
EF=14
ES=14
EF=15
F, 5
G, 1
LS=9
LF=14
LS=14
LF=15
Critical Path & Slack
ES=4
EF=6
ES=0
EF=2
ES=2
EF=3
ES=3
EF=4
A, 2
B, 1
C, 1
LS=0
LF=2
LS=2
LF=3
LS=3
LF=4
D, 2
LS=7
LF=9
ES=4
EF=9
E, 5
LS=4
LF=9
Irwin/McGraw-Hill
Slack=(7-4)=(9-6)= 3 Wks
ES=9
EF=14
ES=14
EF=15
F, 5
G, 1
LS=9
LF=14
LS=14
LF=15
Duration = 15 weeks
Project Management
Management
of Projects
Project Development
Work Breakdown Structure
Gannt Chart
Critical Path Scheduling
Network Diagram
Single Time Estimate
Three Time Estimate
Find Expected Activity Times
Find Activity Variance
Identify the Critical Path
Inferences about duration
CPM with Three Activity Time
Estimates
Immediate
Task Predecesors Optimistic Most Likely Pessimistic
A
None
3
6
15
B
None
2
4
14
C
A
6
12
30
D
A
2
5
8
E
C
5
11
17
F
D
3
6
15
G
B
3
9
27
H
E,F
1
4
7
I
G,H
4
19
28
Irwin/McGraw-Hill
Expected Times
Task
A
B
C
D
E
F
G
H
I
Immediate Expected
Predecesors
Time
None
7
None
5.333
A
14
A
5
C
11
D
7
B
11
E,F
4
G,H
18
Opt. Time + 4(Most Likely Time) + Pess. Time
Expected Time =
6
Irwin/McGraw-Hill
54 Days
C, 14
E, 11
H, 4
A, 7
D, 5
F, 7
I, 18
41 Days
B
5.333
G, 11
34.3 Days
Duration = 54 Days
What is the probability of finishing this project in
less than 53 days?
p(t < D)
t
TE = 54
D=53
Z =
D - TE
2

 cp
A ctivity variance, 
Task
A
B
C
D
E
F
G
H
I
2
Pessim . - O ptim . 2
= (
)
6
Optimistic Most Likely Pessimistic Variance
3
6
15
4
2
4
14
6
12
30
16
2
5
8
5
11
17
4
3
6
15
3
9
27
1
4
7
1
4
19
28
16
(Sum the variance along the critical path.)
2

 = 41
p(t < D)
TE = 54
D=53
Z =
D - TE
2

 cp
t
53 - 54
=
= -.156
41
p(Z < -.156) = .5 - .0636 = .436, or 43.6 % (Appendix D)
There is a 43.6% probability that this project will be
completed in less than 53 weeks.
Exercise: What is the probability that the
project duration will exceed 56 weeks?
p(t < D)
t
TE = 54
D=56
Z =
D - TE
2

 cp
56 - 54
=
= .312
41
p(Z > .312) = .5 - .1217 = .378, or 37.8 % (Appendix D)
Irwin/McGraw-Hill
Problem 5 - What is the probability of
completing the project in less that 16 days?
Activity
A
B
C
D
E
F
G
H
Irwin/McGraw-Hill
Immediate
Predecessors
--A
A
B
C, D
D, E
F, G
Time Estimates
a
m
b
1
3
5
1
2
3
1
2
3
2
3
4
3
4
11
3
4
5
1
4
6
2
4
5
Expected
Time Variance
Project Management
Management
of Projects
Project Development
Work Breakdown Structure
Pure Project
Structure
Gannt Chart
Critical Path Scheduling
Functional
Structure
Matrix
Structure
Network Diagram
Single Time Estimate
Three Time Estimate
Early Start Schedule
Find Expected Activity Times
Late Start Schedule
Find Activity Variance
Activity Slack
Identify the Critical Path
Identify the Critical Path
Inferences about duration
Time Cost Models
Time-Cost Models

Basic Assumption: Relationship between
activity completion time and project cost

Time Cost Models: Determine the optimum
point in time-cost tradeoffs



Irwin/McGraw-Hill
Activity direct costs
Project indirect costs
Activity completion times
Problem – Crashing a Project
D
B
6
10
A
5
E
G
7
4
C
Weeks
F
8
4
Activity
A
B
C
D
E
F
G
Normal
Time
5
10
8
6
7
4
4
Normal
Cost
$ 7,000
12,000
5,000
4,000
3,000
6,000
7,000
Crash
Time
3
7
7
5
6
3
3
Crash
Cost
$13,000
18,000
7,000
5,000
6,000
7,000
9,000