PRODUCTION AND
OPERATIONS
MANAGEMENT
Ch. 16: Project Management
POM - J. Galván
1
Strategic Importance of
Project Management

Bechtel Kuwait Project:
8,000 workers
• 1,000 construction professionals
• 100 medical personnel
• 2 helicopter evacuation teams
• 6 full-service dining halls
• 27,000 meals per day
• 40 bed field hospital
•
POM - J. Galván
2
Strategic Importance of
Project Management continued

Microsoft Windows 98 Project:
• hundreds
of programmers
• millions of lines of code
• millions of dollars cost

Ford Redesign of Mustang Project:
• 450
member project team
• Cost $700-million
• 25% faster and 30% cheaper than
comparable project at Ford
POM - J. Galván
3
Project Characteristics





Single unit
Many related activities
Difficult production planning and
inventory control
General purpose equipment
High labor skills
POM - J. Galván
4
An Example

Building construction
_
_
© 1995 Corel Corp.
POM - J. Galván
5
An Example

Research project
POM - J. Galván
6
An Example

New product introduction
New!
Improved!
19 · Nude Sandalfoot
Medium to Tall (B)
No nonsense
© 1995
Corel
Corp.
POM - J. Galván
7
What is a project?








A project is unique/nonrepetitive.
A project has a specific beginning, goal, purpose,
and end.
Thus a project is also temporary.
Projects must be given specific resources.
Projects usually cross functional lines and are
organized as a matrix.
Projects are for use by others: the usufructuary
and the user.
Projects generate systemic conflict.
Projects are “open veins” from which the entity
loses blood and where infection enter.
POM - J. Galván
8
Formal definition

A project is usually a one-time activity
• With a well-defined set of desired end results.
• It can be divided into subtasks that must be
accomplished in order to achieve the project goals.
• The project is complex enough that the subtasks require
careful coordination and control in terms of timing,
precedence, cost, and performance.
• The project itself must often be coordinated with other
projects being carried out by the same parent
organization.
POM - J. Galván
9
Management of Large Projects



Planning - goal setting, project
definition, team organization
Scheduling - relating people, money,
and supplies to specific activities and
activities to one and other
Controlling - monitoring resources,
costs, quality, and budgets; revising
plans and shifting resources to meet
time and cost demands
POM - J. Galván
10
Project Planning, Scheduling,
and Controlling
Project Planning
1. Setting goals
2. Defining the project
3. Tying needs into timed project
activities
4. Organizing the team
Time/cost estimates
Budgets
Engineering diagrams
Cash flow charts
Material availability details
Project Scheduling
1. Tying resources to specific
activities
2. Relating activities to each other
3. Updating and revising on a
regular basis
CPM/PERT
Gantt charts
Milestone charts
Cash flow schedules
Project Controlling
1. Monitoring resources, costs, quality,
and budgets
2. Revising and changing plans
3. Shifting resources to meet demands
Before Project
Reports
• budgets
• delayed activities
• slack activities
During Project
POM - J. Galván
11
Project Planning





Establishing
objectives
Defining project
Creating work
breakdown structure
Determining
resources
Forming organization
© 1995 Corel Corp.
POM - J. Galván
12
Project planning process









Overview – a short summary of objectives and scope
Objectives – a more detailed statement of the general
goals
General approach – managerial and technical approaches
to the work
Contractual aspects – contractual reporting and
requirements
Schedules – schedules and all milestone events
Resources – budget and cost monitoring and control
procedures
Personnel – expected personnel requirements and their
skills
Evaluation methods – procedure for monitoring and
evaluating
Potential problems – preparation for problems
POM - J. Galván
13
Project Organization




Often temporary structure
Uses specialists from entire company
Headed by project manager
• Coordinates activities
• Monitors schedule
Eng. Eng.
& costs
Mkt.
Acct.
Permanent
structure called
‘matrix organization’
POM - J. Galván
Mgr.
14
A Sample Project
Organization
President
Sales
Project 1
Project 2
Finance
Human
Factors
Engineering
Quality
Control
Production
Physiologist
Propulsion
Engineer
Test
Engineer
Technician
Psychologist
Structural
Engineer
Inspection
Technician
Technician
Project
Manager
Project
Manager
POM - J. Galván
15
Matrix Organization
Mkt
Project 1
Project 2
Project 3
Project 4
Oper
JJ
J J
JJ
J JJ
POM - J. Galván
Eng
Fin
JJ
J J
J
JJ
16
The Role of
the Project Manager
Project Plan
and Schedule
Revisions and
Updates
Project
Manager
Information
regarding times,
costs, problems,
delays
Project
Team
Performance
Reports
Feedback Loop
Top
Management
Resources
POM - J. Galván
17
Work Breakdown Structure
1.
2.
3.
4.
Project
Major tasks in the project
Subtasks in the major tasks
Activities
POM - J. Galván
18
Project Scheduling





Sequencing activities
Identifying precedence
relationships
Determining activity times
& costs
Estimating material &
worker requirements
Determining critical
activities
POM - J. Galván
19
Project Scheduling
Techniques



Gantt chart
Critical Path Method
(CPM)
Program Evaluation &
Review Technique (PERT)
POM - J. Galván
20
Gantt Chart
Activity
J
Time Period
F M A M
J
J
Design
Build
Test
POM - J. Galván
21
Project Control Reports








Detailed cost breakdowns for each task
Total program labor curves
Cost distribution tables
Functional cost and hour summaries
Raw materials and expenditure
forecasts
Variance reports
Time analysis reports
Work status reports
POM - J. Galván
22
PERT and CPM


Network techniques
Developed in 1950’s
CPM by DuPont for chemical plants
• PERT by U.S. Navy for Polaris missile
•


Consider precedence relationships
and interdependencies
Each uses a different estimate of
activity times
POM - J. Galván
23
Questions Which May Be
Addressed by PERT & CPM




Is the project on schedule, ahead of schedule,
or behind schedule?
Is the project over or under cost budget?
Are there enough resources available to finish
the project on time?
If the project must be finished in less than the
scheduled amount of time, what is the way to
accomplish this at least cost?
POM - J. Galván
24
The Six Steps Common to
PERT & CPM
1
2
3
4
5
6
Define the project and all of its significant activities or
tasks
Develop relationships among the activities. (Decide
which activities must precede and which must follow
others.)
Draw the network connecting all of the activities
Assign time and cost estimates to each activity
Compute the longest time path through the network.
This is called the critical path
Use the network to help plan, schedule, monitor, and
control the project
POM - J. Galván
25
Network Terms
Project: Obtain a college degree (B.S.)
Register
1
Event (Node)
Receive diploma
Attend class,
study etc.
4 Years
Activity
(Arrow)
POM - J. Galván
2
Event (Node)
26
Activity Relationships
2
A
1
B
A & B can occur
concurrently
3
POM - J. Galván
27
Activity Relationships
A must be done before
C & D can begin
2
A
C
1
B
D
4
3
POM - J. Galván
28
Activity Relationships
2
A
C
1
B
D
3
POM - J. Galván
4
E
B & C must be done
before E can begin
29
Dummy Activities



Activities are defined often by beginning &
ending events
• Example: Activity 2-3
Every activity must have unique pair of
beginning & ending events
• Otherwise, computer programs get confused
Dummy activities maintain precedence
• Consume no time or resources
POM - J. Galván
30
Dummy Activity Example
2-3
Incorrect
1-2
1
3-4
2
3
4
2-3
Correct
1-2
1
2-4
2
2-3
3
POM - J. Galván
4
4-5
5
3-4: Dummy
activity
31
PERT Activity Times

3 time estimates
Optimistic times (a)
• Most-likely time (m)
• Pessimistic time (b)
•




Follow beta distribution
Expected time: t = (a + 4m +
b)/6
Variance of times: v = (b - a)2/6
POM - J. Galván
32
Critical Path Analysis

Provides activity information
•
•
•

Earliest (ES) & latest (LS) start
Earliest (EF) & latest (LF) finish
Slack (S): Allowable delay
Identifies critical path
•
•
•
•
Longest path in network
Shortest time project can be completed
Any delay on activities delays project
Activities have 0 slack
POM - J. Galván
33
Earliest Start and Finish Steps




Begin at starting event & work forward
ES = 0 for starting activities
• ES is earliest start
EF = ES + Activity time
• EF is earliest finish
ES = Maximum EF of all predecessors for nonstarting activities
POM - J. Galván
34
Latest Start and Finish Steps




Begin at ending event & work backward
LF = Maximum EF for ending activities
• LF is latest finish; EF is earliest finish
LS = LF - Activity time
• LS is latest start
LF = Minimum LS of all successors for nonending activities
POM - J. Galván
35
Critical Path in Network
Pour
foundation &
frame
6 wk.
1
3 wk.
Buy
shrubs etc.
Do interior
work
3 wk.
2
Roof
2 wk.
3
4
Landscape
4 wk.
Critical path is longest path: 12 weeks.
POM - J. Galván
36
Gantt Chart
Earliest Start and Finish
Build House Project
1 1
1 2 3 4 5 6 7 8 9 1
0 1 2
Activity
1-2 Fdn & frame
1-3 Buy shrubs
2-3 Roof
2-4 Interior work
3-4 Landscape
POM - J. Galván
37
Gantt Chart
Latest Start and Finish
Build House Project
1 1 1
1 2 3 4 5 6 7 8 9 0 1 2
Activity
1-2 Fdn & frame
1-3 Buy shrubs
2-3 Roof
2-4 Interior work
3-4 Landscape
POM - J. Galván
38
Project Times

Expected project time Used to obtain
(T)
probability of project
•

Sum of critical path
activity times, t
completion!
Project variance (V)
•
Sum of critical path
activity variances, v
POM - J. Galván
39
An example
St. Adolf’s Hospital setup
POM - J. Galván
40
St. Adolf’s Hospital
Activity
A
B
C
D
E
F
G
H
I
J
K
Description
Immediate
Predecessor(s)
Select administrative and medical staff.
Select site and do site survey.
Select equipment.
Prepare final construction plans and layout.
Bring utilities to the site.
Interview applicants and fill positions in nursing,
support staff, maintenance, and security.
Purchase and take delivery of equipment.
Construct the hospital.
Develop an information system.
Install the equipment.
Train nurses and support staff.
POM - J. Galván
41
St. Adolf’s Hospital
Activity
A
B
C
D
E
F
G
H
I
J
K
Description
Immediate
Predecessor(s)
Select administrative and medical staff.
—
Select site and do site survey.
—
Select equipment.
A
Prepare final construction plans and layout.
B
Bring utilities to the site.
B
Interview applicants and fill positions in nursing,
support staff, maintenance, and security.
A
Purchase and take delivery of equipment.
C
Construct the hospital.
D
Develop an information system.
A
Install the equipment.
E,G,H
Train nurses and support staff.
F,I,J
POM - J. Galván
42
Example
4.1
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview applicants and fill positions in nursing,
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the hospital.
D
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support staff.
F,I,J
POM - J. Galván
43
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
Start applicants and fill positions in nursing,
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the hospital.
D
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support staff.
F,I,J
POM - J. Galván
44
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
Start applicants and fill positions in nursing,
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
B hospital.
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support staff.
F,I,J
POM - J. Galván
45
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
C and fill positions in nursing,
Start applicants
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
B hospital.
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support staff.
F,I,J
POM - J. Galván
46
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
C and fill positions in nursing,
Start applicants
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
D
B hospital.
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support staff.
F,I,J
POM - J. Galván
47
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
C and fill positions in nursing,
Start applicants
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
D
B hospital.
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support
staff.
F,I,J
E
POM - J. Galván
48
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
C and fill positions in nursing,
Start applicants
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
D
B hospital.
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support
staff.
F,I,J
E
POM - J. Galván
49
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
C and fill
G positions in nursing,
Start applicants
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
D
B hospital.
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support
staff.
F,I,J
E
POM - J. Galván
50
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
C and fill
G positions in nursing,
Start applicants
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
D
B hospital.
H
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support
staff.
F,I,J
E
POM - J. Galván
51
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
I
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
C and fill
G positions in nursing,
Start applicants
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
D
B hospital.
H
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support
staff.
F,I,J
E
POM - J. Galván
52
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
I
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
C and fill
G positions in nursing,
Start applicants
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
D
B hospital.
H
J
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support
staff.
F,I,J
E
POM - J. Galván
53
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
I
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
K
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
C and fill
G positions in nursing,
Start applicants
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
D
B hospital.
H
J
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support
staff.
F,I,J
E
POM - J. Galván
54
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Description
AON Network
I
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
K
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview
in nursing,
C and fill
G positionsFinish
Start applicants
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the
D
D
B hospital.
H
J
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support
staff.
F,I,J
E
Figure 4.2
POM - J. Galván
55
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
Completion Time Description
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
C
Select equipment.
A
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
F
Interview applicants and fill positions in nursing,
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
H Construct the hospital.
D
I
Develop and information system.
A
J
Install the equipment.
E,G,H
K
Train nurses and support staff.
F,I,J
POM - J. Galván
56
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
I
Completion Time Description
15
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
K
C
Select equipment.
A
12
10
6
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
C
G
F
Interview
nursing,
Start applicants and fill positions in
Finish
10
35
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
B
D
H
J
H Construct the
hospital.
D
9
10
40
4
I
Develop and information system.
A
J
Install the equipment.
E,G,H
E
K
Train nurses and support
staff.
F,I,J
Figure 4.4
24
POM - J. Galván
57
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
I
Completion Time Description
15
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
K
C
Select equipment.
A
12
10
6
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
C
G
F
Interview
nursing,
Start applicants and fill positions in
Finish
10
35
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
B
D
H
J
H Construct the
hospital.
D
9
10
40
4
I
Develop and information system.
A
J
Install the equipment.
E,G,H
E
K
Train nurses and support
staff.
F,I,J
24
POM - J. Galván
58
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
I
Completion Time Description
15
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
K
C
Select equipment.
A
12
10
6
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
C
G
F
Interview
nursing,
Start applicants and fill positions in
Finish
10
35
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
B
D
H
J
H Construct the
hospital.
D
9
10
40
4
I
Develop and information system.
A
J
Install the equipment.
E,G,H
E
K
Train nurses and support
staff.
F,I,J
24
POM - J. Galván
59
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
I
Completion Time Description
15
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
K
C
Select equipment.
A
12
10
6
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
C
G
F
Interview
nursing,
Start applicants and fill positions in
Finish
10
35
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
B
D
H
J
H Construct the
hospital.
D
9
10
40
4
I
Develop and information system.
A
J
Install the equipment.
E,G,H
E
K
Train nurses and support
staff.
F,I,J
24
POM - J. Galván
60
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
I
Completion Time Description
15
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
K
C
Select equipment.
A
12
10
6
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
C
G
F
Interview
nursing,
Start applicants and fill positions in
Finish
10
35
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
B
D
H
J
H Construct the
hospital.
D
9
10
40
4
I
Develop and information system.
A
J
Install the equipment.
E,G,H
E
K
Train nurses and support
staff.
F,I,J
24
POM - J. Galván
61
St. Adolf’s Hospital
Immediate
Predecessor(s)
Activity
I
Completion Time Description
15
A
Select administrative and medical staff.
—
B
Select site and do site survey.
—
A
F
K
C
Select equipment.
A
12
10
6
D Prepare final construction plans and layout.
B
E
Bring utilities to the site.
B
C
G
F
Interview
nursing,
Start applicants and fill positions in
Finish
10
35
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
B
D
H
J
H Construct the
hospital.
D
9
10
40
4
I
Develop and information system.
A
J
Install the equipment.
E,G,H
E
K
Train nurses and support
staff.
F,I,J
24
POM - J. Galván
62
St. Adolf’s Hospital
Path
Expected Time (wks)
Immediate
Predecessor(s)
Activity
Description
I
Completion
Time
A-F-K
28
15
A
Select administrative
and medical staff.
—
A-I-K
33
B
Select site
survey.
—
A-C-G-J-K
67Aand do site
F
K
C
Select equipment.
A
12
10
6
B-D-H-J-K
69
D Prepare final
B
B-E-J-K
43 construction plans and layout.
E
Bring utilities to the site.
B
C
G
F
Interview
nursing,
Start applicants and fill positions in
Finish
10
35
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
B
D
H
J
H Construct the
hospital.
D
9
10
40
4
I
Develop and information system.
A
J
Install the equipment.
E,G,H
E
K
Train nurses and support
staff.
F,I,J
24
POM - J. Galván
63
St. Adolf’s Hospital
Path
Expected Time (wks)
Immediate
Predecessor(s)
Activity
Description
I
Completion
Time
A-F-K
28
15
A
Select administrative
and medical staff.
—
A-I-K
33
B
Select site
survey.
—
A-C-G-J-K
67Aand do site
F
K
C
Select equipment.
A
12
10
6
B-D-H-J-K
69
D Prepare final
B
B-E-J-K
43 construction plans and layout.
E
Bring utilities to the site.
B
C
G
F
Interview
nursing,
Start applicants and fill positions in
Finish
10
35
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
B
D
H
J
H Construct the
hospital.
D
9
10
40
4
I
Develop and information system.
A
J
Install the equipment.
E,G,H
E
K
Train nurses and support
staff.
F,I,J
24
POM - J. Galván
64
St. Adolf’s Hospital
Path
Expected Time (wks)
Immediate
Predecessor(s)
Activity
Description
I
Completion
Time
A-F-K
28
15
A
Select administrative
and medical staff.
—
A-I-K
33
B
Select site
survey.
—
A-C-G-J-K
67Aand do site
F
K
C
Select equipment.
A
12
10
6
B-D-H-J-K
69
D Prepare final
B
B-E-J-K
43 construction plans and layout.
E
Bring utilities to the site.
B
C
G
F
Interview
nursing,
Start applicants and fill positions in
Finish
10
35
support staff, maintenance, and security.
A
G Purchase and take delivery of equipment.
C
B
D
H
J
H Construct the
hospital.
D
9
10
40
4
I
Develop and information system.
A
J
Install the equipment.
E,G,H
E
K
Train nurses and support
staff.
F,I,J
24
POM - J. Galván
65
St. Adolf’s Hospital
Figure 4.5
POM - J. Galván
66
St. Adolf’s Hospital
POM - J. Galván
67
St. Adolf’s Hospital
I
15
A
F
K
12
10
6
Start
B
9
Earliest Start
and
Earliest Finish Times
C
G
10
35
D
H
J
10
40
4
Finish
E
24
POM - J. Galván
68
St. Adolf’s Hospital
I
15
Earliest start time
0
A
F
K
12
10
6
Start
B
9
Earliest Start
and
Earliest Finish Times
C
G
10
35
D
H
J
10
40
4
Finish
E
24
POM - J. Galván
69
St. Adolf’s Hospital
I
15
Earliest start time
0
A
12
12
Start
B
9
Earliest Start
and
Earliest Finish Times
Earliest finish time
F
K
10
6
C
G
10
35
D
H
J
10
40
4
Finish
E
24
POM - J. Galván
70
St. Adolf’s Hospital
I
15
0
A
12
12
Start
0
B
9
9
Earliest Start
and
Earliest Finish Times
F
K
10
6
C
G
10
35
D
H
J
10
40
4
Finish
E
24
POM - J. Galván
71
St. Adolf’s Hospital
I
15
0
A
12
12
Start
0
B
9
9
Earliest Start
and
Earliest Finish Times
9
F
K
10
6
C
G
10
35
D
19
10
9
E
24
POM - J. Galván
Finish
H
J
40
4
33
72
St. Adolf’s Hospital
I
12
27
15
0
A
12
12
F
10
12
12
Start
C
6
22
10
0
B
K
22
9
9
Earliest Start
and
Earliest Finish Times
9
D
E
24
POM - J. Galván
Finish
35
19
10
9
G
H
J
40
4
33
73
St. Adolf’s Hospital
I
12
27
15
0
A
12
12
F
K
22
10
12
12
Start
C
6
G
22
10
0
B
9
9
Earliest Start
and
Earliest Finish Times
9
D
35
19
E
24
POM - J. Galván
19
H
40
10
9
Finish
59
J
4
33
74
St. Adolf’s Hospital
I
12
27
15
0
A
12
12
F
K
22
10
12
12
Start
C
6
22
22
10
0
B
9
9
Earliest Start
and
Earliest Finish Times
9
D
E
24
POM - J. Galván
57
Finish
35
19
19
H
40
10
9
G
59
J
4
33
75
St. Adolf’s Hospital
I
12
27
15
0
A
12
12
F
K
22
10
12
12
Start
C
6
22
22
10
0
B
9
9
Earliest Start
and
Earliest Finish Times
9
D
E
24
POM - J. Galván
57
Finish
35
19
19
H
40
10
9
G
59
59
J
63
4
33
Example764.2
St. Adolf’s Hospital
I
Earliest start time
0
A
12
12
15
12
12
Critical
path
0
B
F
Earliest finish time
63
22
10
12
Start
27
9
9
Earliest Start
and
Earliest Finish Times
C
D
22
22
E
24
POM - J. Galván
G
57
Finish
35
19
19
H
40
10
9
69
6
10
9
K
59
59
J
63
4
33
77
St. Adolf’s Hospital
I
12
27
15
0
A
12
12
F
63
22
10
12
12
Start
C
B
9
Latest Start
and
Latest Finish Times
9
9
D
22
22
E
24
POM - J. Galván
G
57
Finish
35
19
19
H
40
10
9
69
6
10
0
K
59
59
J
63
4
33
78
St. Adolf’s Hospital
I
12
27
15
0
A
12
12
F
63
63
22
10
12
12
Start
C
22
22
10
0
B
9
Latest Start
and
Latest Finish Times
9
9
D
E
24
POM - J. Galván
6
69
69
57
19
19
H
40
59
Latest
finish
time
Finish
35
10
9
G
K
59
J
63
4
33
79
St. Adolf’s Hospital
I
12
27
15
0
A
12
12
F
22 Latest
start
time
10
12
12
Start
C
22
22
10
0
B
9
Latest Start
and
Latest Finish Times
9
9
D
E
24
POM - J. Galván
G
K
6
69
69
57
19
19
H
40
59
Latest
finish
time
Finish
35
10
9
63
63
59
J
63
4
33
80
St. Adolf’s Hospital
I
12
48
0
A
12
12
12
53
12
Start
15
F
10
C
27
63
63
63
22
63
22
22
10
0
B
9
Latest Start
and
Latest Finish Times
9
9
D
E
24
POM - J. Galván
6
69
69
57
Finish
35
19
19
H
40
10
9
G
K
59
59
59
J
4
63
63
33
81
St. Adolf’s Hospital
I
12
48
0
A
12
12
12
53
12
Start
15
F
10
C
27
63
22
10
0
B
9
Latest Start
and
Latest Finish Times
9
9
D
19
10
9
35
E
24
POM - J. Galván
63
63
22
63
22
24
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
82
St. Adolf’s Hospital
I
12
48
0
A
12
12
12
53
12
14
Start
0
B
9
Latest Start
and
Latest Finish Times
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
83
St. Adolf’s Hospital
I
Earliest start time
Latest start time
0
2
Start
A
12
12
14
Critical
path
0
0
B
9
Latest Start
and
Latest Finish Times
9
9
12
48
12
53
12
14
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
Earliest finish time
Latest finish time
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
84
St. Adolf’s Hospital
Gantt charts
POM - J. Galván
85
St. Adolf’s Hospital
Gantt Charts
POM - J. Galván
86
St. Adolf’s Hospital
I
12
48
0
2
A
12
12
14
12
14
Start
0
0
Activity Slack
Analysis
12
53
B
9
9
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
87
Slack Hospital
St. Activity
Adolf’s
I
12
48
0
2
A
12
12
14
12
14
Start
0
0
Activity Slack
Analysis
12
53
B
9
9
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
88
Slack Hospital
St. Activity
Adolf’s
I
12
48
Slack = LS – ES
or
0
2
A
Slack = LF – EF12
12
14
12
14
Start
0
0
Activity Slack
Analysis
12
53
B
9
9
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
89
Slack Hospital
St. Activity
Adolf’s
I
12
48
SlackK = 63 – 63
or
0
2
A
12
SlackK = 69 – 69
12
14
12
14
Start
0
0
Activity Slack
Analysis
12
53
B
9
9
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
90
Slack Hospital
St. Activity
Adolf’s
I
12
48
SlackK = 0
or
SlackK = 0
0
2
A
12
12
14
12
14
Start
0
0
Activity Slack
Analysis
12
53
B
9
9
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
91
St. Adolf’s Hospital
I
12
48
0
2
A
12
12
14
12
14
Start
0
0
Activity Slack
Analysis
12
53
B
9
9
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
92
Node DurationES
LS
Slack
St. Adolf’s Hospital
I
12
48
0
2
A
12
12
14
12
14
Start
0
0
Activity Slack
Analysis
12
53
B
9
9
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
93
Node DurationES
LS
Slack
St.
Adolf’s
Hospital
A
12
0
2
2
I
B
C
D
E
F
G
H
I
J
K
9
10
10
24
10
35
40
15
4
6
0
12
9
9
12
22
19
12
59
Start
63
0
14
9
35
53
24
19
48
59
63
0
2
0
26
0 A
41
2
2
12
0
36
0
0
0
0
Activity Slack
Analysis
B
9
12
48
12
14
12
53
12
14
9
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
94
Node DurationES
LS
Slack
0
14
9
35
53
24
19
48
59
63
0
2
0
26
41
2
0
36
0
0
St.
Adolf’s
Hospital
A
12
0
2
2
I
B
C
D
E
F
G
H
I
J
K
9
10
10
24
10
35
40
15
4
6
0
12
9
9
12
22
19
12
59
63
0
0
Critical Path
B
9
12
48
12
53
12
14
9
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
95
St. Adolf’s Hospital
I
12
48
0
2
A
12
12
14
12
14
Start
0
0
Critical Path
12
53
B
9
9
9
9
9
9
35
15
F
10
C
10
D
10
E
24
POM - J. Galván
27
63
63
63
22
63
22
24
22
24
19
19
19
19
G
35
H
40
K
6
69
69
57
59
59
59
Finish
59
59
J
4
63
63
33
59
96
St. Adolf’s Hospital
POM - J. Galván
97
St. Adolf’s Hospital
Activity Slack
POM - J. Galván
98
St. Adolf’s Hospital
POM - J. Galván
99
St. Adolf’s Hospital
Cost-Time Relationships in Cost Analysis
Direct cost (dollars)
8000 —
7000 —
6000 —
5000 —
4000 —
3000 —
0—
|
5
|
6
|
7
8
|
9
POM - J. Galván
Time
(weeks)
|
|
10 11
100
St. Adolf’s Hospital
Cost-Time Relationships in Cost Analysis
Direct cost (dollars)
8000 —
Crash cost (CC)
7000 —
6000 —
5000 —
4000 —
3000 —
0—
Normal cost (NC)
|
5
|
6
|
7
8
|
9
|
|
10 11
(Crash time)
(Normal time)
POM - J. Galván
Time
(weeks)
101
St. Adolf’s Hospital
Cost-Time Relationships in Cost Analysis
Direct cost (dollars)
8000 —
Crash cost (CC)
7000 —
Linear cost assumption
6000 —
5000 —
4000 —
3000 —
0—
Normal cost (NC)
|
5
|
6
|
7
8
|
9
|
|
10 11
(Crash time)
(Normal time)
POM - J. Galván
Time
(weeks)
102
St. Adolf’s Hospital
Cost-Time Relationships in Cost Analysis
Direct cost (dollars)
8000 —
Crash cost (CC)
7000 —
Linear cost assumption
6000 —
5200
5000 —
Estimated costs
for a 2-week
reduction, from
10 weeks to
8 weeks
4000 —
3000 —
0—
Normal cost (NC)
|
5
|
6
|
7
8
|
9
|
|
10 11
(Crash time)
(Normal time)
POM - J. Galván
Time
(weeks)
103
St. Adolf’s Hospital
POM - J. Galván
104
St. Adolf’s Hospital
Normal
Time
Activity (NT)
A
B
C
D
E
F
G
H
I
J
K
12
9
10
10
24
10
35
40
15
4
6
Normal
Cost
(NC)
$ 12,000
50,000
4,000
16,000
120,000
10,000
500,000
1,200,000
40,000
10,000
30,000
Totals $1,992,000
Crash
Time
(CT)
11
7
5
8
14
6
25
35
10
1
5
Crash
Cost
(CC)
$ 13,000
64,000
7,000
20,000
200,000
16,000
530,000
1,260,000
52,500
13,000
34,000
$2,209,000
POM - J. Galván
Maximum
Time
Cost of
Reduction Crashing per
(wk)
Week
1
2
5
2
10
4
10
5
5
2
1
$ 1,000
7,000
600
2,000
8,000
1,500
3,000
12,000
2,500
1,000
4,000
105
St. Adolf’s Hospital
POM - J. Galván
106
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
POM - J. Galván
107
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
POM - J. Galván
108
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Path B-D-H-J-K: 69 weeks
Crash Activity J by 3 weeks @ $1,000/week
POM - J. Galván
109
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Path B-D-H-J-K: 69 weeks
Crash Activity J by 3 weeks @ $1,000/week
3($28,000) – 3($1,000) = $81,000
POM - J. Galván
110
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Path B-D-H-J-K: 66 weeks
Crash Activity J by 3 weeks @ $1,000/week
3($28,000) – 3($1,000) = $81,000
$2,624,000 – $81,000 = $2,543,000
POM - J. Galván
111
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,543,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Path B-D-H-J-K: 66 weeks
Crash Activity J by 3 weeks @ $1,000/week
3($28,000) – 3($1,000) = $81,000
$2,624,000 – $81,000 = $2,543,000
POM - J. Galván
112
St. Adolf’s Hospital
I
15
Minimum Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks A
67 weeks 12
B-D-H-J-K:
B-E-J-K:
F
10
69 weeks
43 Kweeks
6
Total cost = $2,624,000C $2,543,000
G
Start
Finish
Indirect costs = $8,000/week
10
35
Penalty cost = $20,000/week after week 65
B
9
B-D-H-J-K:
H
D
40
6910weeks
J
1
Critical Path
Crash Activity J by 3 weeks @ $1,000/week
E
24=
3($1,000)
3($28,000) –
$81,000
$2,624,000 – $81,000 = $2,543,000
POM - J. Galván
113
St. Adolf’s Hospital
I
Minimum Cost Schedule
15
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
A
28 weeks
12
67 weeks
B-D-H-J-K: 69 weeks
F B-E-J-K:
K43 weeks
10
6
Total cost = $2,624,000
$2,543,000
C
G
Start
Finish
10
35
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
B
D
9
10
B-D-H-J-K:
69
H
40
weeks
J
1
Critical Path
Crash Activity J by 3 weeks @ $1,000/week
E
24
3($1,000)
3($28,000) –
= $81,000
$2,624,000 – $81,000 = $2,543,000
POM - J. Galván
114
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,543,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Path B-D-H-J-K: 66 weeks
Crash Activity D by 2 weeks @ $2,000/week
POM - J. Galván
115
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,543,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Path B-D-H-J-K: 66 weeks
Crash Activity D by 2 weeks @ $2,000/week
$28,000 + $8,000 – 2($2,000) = $32,000
$2,543,000 – $32,000 = $2,511,000
POM - J. Galván
116
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,511,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Path B-D-H-J-K: 64 weeks
Crash Activity D by 2 weeks @ $2,000/week
$28,000 + $8,000 – 2($2,000) = $32,000
$2,543,000 – $32,000 = $2,511,000
POM - J. Galván
117
St. Adolf’s Hospital
I
Minimum Cost Schedule15
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeksA
67 weeks12
B-D-H-J-K:
F
B-E-J-K:
10
69 weeks
43K weeks
6
Total cost = $2,624,000
C $2,511,000
G
Start
Finish
Indirect costs = $8,000/week
10
35
Penalty cost = $20,000/week after week 65
B
9
B-D-H-J-K:
D
10
69
H
40
weeks
J
1
Critical Path
Crash Activity D by 2 weeks @ $2,000/week
E
24
2($2,000)
$28,000 + $8,000 –
= $32,000
$2,543,000 – $32,000 = $2,511,000
POM - J. Galván
118
St. Adolf’s Hospital
Minimum Cost
A-I-K:
A-F-K:
A-C-G-J-K:
I
Schedule15
33 weeks
28 weeksA
67 weeks12
B-D-H-J-K:
F
B-E-J-K:
10
69 weeks
43K weeks
6
Total cost = $2,624,000
$2,511,000
C
G
Start
Finish
10
35
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
B
9
B-D-H-J-K:
D
8
69
H
40
weeks
J
1
Critical Path
Crash Activity D by 2 weeks @ $2,000/week
E
24
$28,000 + $8,000 – 2($2,000) = $32,000
$2,543,000 – $32,000 = $2,511,000
POM - J. Galván
119
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,511,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Paths B-D-H-J-K and A-C-G-J-K: 64 weeks
Crash Activity K by 1 week @ $4,000/week
POM - J. Galván
120
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,511,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Paths B-D-H-J-K and A-C-G-J-K: 64 weeks
Crash Activity K by 1 week @ $4,000/week
$8,000 – $4,000 = $4,000
$2,511,000 – $4,000 = $2,507,000
POM - J. Galván
121
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,507,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Paths B-D-H-J-K and A-C-G-J-K: 63 weeks
Crash Activity K by 1 week @ $4,000/week
$8,000 – $4,000 = $4,000
$2,511,000 – $4,000 = $2,507,000
POM - J. Galván
122
St. Adolf’s Hospital
Minimum Cost
A-I-K:
A-F-K:
A-C-G-J-K:
I
Schedule15
33 weeks
28 weeksA
67 weeks12
B-D-H-J-K:
F
B-E-J-K:
10
69 weeks
43K weeks
6
Total cost = $2,624,000
$2,511,000
C
G
Start
Finish
10
35
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
B
9
B-D-H-J-K:
D
8
69
H
40
weeks
J
1
Critical Path
Crash Activity D by 2 weeks @ $2,000/week
E
24
$28,000 + $8,000 – 2($2,000) = $32,000
$2,543,000 – $32,000 = $2,511,000
POM - J. Galván
123
St. Adolf’s Hospital
Minimum Cost
A-I-K:
A-F-K:
A-C-G-J-K:
I
Schedule15
33 weeks
28 weeksA
67 weeks12
B-D-H-J-K:
F
B-E-J-K:
10
69 weeks
43K weeks
5
Total cost = $2,624,000
$2,511,000
C
G
Start
Finish
10
35
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
B
9
B-D-H-J-K:
D
8
69
H
40
weeks
J
1
Critical Path
Crash Activity D by 2 weeks @ $2,000/week
E
24
$28,000 + $8,000 – 2($2,000) = $32,000
$2,543,000 – $32,000 = $2,511,000
POM - J. Galván
124
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,507,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Paths B-D-H-J-K and A-C-G-J-K: 63 weeks
Crash Activities B and C by 2 weeks
@ $7,000/week and $600/week
POM - J. Galván
125
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,507,000
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Paths B-D-H-J-K and A-C-G-J-K: 63 weeks
Crash Activities B and C by 2 weeks
@ $7,000/week and $600/week
2($8,000) – 2($7,600) = $800
$2,507,000 – $800
= $2,506,200
POM - J. Galván
126
St. Adolf’s Hospital
Minimum-Cost Schedule
A-I-K:
A-F-K:
A-C-G-J-K:
33 weeks
28 weeks
67 weeks
B-D-H-J-K:
B-E-J-K:
69 weeks
43 weeks
Total cost = $2,624,000 $2,506,200
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
Critical Paths B-D-H-J-K and A-C-G-J-K: 61 weeks
Crash Activities B and C by 2 weeks
@ $7,000/week and $600/week
2($8,000) – 2($7,600) = $800
$2,507,000 – $800
= $2,506,200
POM - J. Galván
127
St. Adolf’s Hospital
Minimum Cost
A-I-K:
A-F-K:
A-C-G-J-K:
I
Schedule15
33 weeks
28 weeksA
67 weeks12
B-D-H-J-K:
F
B-E-J-K:
10
69 weeks
43K weeks
5
Total cost = $2,624,000
$2,511,000
C
G
Start
Finish
10
35
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
B
9
B-D-H-J-K:
D
8
69
H
40
weeks
J
1
Critical Path
Crash Activity D by 2 weeks @ $2,000/week
E
24
$28,000 + $8,000 – 2($2,000) = $32,000
$2,543,000 – $32,000 = $2,511,000
POM - J. Galván
128
St. Adolf’s Hospital
Minimum Cost
A-I-K:
A-F-K:
A-C-G-J-K:
I
Schedule15
33 weeks
28 weeksA
67 weeks12
B-D-H-J-K:
F
B-E-J-K:
10
69 weeks
43K weeks
5
Total cost = $2,624,000
$2,511,000
C
G
Start
Finish
8
35
Indirect costs = $8,000/week
Penalty cost = $20,000/week after week 65
B
7
B-D-H-J-K:
D
8
69
H
40
weeks
J
1
Critical Path
Crash Activity D by 2 weeks @ $2,000/week
E
24
$28,000 + $8,000 – 2($2,000) = $32,000
$2,543,000 – $32,000 = $2,511,000
POM - J. Galván
129
St. Adolf’s Hospital
Probabilistic
Time Estimates
I
A
Start
B
F
K
C
G
D
H
Finish
J
E
POM - J. Galván
130
St. Adolf’s Hospital
Probabilistic
Time Estimates
I
A
Activity B
Most
Optimistic Likely Pessimistic
(a)
(m)
(b)
7
8
15
Start
B
F
K
C
G
D
H
Finish
J
E
POM - J. Galván
131
St. Adolf’s Hospital
Probabilistic
Time Estimates
I
A
Activity B
Most
Optimistic Likely Pessimistic
(a)
(m)
(b)
7
8
15
7 + 4(8) + 15
te =
6
Start
B
= 9 weeks
POM - J. Galván
F
K
C
G
D
H
Finish
J
E
132
St. Adolf’s Hospital
Probabilistic
Time Estimates
I
A
Activity B
Most
Optimistic Likely Pessimistic
(a)
(m)
(b)
7
8
15
7 + 4(8) + 15
te =
6
(
15 - 7
2
 =
6
2
)
Start
B
= 9 weeks
F
K
C
G
D
H
Finish
J
E
= 1.78
POM - J. Galván
133
St. Adolf’s Hospital
Time Estimates (wk)
Optimistic Likely
Activity
(a)
(m)
Activity Statistics
Pessimistic Expected Variance
(b)
Time (te )
(2 )
POM - J. Galván
134
St. Adolf’s Hospital
Time Estimates (wk)
Optimistic Likely
Activity
(a)
(m)
A
B
C
D
E
F
G
H
I
J
K
11
7
5
8
14
6
25
35
10
1
5
12
8
10
9
25
9
36
40
13
2
6
Activity Statistics
Pessimistic Expected Variance
(b)
Time (te )
(2 )
13
15
15
16
30
18
41
45
28
15
7
POM - J. Galván
12
9
10
10
24
10
35
40
15
4
6
0.11
1.78
2.78
1.78
7.11
4.00
7.11
2.78
9.00
5.44
0.11
135
St. Adolf’s Hospital
Probabilities
Critical Path = B - D - H - J - K
T = 72 days
POM - J. Galván
TE = 69 days
136
St. Adolf’s Hospital
Probabilities
Critical Path = B - D - H - J - K
T = 72 days
2
TE = 69 days
T –TE
=  (variances of activities) z =
2
POM - J. Galván
137
St. Adolf’s Hospital
Probabilities
Critical Path = B - D - H - J - K
T = 72 days
2
TE = 69 days
T – TE
=  (variances of activities) z =
2
2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89
POM - J. Galván
138
St. Adolf’s Hospital
Probabilities
Critical Path = B - D - H - J - K
T = 72 days
2
TE = 69 days
T – TE
=  (variances of activities) z =
2
2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89
72 – 69
z=
11.89
POM - J. Galván
139
St. Adolf’s Hospital
Probabilities
Critical Path = B - D - H - J - K
T = 72 days
2
TE = 69 days
T – TE
=  (variances of activities) z =
2
2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89
72 – 69
z=
11.89
= 0.87
POM - J. Galván
140
St. Adolf’s Hospital
Probabilities
Critical Path = B - D - H - J - K
T = 72 days
2
TE = 69 days
T – TE
=  (variances of activities) z =
2
2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89
72 – 69
z=
11.89
From Appendix 2
= 0.87 P = .8078  .81
z
POM - J. Galván
141
St. Adolf’s Hospital
Probabilities
Critical
Path
Length
of = B critical
T = 72
days
path
2
=
Probability
of meeting
(variances
the schedule
is 0.8078
of
Normal
D - Hdistribution:
- J - K Mean
= 69 weeks;
TE = 69
days
= 3.45
weeks
T-T
Probability Eof
z
=
activities) exceeding
2 72
weeks is
0.1922
2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89
72 - 69
z=
11.89
= 0.87
69 72
Project duration (weeks)
POM - J. Galván
Figure 4.12
142
St. Adolf’s Hospital
Probabilities
Path = A - C - G - J - K
T = 72 days
2
TE = 67 days
T – TE
=  (variances of activities) z =
2
2 = 0.11 + 2.78 + 7.11 + 5.44 + 0.11 = 15.55
72 – 67
z=
15.55
From Appendix 2
= 1.27 P = .8980  .90
z
POM - J. Galván
143
St. Adolf’s Hospital
I
A
Start
B
F
K
C
G
D
H
Finish
J
E
POM - J. Galván
144
St. Adolf’s Hospital
Activity
Duration
C
G
J
K
D
H
E
I
F
10
35
4
6
10
40
24
15
10
Earliest Start Latest Start
16
26
61
65
10
20
10
16
16
POM - J. Galván
14
24
59
63
9
19
35
48
53
Slack
–2
–2
–2
–2
–1
–1
25
32
37
145
Project Life Cycle
POM - J. Galván
146
Resource requirements
Project Life Cycle
Start
POM - J. Galván
Time
Finish
147
Resource requirements
Project Life Cycle
Definition Planning
and
organizati
on
Figure 4.13 Start
Execution
POM - J. Galván
Time
Close out
Finish
148