Class Seven-Time Mgt

8/8/2019 Class Seven-Time Mgt

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Continuous ImprovementContinuous Improvement

Project TimeManagement

ZAFAR KAMAL


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Project and Project Management

Project temporary endeavor undertaken to create aunique product or service

Has a definite beginning and end and interrelatedactivities

Programs adopt new set of objectives and continue towork; projects cease when declared objectives havebeen attained


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Projects are unique characteristics are progressivelyelaborated

Progressively: proceeding in steps

Elaborated: worked with care and detail

Scope of project should remain constant even ascharacteristics are progressively elaborated



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Project Management: the application of knowledge, skills,tools and techniques to project activities in order to meet orexceed stakeholder needs and expectations from a definedproject balancing the following:

Scope, time, cost, and quality

Stakeholders expectations Requirements (needs) vs. unidentified requirements

(expectations)



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Programs are groups of projects managed in acoordinated way to obtain benefits not available frommanaging the projects individually

Most programs have elements of ongoing operations

Series of repetitive or cyclical undertakings Projects are often divided into subprojects for more

manageability Often contracted out to external organizations



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Project Time Management

General Comments:

Projects can have more than 1 critical path (increases risk) and caninvolve dummy tasks

Negative float indicates that you are behind Resource Leveling involves possibly letting schedule and cost slip Heuristics just means rule of thumb e.g. 80/20 rule Schedules are calendar based makes this different than a time

estimate

Bar Chart a.k.a. Gantt chart (track progress, report to entireteam including stakeholders, control tool)

Network Diagram (to show task inter-dependencies, showproject organization, basis for project control) Milestone chart (report to Senior management, shows major

events)


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General Comments: To shorten project schedule examine the critical path

Crashing add more resources to the criticalpath tasks Usually results in increased cost

Fast Tracking performing tasks in parallel Can result in re-work and increased risk

Best to select method that has least impact on theproject (is the importance on cost, risk or schedule?)


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General Comments: Bar (Gantt) Charts

Weak Planning Tool, effective progress and reporting tool Does not show interdependencies of tasks Does not help organize the project more effectively

Network Diagrams (PERT, CPM, PDM)

Shows task interdependencies Aids in effectively planning and organizing work Provides a basis for project control

Milestone Charts Only shows major events Good for reporting to management and customer

Flow Charts

Depicts workflow and not commonly used for project management


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General Comments: Free Slack (Float) amount of time a task can be delayed

without delaying the early start date of its successor Total Slack (Float) amount of time a task can be delayed

without delaying the project completion date

Lag inserted waiting time between tasks Resource Leveling level peaks of resource usage; stable

number of resources allows schedule and cost slip in favor ofleveling resources


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What is Project Time

Management? Processes required to ensure timely completion of

the project. Major time management processes include:

Activity definition.

Activity sequencing. Activity resource estimating Activity duration estimating. Schedule development.

Schedule control..


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Types of Dependencies Mandatory dependencies:

Inherent in the nature of the work. Usually involve physical limitations. e.g. You cannot build the ceiling until walls of a

house are completed.

Discretionary dependencies: Defined by the project management team. Should be used with care and well documented

since they may limit later scheduling options. e.g. Best practices.

External dependencies: Involve a relationship between project activities

and non-project activities (i.e. Activities out ofscope for the project).

e.g. Dependency on the economy, environmentalfactors etc.


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Precedence Diagramming

Methods (PDM)

Uses nodes to represent the activities and connectsthem with arrows that show dependencies.

Includes four types of dependencies namely: Finish to start (most commonly used).

Finish to finish. Start to start. Start to finish.

Dummy activities not used. Does not allow loops or conditional branches.


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Arrow Diagramming Methods (ADM)

Method of constructing a project networkdiagram that uses arrows to represent theactivities and connects them at nodes to

show their dependencies. Uses only finish-to-start dependencies.

Dummy activities may be used.

Does not allow loops or conditionalbranches.


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Network Templates

Standardized networks used to expeditepreparation of project network diagrams.

Portions of a network are called subnets

or fragnets:Useful when project includes several

identical or close to identical features.


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Activity Duration Estimating

Process of taking information on projectscope and resources and then developingdurations for input to schedules.

Progressively elaborated. Requires consideration of elapsed time.


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Historical Information

Available from:Project files : records of previous

project results that are detailed enough

to aid in duration estimatesCommercial duration estimating

databases : this is available for

standard tasksProject team knowledge : individual

members of the project team may

remember previous actual or estimates


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Analogous Estimating (top-down

Estimating)

Uses the actual duration of a previous,similar activity as the basis for estimatingthe duration of a future activity.

Is a form of expert judgment. Most reliable when:

Previous activities are similar in fact

and not just in appearance. Individuals preparing the estimateshave the needed experience.


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Quantitatively based durations

Quantities to be performed for eachspecific work category is taken

It is then determined how many times the

work category is going to be performed inthe given activity

Time duration for the activity = number of

occurrences X duration of one activity


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Constraints Factors that will limit a management teams options. Two types of constraints are:

Imposed dates: Used to restrict the start or finish dates for the tasks. Most commonly used constraints are start no

earlier than and finish no later than. e.g. Market window on a technology project,

weather restrictions on outdoor activities,government mandated compliance etc.

Key events or major milestones: Completion of certain deliverables by specified

dates as requested by project sponsor, customer orother stakeholders.

Once scheduled, the milestones may be difficult tomove.


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Mathematical Analysis

Involves calculating theoretical early andlate start and finish dates.

Popular techniques: Critical path method (CPM):

Calculates a single deterministic early and late startand finish date for each activity based on specifiedsequential network logic and activity durationestimates.

Project evaluation and review technique(PERT): Uses a weighted average duration estimate to

calculate activity durations.


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Duration Compression

Special case of mathematical analysis Looks for ways to shorten the project

schedule without changing project scope

Techniques used: Crashing: in which cost and scheduletradeoffs are analyzed to determine how, if atall, to obtain the greatest amount of

compression for the least incremental cost Fast tracking: doing activities in parallel thatwould normally be done in sequence. Oftenresults in rework and increases risk


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Simulation

Involves calculating multiple projectdurations with different sets of activityassumptions

Common techniques:Monte Carlo analysis

What-if analysis (using logic network to

simulate different scenarios)


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Resource Leveling Heuristics

Done because mathematical analysis produces apreliminary early-start schedule that requires moreresources during certain time periods than are available.

e.g. Rule of thumb allocate scarce resources to criticalpath activities first.

Often results in a project duration that is longer than thepreliminary schedule. (Also called resource basedmethod).

Resource reallocation: used to bring the schedule backor as close as possible to the originally intendedduration.

Reverse resource allocation: if projects have a finite andcritical project resource, requiring that the resource bescheduled in reverse from the project ending date.

Critical chain: A technique that modifies the projectschedule to account for limited resources.


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Project Schedule

Includes at least planned start andexpected finish dates for each activity.Presented graphically using:

Project network diagramsBar charts and GANTT charts

Milestone charts


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Schedule Updates Any modification to the schedule information used to

manage a project. Schedule baseline: this is the approved project schedule

and is a component of the project plan. Provides the basisfor measuring and reporting schedule performance.

Revisions: special categories of schedule updates

because of scope/estimate changes. The schedulebaseline remains same, but start and end dates for someactivities may change.

Re-baselining: done if schedule delays are very severe used to provide realistic data to measure performance.(Done in only extreme cases, because all historical datawill be lost for the project schedule).

New target schedules: if there are small changes to theproject schedule, then the schedule baseline is keptconstant but new target schedules may be used.


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Project Time Management Planning

Project time management involves the processes required toensure timely completion of a project. The main planning tasksperformed as part of project time management are activitydefinition, activity sequencing, activity resource estimating, activityduration estimation, and schedule development.

Activity Definition: The project manager starts with the project charter and then

develops a project scope statement, WBS, WBS dictionary, projectmanagement plan and other related documents.

Creating the Activity List and Attributes:

The activity list is a tabulation of activities to be included on aproject schedule. The list should include the activity name, anactivity identifier or number, and a brief description of the activity.


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The activity attributes provide schedule related information abouteach activity, such as predecessors, successors, logicalrelationships, resource requirements, constraints, imposed dates,and assumptions related to the activity.

The activity list and activity attributes should be in agreement with

WBS and WBS dictionary The goal of activity list is to ensure that project team members are

in complete understanding of all activities necessary to completethe project

The WBS is often expanded during the activity definition process

as the project team members further define the activities requiredfor performing the work.


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The project team should review the activity list and attributes withkey stakeholders to avoid any mishap or unrealistic schedule whichmay delay overall project.

Creating a milestone list:

A milestone is a significant event on a project. It often take several

activities and a lot of work to complete a milestone, but milestone itself is like a marker to help in identifying necessary activities

Milestones are also useful tools for setting schedule goals andmonitoring progress, and project sponsors and senior managersoften focus on major milestones when reviewing projects.


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Activity Sequencing: Activity sequencing involves reviewing the activity list and

attributes, project scope statement, and milestone list to determinethe relationships or dependencies between activities.

It also involves evaluating the reasons for dependencies and the

different types of dependencies.A dependency or relationship relates to the sequencing of projectactivities or tasks. For example, does a certain activity have to befinished before another one can start? Can the project team doseveral activities in parallel?


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Three basic types of dependencies:1. Mandatory dependencies are inherent in the nature of the work

being performed on a project. They are sometime referred to asHard Logic because their relationships are unavoidable

2. Discretionary dependencies are defined by the project team.

For example, a project team might follow good practice and notstart detailed design work until key stakeholders sign off on all ofthe analysis work. Also known as soft logic

3. External dependencies involve relationships between projectand non project activities. The installation of new software might

depend on delivery of new hardware from an external supplier.


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NETWORK DIAGRAMS: Network diagrams are the preferred technique to show activity

sequencing.

A network diagram is a schematic display of the logicalrelationships among, or sequencing of, project activities

The format of network diagram uses the activity-on-arrow (AOA)approach, or the arrow diagramming method (ADM)

AOA network diagrams are generally easy to understand andcreate a different method is more commonly used: the precedencediagramming method. The precedence diagramming method

(PDM) is a network diagramming technique in which boxesrepresent activities.


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Four types of dependencies:In a project network, a dependency is a link amongst a project'sterminal elements.

1. Finish-to-start: a relationship in which the from activity must finishbefore the to activity can start. For example you cannot provide

training until after the training materials are available. Finish-to-start isthe most common type of relationship, or dependency, and AOAnetwork diagrams use only finish-to-start dependencies.

Task B cannot start until task A finishes, also known as (FS)

(Foundations dug) FS(Concrete poured)

A

B


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Finish Start - Relationship

I have two activities to complete in my project, which isto construct a wedding cake.

The activities are to make the cake and put on thefrosting. The finish start relationship says that I cannot

start putting the frosting on the cake until I have bakedthe cake layers.

Notice that I could, logically, put the frosting on any timeafter that. The relationship constricts the start of theactivity of frosting the cake to be no sooner than thefinish of baking the cake.


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2 Start-to -start: A relationship in which the from activity cannotstart until the to activity is started. For example, as soon as youstart a project review meeting, you can start documentingattendees, serving refreshments, taking minutes, and so on.

Task B cannot start until task A starts, also known as SS(Project work started) SS(Project management activities

started)

A

B


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Start Start Relationship

For example, using the above example of constructing awedding cake, I do not want to apply the frosting to the cake untilthe master chef is on scene. The two activities then are:

1. apply frosting to cake

2. Master chef supervises cake construction

The start-start relationship says that I cannot start putting thefrosting on the cake until I have the master chef present. Noticethat I could, logically, put the frosting on any time after that. Therelationship constricts the start of the activity of frosting the caketo be no sooner than the beginning of the master chef

supervising the cake construction.


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3 Finish-to finish: a relationship in which the from activity must befinished before the to activity can be finished. One task cannotbe finished until another finishes. For example, quality controlefforts cannot finish before production finishes, although bothactivities can be performed at the same time.

Task B cannot finish until task A finishes, also known as FF

(Last chapter written) FF(Entire book

written)

A

B


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Finish-Finish Relationship

For example, using the example of applying the frosting to thewedding cake, I must have the master chef there until thefrosting is complete so that he or she can approve it. The masterchef is then restricted from finishing the supervising activity untilthe frosting activity is finished. The two activities are:

1. Apply frosting to cake2. Master chef supervises cake construction

The finish finish relationship says that the master chef cannotfinish supervising the cake construction until the frosting iscompleted. Notice that I could, logically, have the master chef

continue supervising after that. The relationship constricts thefinish of the master chef supervising activity to be no soonerthan the finish of the frosting activity


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4 Start-to-finish: a relationship in which the from activity must startbefore the to activity can be finished. This type of activity is rarelyused, but it is appropriate in some cases. For example, anorganization might strive to stock raw material just in time for themanufacturing process to begin. A delay in the start of themanufacturing should delay completion of stocking the raw

material

Task B cannot finish until task A starts, also known as SF

(New shift started) SF (Previous shift finished)

A

B


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Start Finish Relationship

For an example, using the wedding cake example again, te

project is still to construct a wedding cake, and the activity is toapply the frosting to the cake. We do not want to finish applyingthe frosting to the cake until the master chef is on the scene. Thetwo activities then are:

1. Applying frosting to the cake

2. Master chef supervises cake constructionRemember that the start-start relationship says that I cannotstart putting the frosting on the cake until I have the master chefpresent. The start finish relationship says that I cannot startputting on the frosting on the cake until I have the master chef

present. The start finish relationship says that I can start puttingon the of the cake before the master chef is present, but I am notallowed to finish putting on the frosting until the master chef hasstarted supervising. The relationship constricts the finish of theactivity of frosting the cake to be no sooner than the beginning ofthe master chef supervising the cake construction.


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Activity Resource Estimating

The estimate of duration for each activity needs good idea ofquantity and type of resources (people, equipment and material)that will be assigned to each activity.

Important questions to answer in activity resource estimatingincludes:

1. How difficult will it be to do specific activities on the project?2. Is there any unique in the projects scope statement that will

affect resources?

3. Does the organization have appropriate people, equipment, andmaterials available for performing the work?

4. Does the organization need to acquire more resources for thisproject? Would it make sense to outsource some of the work?


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Activity Resource Estimating

Sample for ARE: Project name: Just-in-time Training Project

WBS item number: 3.1.2

WBS Name: Administer Survey

Description: Internal members of ourIT department will performthis task. The individual must be knowledgeable in using onlinesurvey software so that they can enter the actual survey into thissoftware. They must also know how to run a query to find the e-mail addresses of employees in purchasing, accounting,engineering, IT, sales, marketing, manufacturing, and HR

departments.


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Activity Duration Estimating

After working with key stakeholders to define activities, determinetheir dependencies, and estimate their resources, the next processin project time management is to estimate the duration of theactivities.

It is important to note that duration includes the actual amount of

time spent working on an activity plus elapsed time. The output of activity duration estimating include updates to the

activity attributes, if needed, and duration estimates for eachactivity. Duration estimates are provided as a discrete numbers,such four weeks, as a range, such as three to five weeks; or asthree point estimate.

Three point estimate is an estimate that includes an optimistic,most likely and pessimistic estimate.


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Schedule Development

Schedule development uses the results of all the preceding projecttime management processes to determine the start and end datesof project activities and of the entire project.

The ultimate goal of the schedule development is to create a

realistic project schedule that provides a basis for monitoringproject progress for the time dimension of the project.

Project manager must lead their teams in creating realisticschedules and then following them during project execution.


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PERT Estimations

Term Formula Used

PERT Value(Expected duration)

(Pessimistic+ 4*(Most Likely) + Optimistic)6

Standard Deviation(Sigma)

Pessimistic Optimistic

6

Variance (Standard Deviation)2

For more than one Tasks (e.g. for a project where all tasks lie on the critical path)

Term Formula UsedPERT Value Sum of PERT Values of individual

tasks

Standard Deviation Sum of Variances of all the tasks

Variance Sum of variances of all the tasks


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Correct Choice: 2

Justification: Activity Attributes: Attributes of the activities -including responsibility (i.e. who will perform the work), geographic area orbuilding (where the work has to be performed) and activity type (i.esummary or detailed) - are very important for further selection and sorting ofthe planned activities in a convenient way for the users. WBS classificationis also an important attribute that allows useful activity ordering and sorting.

PMBOK 2000 Page 74


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Project Management

PERT and CPMPERT: The program evaluation and review technique

along with CPM: Critical Path Method are two popular

quantitative analysis techniques that help managers

plan, schedule, monitor, and control large and complexprojects.

CPM also called critical path analysis is a network

diagramming technique used to predict total project

duration.


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Six Steps of PERT and CPM

1. Define the project and all of its significant activities or tasks2. Develop the relationships among the activities. Decide which

activities must precede others

3. Draw the network connecting all of the activities

4. Assign time and/or cost estimates to each activity

5. Compute the longest time path through the network; this iscalled the critical path

6. Use the network to help plan, schedule, monitor, and control theproject


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PERT Understanding

Almost any large project can be subdivided into a series ofsmaller activities or tasks that can be analyzed with PERT.When you recognize that projects can have thousands ofspecific activities, you see why it is important to be able toanswer such questions as the following:

1. When will the entire project be completed?

2. What are the critical activities or tasks in the project,that is, the ones that will delay the entire project ifthey are late?

3. Which are the non critical activities, that is, the onesthat can run late without delaying the entire projectscompletion?

4. What is the probability that the project will becompleted by a specific date?


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PERT

5. At any particular date, is the project on schedule,behind schedule , or ahead of project schedule?

6. On any particular date, is the money spent equal to,less than, or greater than the budgeted amount?

7. Are there enough resources available to finish theproject on time?

8. If the project is to be finished in a shorter amount oftime, what is the best way to accomplish this at theleast cost?


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General foundry example of PERT

General foundry, a metal works plant in Milwaukee,has been trying to avoid the expense of installing airpollution control equipment. The local environmentalprotection group has recently given the foundry 16weeks to install a complex air filter system on its mainsmokestack.

All the activities seem rather confusing and complexuntil they are placed in a network.

Activities and Immediate predecessors for General

foundry listed down for further action Total eight number of activities were found


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ACTIVITY/PREDECESSORS Table

Activity Description ImmediatePredecessors

A Build Internal Components -

B Modify Roof and Floor -C Construct Collection Stack A

D Pour concrete and install frame B

E Build high temperature burner C

F Install control system C

G Install air pollution device D, E

H Inspect and Test F, G


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Drawing the PERT Network

Once the activities have all been specified andmanagement has decided which activities mustprecede others, the network can be drawn.

There are two common techniques for drawing PERT

networks. The first is called activity-on-node (AON) andthe second one is called activity-on-arc (AOA).

In constructing an AON network, there should be onenode representing start of the project and one noderepresenting the finish of the project.


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Network for General foundry,Inc.


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Activity Times

The next step in the PERT procedure is to assign estimates of thetime required to complete each activity. This is usually given in units of weeks. Activity time estimates is not always an easy task, therefore it

needs historical data. Experts opinion etc. Due to uncertainty in activity times, the developers of PERT

employed a probability distribution based on three time timesestimates for each activity

PERT often assumes that time estimates follow the beta probabilitydistribution. It has been found to be appropriate for determining anexpected value and variance for activity completion times.


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Activity Times

Optimistic time (a) = time an activity will take if everything goes aswell as possible. There should be only a small probability (say,1/100) of this occurring.

Pessimistic time (b) = time an activity would take assuming veryunfavorable condition. There should also be only a smallprobability that the activity will really take this long.

Most likely time (m) = most realistic time estimate to complete theactivity

t = a + 4m + b/6


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Time Estimates

Activity Optimistic

(a)

Most probabl

(m)

Pessimistic

(b)

Expected tim

(t)

Variance

(b-a)/6^2

A 1 2 3 2 4/36

B 2 3 4 3 4/36

C 1 2 3 2 4/36

D 2 4 6 4 16/36

E 1 4 7 4 36/36

F 1 2 9 3 64/36

G 3 4 11 5 64/36

H 1 2 3 2 4/36


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How to find the Critical Path

The critical path is the longest time path route through thenetwork.

Any delay of an activity on the critical path will delay completionof the entire project

1. Earliest start time (ES); an activity can begin without violation of

immediate predecessor requirement2. Earliest finish time (EF); an activity can end

3. Latest start time (LS); an activity can begin without delaying theentire project

4. Latest finish time (LF); an activity can end without delaying the

entire project


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Box understanding

This box comprises of activity, duration (t) and timesalready explained

Activity t

ES EF

LS LF


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Calculation

Earliest Time: EF = ES + t Earliest start = largest of earliest finish times of

immediate predecessors

Start

A t=2ES=0 EF=0+2=2

B t=3ES=0 EF=0+3=3


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General Foundrys Network with expected Activity Times


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General Foundrys Earliest Start (ES) and Earliest Finish (EF) Times


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Latest Times

The next step in finding the critical path is to computethe latest start time (LS) and the latest finish time (LF)for each activity. This calculation is called as backwardpass.

Latest start time= latest finish time-activity time

LS = LF t

Latest finish time= smallest of latest start times foractivities


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Slack in Critical Path

When ES, LS, EF, and LF have been determined, it is a

simple matter to find the amount of slack time, or free time,that each activity has. Slack is the length of time an activitycan be delayed without delaying the whole project.

Slack = LS ES or slack = LF EF Critical activities have no slack time

In project management, float orslack is the amount oftime that a task in a project network can be delayed withoutcausing a delay to subsequent tasks (free float)

project completion date (total float)

An activity that has a total float equal to zero is said to be a'critical activity', which means that a delay in the finish timeof this activity will cause the entire project to be delayed bythe same amount of time. A critical activity typically hasfree float equal to zero, but an activity that has zero freefloat may not be on the critical path.


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Slack or Floats

Consider the process of replacing a broken pane of glass in the window of your home. There are variouscomponent activities involved in the project as a whole;obtaining the glass and putty, installing the new glass,choosing the paint, obtaining a tin of paint, painting thenew putty once it has set, wiping the new glass free of

finger smears etc. Some of these activities can run concurrently e.g.

obtaining the glass, obtaining the putty, choosing thepaint etc., while others are consecutive e.g. the paintcannot be bought until it has been chosen, the new puttycannot be painted until the window is installed and thenew putty has set. Delaying the acquisition of the glassis likely to delay the entire project - this activity will be onthe critical path and have no float, of any sort, attachedto it and hence it is a 'critical activity'.


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A relatively short delay in the purchase of the paint maynot automatically hold up the entire project as there isstill some waiting time for the new putty to dry before itcan be painted anyway - there will be some 'free float'

attached to the activity of purchasing the paint andhence it is not a critical activity. However a delay in choosing the paint in turn inevitably

delays buying the paint which, although it may notsubsequently mean any delay to the entire project,

does mean that choosing the paint has no 'free float'attached to it - despite having no free float of its ownthe choosing of the paint is involved with a path throughthe network which does have 'total float'.

Slack or Floats


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General foundrys Latest Start (LS) and Latest Finish (LF) Times


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Schedule and Slack times

activity ES EF LS LF Slack On Critical

Path

A 0 2 0 2 0 Yes

B 0 3 1 4 1 No

C 2 4 2 4 0 Yes

D 3 7 4 8 1 No

E 4 8 4 8 0 Yes

F 4 7 10 13 6 No

G 8 13 8 13 0 Yes

H 13 15 13 15 0 Yes


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General Foundrys Critical Path (A-C-E-G-H)


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Probability of Project Completion

The critical path analysis helped us determine thatfoundrys expected project completion time is 15 weeks.If the project is not completed in 16 weeks, Generalfoundry will be forced to close by environmentcontrollers (legal requirement). On the basis of thisrequirement any variation in critical path may affect the

completion of project on time. PERT uses the variance of critical path activities to help

determine the variance of the overall project. If theactivity times are statistically independent, the projectvariance is computed by summing the variances of thecritical activities


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Project Completion Probability

Project variance = variances of activities on criticalpath

Project variance= 4/36+4/36+36/36+64/36+4/36=3.111

Project standard deviation = = project variance

Project standard deviation = 3.111 = 1.76 weeks How can this information be used to help answer

questions regarding the probability of finishing theproject on time?

Assume that the total project completion time follows anormal probability distribution.


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Standard Deviation=1.76 Weeks

15 Weeks

(Expected Completion Time)


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Project Completion Probability

To find the probability that this project will be finished on or before the 16week deadline, we need to determine the appropriate area under thenormal curve.

Z = due date expected date of completion/ Z = 16 weeks 15weeks/1.76 weeks Z = 0.57

Where Z is the number of standard deviations the due date or target datelies from the mean or expected date. From normal table we can find the value of Z Value of Z is 0.71566, there is a 71.6% chance that the pollution control

equipment can be put in place in 16 weeks or less.


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Probability of Meeting 16-Weeks Deadline

15

Weeks

Expected Time is 15 Weeks .57 Standard Deviation

Probability(T 16 Weeks)is 71.6%

16

Weeks


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What PERT was able to Provide

1. The projects expected completion date is 15 weeks2. There is a 71.6% chance that the equipment will be in placewithin 16-week deadline.

3. Five activities (A, C, E, G, H) are on the critical path. Any delayon this path will delay entire project

4. Three activities (B, D, F) are not critical but have some slacktime built in. this means that resources can be borrowed withoutdisturbing entire project completion time.

5. A detailed schedule of activity starting and ending dates hasbeen made available.


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PERT/COST

PERT is an excellent method of monitoring and controllingproject length, it does not consider another very important

factor, project cost. PERT/COST is a modification of PERT

that allows a manager to plan, schedule, monitor, and

control cost as well as time.

Budgeting process of a project

Four steps of the budgeting process:

1. Identify all costs associated with each of the activities.

Then add these costs together to get one estimated cost or

budget for each activity

2. If you are dealing with large project, several activities can

be combined into larger work packages. A work package issimply a logical collection of activities

C


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Project Cost Monitoring

3 Covert the budgeted cost per activity into a cost per time period. To do this, weassume that the cost of completing any activity is spent at a uniform rate overtime. Thus, if the budgeted cost for a given activity is $48,000 and the activitysexpected time is four weeks, the budgeted cost per week is $12,000 (=$48000/4weeks)

4 Using the earliest and latest start times, find out how much money should bespent during each week or month to finish the project by the date desired.

B d t f G l F d


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Budget for General Foundry

Gantt Chart for General Foundry

1 2 3 4 5 6 7 8 9 10 11 12 13 14

A

B

CD

E

F

G

H



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Activity Earliest StartTime ES

Latest startTime LS

Expected Time, t Total Budgeted cost Budgeted cost perweek ($)

A 0 0 2 22000 11000

B 0 1 3 30000 10000

C 2 2 2 26000 13000

D 3 4 4 48000 12000

E 4 4 4 56000 14000

F 4 10 3 30000 10000

G 8 8 5 80000 16000

H 13 13 2 16000 8000



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The weekly budget for the project is developed from the previous data. The earlieststart time for activity A, for example is 0. Because A takes 2 weeks to complete, isweekly budget of $11,000 should be spent in weeks 1 and 2. Similar calculation isvalid for all activities as per Gantt chart and earliest start time.

The weekly budgeted cost as per activities duration is very simple to perform.

B d t d C t


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Budgeted Cost

Budgeted Cost ES

activity

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total

A 11 11 22

B 10 10 10 30

C 13 13 26D 12 12 12 12 48

E 14 14 14 14 56

F 10 10 10 30

G 16 16 16 16 16 80

H 8 8 16

total 308

total/wk

21 21 23 25 36 36 36 14 16 16 16 16 16 8 8

total 21 42 65 90 126 162 198 212 228 244 260 276 292 300 308

B d t d C t


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Budgeted Cost

Budgeted Cost LS

activity

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total

A 11 11 22

B 10 10 10 30

C 13 13 26D 12 12 12 12 48

E 14 14 14 14 56

F 10 10 10 30

G 16 16 16 16 16 80

H 8 8 16

total 308

total/wk

11 21 23 23 26 26 26 26 16 16 26 26 26 8 8

total 11 32 55 78 104 130 156 182 198 214 240 266 292 300 308

Monitoring and Controlling Project Costs


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The purpose of monitoring and controlling projects costs is to ensure that theproject is progressing on schedule and that cost overruns are kept to a minimum.The status of entire project should be checked periodically.

Having same project with additional information after starting the project andstanding in sixth week of the 15-week project. Activities A, B, and C have beenfinished. These activities incurred costs of $20,000, $36,000 and $26,000respectively. Activity D is only 10% completed and so far the cost expended has

been $6000. Activity E is 20% completed with an incurred cost of $20,000, andactivity F is 20% completed with an incurred cost of $4,000. activities G and H havenot been started. Check for Overrun?



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Monitoring and controlling project costs:

Activity Total budgeted cost($)

Percent of completion Value of workcompleted ($)

Ac tual Cost ($) Activity Di fference ($)

A 22,000 100 22,000 20,000 -2,000

B 30,000 100 30,000 36,000 6,000

C 26,000 100 26,000 26,000 0

D 48,000 10 4,800 6,000 1200

E 56,000 20 11,200 20,000 8800

F 30,000 20 6,000 4,000 -2,000

G 80,000 0 0 0 0

H 16,000 0 0 0 0

Total 100,000 112,000 12,000 overrun

Class Seven-Time Mgt

Documents

Transcript of Class Seven-Time Mgt