Project ManagementChapter 3

BUSI 2106 – Operations Management

Projects and Project Management

• What is a project?• What is project management?• Why is project management so important?• What three basic activities are in project management?

Projects and Project Management

• What is a project?• A “unique event” with a unique goal• With a start, end, work, inputs and outputs.• Work, outside of the defined production system

• What is project management entail?• Planning – activities to be done• Scheduling - work• Controlling – resources

Projects and Project Management

Projects and Project Management

• Why is project management so important?• Projects can be complex• The track record for project success is actually low• (at cost, on time, to spec)• Must coordinate resources across functional lines

Planning

• Work Breakdown Structure (WBS) – hierarchical representation of project work, broken down into individual activities

Scheduling

• Gantt chart – shows sequences of activities, start and end dates.

Controlling

• Controlling Costs and Time• Use of software• Microsoft Project• Fast Track• MacProject• OpenWorkBench

PERT/CPM

• Diagram Representation of a project, its activities and sequence• Six Steps

1. Define Project, Build WBS2. Develop sequences – what tasks must be complete before another one

starts3. Draw network diagram connecting all activities4. Assign time and cost estimates for each activity5. Compute critical path

1. Why is it critical?6. Use the diagram to help plan, schedule, monitor, etc.

PERT/CPM: Step 2

• Develop sequences

PERT/CPM: Step 3

• Draw network diagram

PERT/CPM: Step 4

• Assign time and cost

PERT/CPM: Step 5

• Compute critical path• Substeps

1. Forward Pass: Assign earliest start (ES) and earliest finish (EF) to each activity

2. Backward Pass: Assign latest finish (LF) and latest start (LS) to each activity3. Calculate slack time for each activity4. Identify critical path activities (activities where slack = 0)

PERT/CPM: Step 5

• Page 70 (the one with the transparencies)

Variability in Activity Times

• Many techniques to make more accurate estimations• Three time estimates (optimistic (a), pessimistic (b), most likely (m))• Time = (a + 4m + b)/6• Variance = ([b + a]/6)^2

Probability of Project Completion

• When you need to know the probability that a project will be completed at/before a certain time

Probability of Project Completion

• “what is the probability that my this project, estimated to be finished in 15 weeks, will be complete in under 16 weeks?”• Find the z-score of 16 weeks

Project Crashing

• Sometimes you need to add extra resources to speed up• Steps

1. Compute crash cost per time pd (week, day, etc) for each activity2. Find critical path3. On critical path, select the activity with the smallest crash cost.

1. Crash this activity by one pd2. May need to check other activities on other critical paths

4. Update all activity times. Repeat from step 2 if needed.

Project Management Software – MS Project

Project Management Software – MS Project