MBA782.Proj.Mgmt.A CAJ8.03.1
• Definition of Project Management
• Work Breakdown Structure
• Project Control
• Organizational Structures
• Critical Path Scheduling– CPM with a Single Time– CPM with Three Activity Time Estimates
Operations Management
Project Management
MBA782.Proj.Mgmt.A CAJ8.03.2
Project Management
• Project
– series of _______ jobs usually directed toward some
________ output and requiring a ______________ period of time to perform.
• Project Management
– planning, directing, and controlling __________ (people, equipment, material) to meet the technical, cost, and time ______________ of the project.
MBA782.Proj.Mgmt.A CAJ8.03.3
• Construction of a new building
• Installing a large computer system
• Introducing a new product
• Hosting a business conference
• Moving a department to a new building
• Earning a graduate degree
Project Management
Examples
MBA782.Proj.Mgmt.A CAJ8.03.4
Work Breakdown Structure
Program
Project 1 Project 2
Task 1.1
Subtask 1.1.1
Work Package 1.1.1.1
Level
1
2
3
4
Task 1.2
Subtask 1.1.2
Work Package 1.1.1.2
MBA782.Proj.Mgmt.A CAJ8.03.5
Work Breakdown Structure
• Allow the elements to be worked on _______________
• Make them ________________ in size
• Give _____________ to carry out the program
• Monitor and ____________ the program
• Provide the required _____________
MBA782.Proj.Mgmt.A CAJ8.03.6
Organizational StructurePure Project--Advantages
• The project manager has ______ authority over the project
• Team members report to ______ boss
• Shortened communication lines
• Team pride, motivation, and commitment are _____
MBA782.Proj.Mgmt.A CAJ8.03.7
Organizational StructurePure Project--Disadvantages
• Duplication of resources
• Organizational goals and policies are ___________
• ______ of technology transfer
• Team members have no functional area ”_______ "
MBA782.Proj.Mgmt.A CAJ8.03.8
Functional Project
President
Research andDevelopment
Engineering Manufacturing
ProjectA
ProjectB
ProjectC
ProjectA
ProjectB
ProjectC
ProjectA
ProjectB
ProjectC
MBA782.Proj.Mgmt.A CAJ8.03.9
Organizational StructureFunctional Project--Advantages
• A team member can work on ___________ projects
• Technical expertise is _________________ within the functional area
• The functional area is a ______ after the project is completed
• Critical mass of specialized knowledge
MBA782.Proj.Mgmt.A CAJ8.03.10
Organizational StructureFunctional Project--Disadvantages
• Aspects of the project that are not directly related to the functional area get ____________________
• Motivation of team members is often __________ .
• Needs of the client are __________________ and are responded to slowly
MBA782.Proj.Mgmt.A CAJ8.03.11
Matrix Project
President
Research andDevelopment
Engineering Manufacturing Marketing
ManagerProject A
ManagerProject B
ManagerProject C
MBA782.Proj.Mgmt.A CAJ8.03.12
Organizational StructureMatrix--Advantages
• Enhanced inter-functional communications
• Pinpointed responsibility
• Duplication of resources is _________________
• Functional ________ for team members
• Policies of the parent organization are ______________
MBA782.Proj.Mgmt.A CAJ8.03.13
Organizational StructureMatrix--Disadvantages
• _______ _________
• Depends on PM’s ___________________ skills
• Potential for sub-optimization
MBA782.Proj.Mgmt.A CAJ8.03.14
• Program evaluation and review technique (PERT)
– network technique typically used to scheduleR & D projects.
– developed by U.S. Navy Special Projects Office (1958) for the Polaris missile project
– uses ______________ activity time estimates to control time aspects.
– usually illustrated with __________________ (AOA) technique.
Project Management
Network Planning Methods
MBA782.Proj.Mgmt.A CAJ8.03.15
• Critical Path Method (CPM)
– Network technique typically used to schedule maintenance shutdowns of chemical processing plants
– J. E. Kelly of Remington-Rand and M. R. Walker of Du Pont (1957)
– uses _________________ time estimates to control both time and costs.
– usually illustrated with _________________ (AON) technique
Project Management
Network Planning Methods
MBA782.Proj.Mgmt.A CAJ8.03.16
• Activity
– the ______________ unit of effort that the project manager can schedule and control
• Precedence Relationship
– a sequencing __________ between related activities.
– it states that one activity cannot start until a preceding activity has been ___________.
Project Management
Network Analysis Terms
MBA782.Proj.Mgmt.A CAJ8.03.17
• Precedence Diagram
– a network diagram representation of sequencing relationships
• Critical Path
– the sequence of activities that determines the __________ possible time for completing a project
• Crashing
– analyzing time versus cost ___________ for speeding up individual activities in the project
Project Management
Network Analysis Terms
MBA782.Proj.Mgmt.A CAJ8.03.18
• Describe the project
– activities
– immediate predecessors
– time estimates
• Diagram the network
• Estimate the time of completion
• Analyze the model
Project Management
Steps in Network Planning
MBA782.Proj.Mgmt.A CAJ8.03.19
• Nodes (circles) and arcs (arrows)
• Activity on Arc
– arcs are _________ and nodes are _______– event oriented - any point at which one or more
activities are to be completed and one or more other activities are to begin
– event consumers no time or resources
• Activity on Node
– nodes are ____________ and arcs show
_____________ relationships
– activity oriented
Network Planning
Diagram the Network
MBA782.Proj.Mgmt.A CAJ8.03.20
Activity Relationship:
S precedes T, which precedes U.
AOA AON
1 2S
3T
4U
S T U
Network Planning
Diagram the Network
MBA782.Proj.Mgmt.A CAJ8.03.21
Activity Relationship:
S and T must be completed before U can be started.
AOA AON
S
T
U
1
2
3T
S
4U
Network Planning
Diagram the Network
MBA782.Proj.Mgmt.A CAJ8.03.22
Activity Relationship:
T and U cannot begin until S has been completed.
AOA AON
T
U
S
3
4
1
T
U2S
Network Planning
Diagram the Network
MBA782.Proj.Mgmt.A CAJ8.03.23
• Earliest finish time
– the earliest start time _____ the time, t, needed to complete the activity
EF = ES + t
• Earliest start time
– the earliest possible time an activity can begin
without ___________ any precedence restrictions
ES = Max [EF times of all immediately preceding activities]
Network Planning
Estimate Completion Time
MBA782.Proj.Mgmt.A CAJ8.03.24
• Latest start time
– the latest finish time ________ the time, t, required for the activity
LS = LF - t
• Latest finish time
– the latest time an activity an activity can end without ___________ the overall completion of the project.
LF = Min [LS times for all immediately following activities]
Network Planning
Estimate Completion Time
MBA782.Proj.Mgmt.A CAJ8.03.25
• Forward pass
– determining the ES and EF dates for each activity, and the _____________ possible completion date for the project.
• Backward pass
– determining the LS and LF dates for each activity to ensure that the project ________ the earliest completion date set by the forward pass
Network Planning
Estimate Completion Time
MBA782.Proj.Mgmt.A CAJ8.03.26
• Activity slack (SLACK)
– the maximum time the start of an activity can be ___________ without delaying the entire project
– the critical path is also the sequence of activities with _______ slack.
SLACK = LS - ES = LF - EF
• Critical Path
– the sequence of activities between the start and finish of a project that takes the __________ time to complete
Network Planning
Estimate Completion Time
MBA782.Proj.Mgmt.A CAJ8.03.27
Consider the following pipeline project:
Network Planning
Diagram the Network
Develop a critical path diagram and determine theduration of the critical path and slack times for allactivities ....
Activity DesignationImmediate
PredecessorTime
(weeks)Buy pipe A none 6Dig ditch B none 10Buy hydrants C none 17Lay pipe D A, B 8Install hydrants E C, D 4
MBA782.Proj.Mgmt.A CAJ8.03.28
Keep the following points in mind when constructing a network diagram:
• Always have _________ and _________ nodes.
• Avoid __________ paths to keep the diagram simple
• Use only one arrow to directly connect any two nodes
• Put activities with no predecessors at the left and
point the arrows from ______ to right.
• Be prepared to _________ the diagram several times before you create a correct and uncluttered diagram
Network Planning
Diagram the Network
MBA782.Proj.Mgmt.A CAJ8.03.30
ES, EF, LS, LF, and SLACKs:
Network Planning
Diagram the Network
Activity ES EF LS LF SLACKABCDE
Critical Path: ___________
Completion Time: _______
MBA782.Proj.Mgmt.A CAJ8.03.33
• What is the probability that the project will be completed by the deadline?
• Address _________________ cause by labor shortages, weather, supply delays, or accidents.
• Completion time with a set amount of risk
• Use ________________ time estimates to incorporate uncertainty into the network model.
Project Management
Probabilistic Time Estimates
MBA782.Proj.Mgmt.A CAJ8.03.34
Activity times are stated in terms of three reasonable time estimates:
• _________________ time (a): - shortest time an activity can be completed
• _________________ time (m): - best estimate of average time
• _________________ time (b): - longest time an activity can take
Project Management
Probabilistic Time Estimates
MBA782.Proj.Mgmt.A CAJ8.03.35
• Activity’s mean time (te)
and variance (2) with beta distribution
Project Management
Probabilistic Time Estimates
Meanma b Time
MBA782.Proj.Mgmt.A CAJ8.03.36
Probabilistic Time Estimates
Calculating Time Statistics
6
)4( bmate
22
6
ab
e
Activity (a) (m) (b) te 2
A 2 5 14B 6 8 22C 7 15 35D 5 8 11E 3 4 5
MBA782.Proj.Mgmt.A CAJ8.03.37
If the random variable xi has:
Mean = i
Variance = i2
the total T of n independent observations of xi is
T = x1 + x2 + ... + xn , and is
NORMALLY DISTRIBUTED with
_______ of T = 1 + 2 + ... + n
__________ of T = 12 + 2
2 + ... + n2
Probabilistic Time Estimates
Central Limit Theorem Corollary
-3 -2 -1 1 2 3
MBA782.Proj.Mgmt.A CAJ8.03.38
Probabilistic Time Estimates
Path B - D - E Time Estimate
)()()()( EDBBDE tEtEtEtE
2222
EDBBDE
-3 -2 -1 1 2 3
Activity (a) (m) (b) te 2
B 6 8 22 10.00 7.11D 5 8 11 8.00 1.00E 3 4 5 4.00 0.11
MBA782.Proj.Mgmt.A CAJ8.03.39
Exercise # 1a
What is the probability that the project duration 25 days?
tTE = 22
p(t < D)
D=____
= Z
P ( z _____ ) = ________ , or 85.31 %
MBA782.Proj.Mgmt.A CAJ8.03.40
Exercise # 1b
What is the probability that the project duration > 25 days?
tTE = 22
p(t < D)
D=25
=T - D
= Z2
cp
E
P ( z > 1.05) = _____ - _________, or 14.69 %
MBA782.Proj.Mgmt.A CAJ8.03.41
Exercise # 2
What is the probability of finishing this project in 21 days?
tTE = 22
D= ____
=T - D
= Z2
cp
E
p(t < D)
P( z - 0.348) = ___ - ________ = 0.3632, or 36.3 %
MBA782.Proj.Mgmt.A CAJ8.03.42
Probabilistic Time Estimates
All Path Time Estimates
Probability of completion in 25 days or less
Activity (a) (m) (b) t e s 2
A 2 5 14 6.00 4.00B 6 8 22 10.00 7.11C 7 15 35 17.00 21.78D 5 8 11 8.00 1.00E 3 4 5 4.00 0.11
Path E(tp) 2 z P(z Z)B-D-E 22 7.11+1.00+0.11 = 8.22 2.87 1.05 0.8523A-D-E 18 4.00+1.00+0.11 = 5.11 2.26 3.10 0.9990
C-E 21
MBA782.Proj.Mgmt.A CAJ8.03.43
Probability ofCompleting =Project in25 days or less
Probabilistic Time Estimates
Completion in 25 Days or Less
ProbabilityAll Paths< 25 days
)25()25()25()25( CEPADEPBDEPDP
E T p = 2 2
p = 2 .8 7
BDE
10 20 30 40
E T p = 1 8
p = 2 .2 6
ADE
10 20 30 40
E T p = 2 1
p = 4 .0 1
CE
10 20 30 40
D = 25
Path E(t p ) s p z P(z <= Z)B-D-E 22 2.87 1.05 0.8523 A-D-E 18 2.26 3.10 0.9990
C-E 21 4.68 0.85 0.8037
MBA782.Proj.Mgmt.A CAJ8.03.44
P( C-E 25 days) = ________P( B-D-E 25 days) = ________
• The probability of non-critical path C E being
completed in 25 days or less is ____________ the probability of critical path B D E being completed in 25 days.
• It is possible for the non-critical path to have
_____ likelihood of being completed than the critical path.
• What does this mean?....
Project Management
Probabilistic Time Estimates
MBA782.Proj.Mgmt.A CAJ8.03.45
• Projects will probably be ______ relative to the deterministic critical path
• Network simulation is not worth the additional expense
• Use deterministic time estimates
• Look at path _______________ .
• Intensively manage critical and non-critical activities that are _________ to critical times
Project Management
Probabilistic Time Estimates
Schonberger, R.J., “Why Projects are Always Late: A Rationale Based on Manual Simulation of a PERT/CPM Network.” Interfaces, Oct. 1981.
MBA782.Proj.Mgmt.A CAJ8.03.46
• Activities have a clear beginning and end
– __________ ______ _______
• Sequential relationships can be specified and networked
– ordering may be ________________ (contingencies)
• Focus on the critical path
– not always true - “ _______ ” critical path
• Beta distribution
– 10% error; 5% variance; arriving at “ _____ ” activity time
• Can cost 2 - 5 % of total project cost
– benefit from ___________ scheduling and ___________ project time
Project Management
Cautions on PERT and CPM
MBA782.Proj.Mgmt.A CAJ8.03.47
• Importance of ________________
– Clearly identifying project ____________________
– Simple and timely progress _____________ system
– good ___________-management practices
• Why do projects _______ ?
– _________________ Planning
– ________ of top management commitment
– _____________ of talented project manager
Project Management
Conclusions
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