Introduction What – Project Management Where – Where the success or
failure of a project will have major consequences for the company
Why – At some point every company takes on large and complicated projects – opening a new store, building a plant, developing a product
Project Management What is at stake? Large projects, outside of normal
production Cost overruns Late completion – penalties Early completion – bonuses
Project Planning Planning Task Work Breakdown Structure Determines gross requirements for
people, supplies and equipment
Example Level 1 Open a new Retail Outlet 2 Select Location 2 Refurbish Location 3 Signage 4 Install new sign 3 Displays 4 Install racks 4 Install Mannequins
Project Controlling Monitor resources, costs, quality,
and budgets Use feedback to revise project plan
PERT and CPM Program Evaluation and Review
Technique Critical Path Method Schedule, monitor and control
large projects
PERT and CPM Framework Define project Develop relationships among activities Draw network connecting activities Assign time / cost estimates to each
activity Compute longest time path through
network – the critical path Use network to plan, schedule, monitor,
control project
PERT Symbols
224 Years4 Years
Activity (Arrow)Activity (Arrow)
RegisterRegister Receive diplomaReceive diploma
Project: Obtain a college degree (B.S.)Project: Obtain a college degree (B.S.)
Event (Node)Event (Node)
Attend class, Attend class, study etc.study etc.
11
Event (Node)Event (Node)
PERT Symbols
11 44
22
33
AA
BB
CC
A must be done before A must be done before C & D can beginC & D can begin DD
PERT Symbols
11 44
22
33
AA
BB EE
CC
B & C must be done B & C must be done before E can beginbefore E can begin
DD
Activity Time Estimates Optimistic Time (a) Most Likely Time (m) Pessimistic Time (b) Beta distribution Expected Time t = (a + 4m + b) /
6 Variance v = [(b – a)/6]2
Critical Path Analysis ES – Earliest Start Time LS – Latest Start Time EF – Earliest Finish LF – Latest Finish S – Slack Time – LS – ES Critical Path – Group of activities in the
project that have a slack time of zero T – total project completion time V – total variance of activities on the critical
path
Project Crashing Crashing – shorten activity time by
adding resources Can be expensive – may be less
expensive than cost penalties
PERT Advantages Useful at several stages, especially
scheduling and control Not mathematically complex Graphical display show relationships Critical path pinpoints activities to closely
monitor Documents who is responsible for each
activity Applicable to a wide range of industries Monitors schedules and costs
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