ch3 proj.mgt

47
1 Project Management

Upload: abhilash-babu

Post on 14-Nov-2014

260 views

Category:

Education


1 download

DESCRIPTION

 

TRANSCRIPT

Page 1: Ch3 proj.mgt

1

Project Management

Page 2: Ch3 proj.mgt

2

Definition of Project Management Work Breakdown Structure Project Control Charts Structuring Projects Critical Path Scheduling

OBJECTIVES

Page 3: Ch3 proj.mgt

3

Project is a series of related jobs usually directed towards some major output and requiring a significant period of time to perform

Project Management are the management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project

Project Management Defined

Page 4: Ch3 proj.mgt

4

Introduction to Project Management

Definition of Project Management– A project can be defined as a group of tasks – which helps in

achieving an objective – A Project : undertaken to solve a problem.– Project Management – the process of planning, directing and

controlling resources to meet the technical, cost and time considerations of a project.

– Project Management – as a Conversion Process.

Page 5: Ch3 proj.mgt

5

The Definition of a “PROJECT”

• Purpose – Usually a one-time activity with a well-defined set of desired end result.

• Life Cycle- From a slow beginning they progress to a buildup of size, then peak, finally terminate.

• Interdependencies- Projects always interact with the parent organization’s standard, ongoing operations.

• Uniqueness - Every Project has some elements that are unique. (No two Construction or R & D projects are precisely alike.)

Page 6: Ch3 proj.mgt

6

Project Vs. Routine Activities

Project is a one time activity It involves large investments No revenue till the project is completed High degree & Wide variety of skills are used. Involves experts from various divisions of the company,

consultants & a number of contractors. A systematic approach to problem solving – special

techniques used. Usage of special purpose equipments – in some cases Deals with planning, scheduling, controlling simuttaneously

with the objective of timely completion of the project.

Page 7: Ch3 proj.mgt

7

Structuring Projects / Pure Project: Advantages

Pure ProjectA pure project is where a self-contained team works full-time on the project

The project manager has full authority over the project

Team members report to one boss Shortened communication lines Team pride, motivation, and commitment

are high

Page 8: Ch3 proj.mgt

8

Structuring Projects / Pure Project: Disadvantages

Duplication of resources Organizational goals and policies

are ignored Lack of technology transfer Team members have no functional

area "home"

Page 9: Ch3 proj.mgt

9

Functional Project

President

Research andDevelopment

Engineering Manufacturing

ProjectA

ProjectB

ProjectC

ProjectD

ProjectE

ProjectF

ProjectG

ProjectH

ProjectI

A functional project is housed within a functional division

Example, Project “B” is in the functional area of Research and Development.

Example, Project “B” is in the functional area of Research and Development.

Page 10: Ch3 proj.mgt

10

Structuring Projects Functional Project: Advantages

A team member can work on several projects

Technical expertise is maintained within the functional area

The functional area is a “home” after the project is completed

Critical mass of specialized knowledge

Page 11: Ch3 proj.mgt

11

Structuring Projects Functional Project: Disadvantages

Aspects of the project that are not directly related to the functional area get short-changed

Motivation of team members is often weak

Needs of the client are secondary and are responded to slowly

Page 12: Ch3 proj.mgt

12

Matrix Project / Organisation Structure

President

Research andDevelopment

Engineering Manufacturing Marketing

ManagerProject A

ManagerProject B

ManagerProject C

Page 13: Ch3 proj.mgt

13

Structuring Projects / Matrix: Advantages

Enhanced communications between functional areas

Pinpointed responsibility

Duplication of resources is minimized

Functional “home” for team members

Policies of the parent organization are followed

Page 14: Ch3 proj.mgt

14

Structuring Projects /Matrix: Disadvantages

Too many bosses

Depends on project manager’s negotiating skills

Potential for sub-optimization

Page 15: Ch3 proj.mgt

15

Gantt Chart

Activity 1Activity 2Activity 3Activity 4Activity 5Activity 6

Time

Vertical Axis: Always Activities or Jobs

Vertical Axis: Always Activities or Jobs

Horizontal Axis: Always TimeHorizontal Axis: Always Time

Horizontal bars used to denote length of time for each activity or job.

Horizontal bars used to denote length of time for each activity or job.

Page 16: Ch3 proj.mgt

16

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

A work breakdown structure defines the hierarchy of project tasks, subtasks, and work packages

Page 17: Ch3 proj.mgt

17

Network Diagrams

1/2/3/4/5 are EventsA/B/C/D/E are Activities.

Page 18: Ch3 proj.mgt

18

Network Diagrams

Page 19: Ch3 proj.mgt

19

Network-Planning Models

A project is made up of a sequence of activities that

form a network representing a project

The path taking longest time through this network of

activities is called the “critical path”

The critical path provides a wide range of scheduling

information useful in managing a project

Critical Path Method (CPM) helps to identify the

critical path(s) in the project networks

Page 20: Ch3 proj.mgt

20

Prerequisites for Critical Path Methodology

A project must have:

well-defined jobs or tasks whose completion marks the end of the project;

independent jobs or tasks;

and tasks that follow a given sequence.

Page 21: Ch3 proj.mgt

21

Types of Critical Path Methods

CPM with a Single Time Estimate– Used when activity times are known with certainty– Used to determine timing estimates for the project,

each activity in the project, and slack time for activities

CPM with Three Activity Time Estimates– Used when activity times are uncertain – Used to obtain the same information as the Single

Time Estimate model and probability information Time-Cost Models

– Used when cost trade-off information is a major consideration in planning

– Used to determine the least cost in reducing total project time

Page 22: Ch3 proj.mgt

22

Steps in the CPM with Single Time Estimate

1. Activity Identification 2. Activity Sequencing and Network

Construction 3. Determine the critical path

– From the critical path all of the project and activity timing information can be obtained

Page 23: Ch3 proj.mgt

23

CPM with Single Time Estimate

Consider the following consulting project:

Activity Designation Immed. Pred. Time (Weeks)Assess customer's needs A None 2Write and submit proposal B A 1Obtain approval C B 1Develop service vision and goals D C 2Train employees E C 5Quality improvement pilot groups F D, E 5Write assessment report G F 1

Develop a critical path diagram and determine the duration of the critical path and slack times for all activities.

Page 24: Ch3 proj.mgt

24

First draw the network

A(2) B(1) C(1)

D(2)

E(5)

F(5) G(1)

A None 2

B A 1

C B 1

D C 2

E C 5

F D,E 5

G F 1

Act. Imed. Pred. Time

Page 25: Ch3 proj.mgt

25

Determine early starts and early finish times

ES=9EF=14

ES=14EF=15

ES=0EF=2

ES=2EF=3

ES=3EF=4

ES=4EF=9

ES=4EF=6

A(2) B(1) C(1)

D(2)

E(5)

F(5) G(1)

Hint: Start with ES=0 and go forward in the network from A to G.

Hint: Start with ES=0 and go forward in the network from A to G.

Page 26: Ch3 proj.mgt

26Determine late starts and

late finish times

ES=9EF=14

ES=14EF=15

ES=0EF=2

ES=2EF=3

ES=3EF=4

ES=4EF=9

ES=4EF=6

A(2) B(1) C(1)

D(2)

E(5)

F(5) G(1)

LS=14LF=15

LS=9LF=14

LS=4LF=9

LS=7LF=9

LS=3LF=4

LS=2LF=3

LS=0LF=2

Hint: Start with LF=15 or the total time of the project and go backward in the network from G to A.

Hint: Start with LF=15 or the total time of the project and go backward in the network from G to A.

Page 27: Ch3 proj.mgt

27

Critical Path & Slack

ES=9EF=14

ES=14EF=15

ES=0EF=2

ES=2EF=3

ES=3EF=4

ES=4EF=9

ES=4EF=6

A(2) B(1) C(1)

D(2)

E(5)

F(5) G(1)

LS=14LF=15

LS=9LF=14

LS=4LF=9

LS=7LF=9

LS=3LF=4

LS=2LF=3

LS=0LF=2

Duration=15 weeks

Slack=(7-4)=(9-6)= 3 Wks

Page 28: Ch3 proj.mgt

28

Program Evaluation & Review Technique (PERT)

PERT is Event oriented & CPM is Activity oriented. PERT is used to deal unit uncertainty. PERT has 3 time estimates – Optimistic time

– Most likely time. – Pessimistic time.

PERT has one or more activities follow a probability distribution – taking into account the uncertainty of the situation.

PERT network provides a measure of the probability of project completion by the scheduled date.

The probability concept – Only associated with PERT and not CPM.

(time estimates in CPM are deterministic & not

probabilistic)

Page 29: Ch3 proj.mgt

29

Example 2. CPM with Three Activity Time Estimates

TaskImmediate

Predecesors Optimistic Most Likely PessimisticA None 3 6 15B None 2 4 14C A 6 12 30D A 2 5 8E C 5 11 17F D 3 6 15G B 3 9 27H E,F 1 4 7I G,H 4 19 28

Page 30: Ch3 proj.mgt

30

Example 2. Expected Time Calculations

ET(A)= 3+4(6)+15

6

ET(A)= 3+4(6)+15

6

ET(A)=42/6=7ET(A)=42/6=7Task

Immediate Predecesors

Expected Time

A None 7B None 5.333C A 14D A 5E C 11F D 7G B 11H E,F 4I G,H 18

TaskImmediate

Predecesors Optimistic Most Likely PessimisticA None 3 6 15B None 2 4 14C A 6 12 30D A 2 5 8E C 5 11 17F D 3 6 15G B 3 9 27H E,F 1 4 7I G,H 4 19 28

Expected Time = Opt. Time + 4(Most Likely Time) + Pess. Time

6Expected Time =

Opt. Time + 4(Most Likely Time) + Pess. Time

6

Page 31: Ch3 proj.mgt

31

Ex. 2. Expected Time Calculations

TaskImmediate

PredecesorsExpected

TimeA None 7B None 5.333C A 14D A 5E C 11F D 7G B 11H E,F 4I G,H 18

ET(B)=32/6=5.333ET(B)=32/6=5.333

ET(B)= 2+4(4)+14

6

ET(B)= 2+4(4)+14

6

TaskImmediate

Predecesors Optimistic Most Likely PessimisticA None 3 6 15B None 2 4 14C A 6 12 30D A 2 5 8E C 5 11 17F D 3 6 15G B 3 9 27H E,F 1 4 7I G,H 4 19 28

Expected Time = Opt. Time + 4(Most Likely Time) + Pess. Time

6Expected Time =

Opt. Time + 4(Most Likely Time) + Pess. Time

6

Page 32: Ch3 proj.mgt

32

Ex 2. Expected Time Calculations

TaskImmediate

PredecesorsExpected

TimeA None 7B None 5.333C A 14D A 5E C 11F D 7G B 11H E,F 4I G,H 18

ET(C)= 6+4(12)+30

6

ET(C)= 6+4(12)+30

6

ET(C)=84/6=14ET(C)=84/6=14

TaskImmediate

Predecesors Optimistic Most Likely PessimisticA None 3 6 15B None 2 4 14C A 6 12 30D A 2 5 8E C 5 11 17F D 3 6 15G B 3 9 27H E,F 1 4 7I G,H 4 19 28

Expected Time = Opt. Time + 4(Most Likely Time) + Pess. Time

6Expected Time =

Opt. Time + 4(Most Likely Time) + Pess. Time

6

Page 33: Ch3 proj.mgt

33

Example 2. Network

A(7)

B(5.333)

C(14)

D(5)

E(11)

F(7)

H(4)

G(11)

I(18)

Duration = 54 Days

Page 34: Ch3 proj.mgt

34

Example 2. Probability Exercise

What is the probability of finishing this project in less than 53 days?

What is the probability of finishing this project in less than 53 days?

p(t < D)

TE = 54

Z = D - TE

cp2

Z = D - TE

cp2

tD=53

Page 35: Ch3 proj.mgt

35

Activity variance, = (Pessim. - Optim.

6)2 2Activity variance, = (

Pessim. - Optim.

6)2 2

Task Optimistic Most Likely Pessimistic VarianceA 3 6 15 4B 2 4 14C 6 12 30 16D 2 5 8E 5 11 17 4F 3 6 15G 3 9 27H 1 4 7 1I 4 19 28 16

(Sum the variance along the critical path.)

2 = 41 2 = 41

Page 36: Ch3 proj.mgt

36

There is a 43.8% probability that this project will be completed in less than 53 weeks.

There is a 43.8% probability that this project will be completed in less than 53 weeks.

p(Z < -.156) = .438, or 43.8 % (NORMSDIST(-.156)p(Z < -.156) = .438, or 43.8 % (NORMSDIST(-.156)

Z = D - T

=53- 54

41= -.156E

cp2

Z = D - T

=53- 54

41= -.156E

cp2

TE = 54

p(t < D)

tD=53

Page 37: Ch3 proj.mgt

37

Ex 2. Additional Probability Exercise

What is the probability that the project duration will exceed 56 weeks?

What is the probability that the project duration will exceed 56 weeks?

Page 38: Ch3 proj.mgt

38

Example 2. Additional Exercise Solution

tTE = 54

p(t < D)

D=56

Z = D - T

=56 - 54

41= .312E

cp2

Z = D - T

=56 - 54

41= .312E

cp2

p(Z > .312) = .378, or 37.8 % (1-NORMSDIST(.312)) p(Z > .312) = .378, or 37.8 % (1-NORMSDIST(.312))

Page 39: Ch3 proj.mgt

39

Time-Cost Models

Basic Assumption: Relationship between activity completion time and project cost

Time Cost Models: Determine the optimum point in time-cost tradeoffs– Activity direct costs– Project indirect costs– Activity completion times

Page 40: Ch3 proj.mgt

40

Network Crashing (Project Crashing) Determine the time – cost ratio for each activity in the

network – this ratio represents the increase in cost for a unit decrease in time.

Time – Cost Ratio = crash cost – normal cost

normal time – crash time Identify the activities on critical path & select that activity

which has smallest time cost ratio – crash that activity to the extent possible.

Observe any change in the critical path – any other path becomes critical – calculate time cost ratio in the new critical path.

Repeat above steps – till the activities are crashed to reduce the present duration to the desired time period.

Page 41: Ch3 proj.mgt

41

CPM Assumptions / Limitations Project activities can be identified as entities

(There is a clear beginning and ending point for each activity.)

Project activity sequence relationships can be specified and networked

Project control should focus on the critical path

The activity times follow the beta distribution, with the variance of the project assumed to equal the sum of the variances along the critical path

Page 42: Ch3 proj.mgt

42

Question Bowl

Which of the following are examples of Graphic Project Charts?

a. Gantt b. Barc. Milestoned. All of the abovee. None of the above

Answer: d. All of the above

Page 43: Ch3 proj.mgt

43

Question Bowl

Which of the following are one of the three organizational structures of projects?

a. Pure b. Functionalc. Matrixd. All of the abovee. None of the above

Answer: d. All of the above

Page 44: Ch3 proj.mgt

44

Question Bowl

Answer: a. SOW (or Statement of Work)

A project starts with a written description of the objectives to be achieved, with a brief statement of the work to be done and a proposed schedule all contained in which of the following?

a. SOW

b. WBS

c. Early Start Schedule

d. Late Start Schedule

e. None of the above

Page 45: Ch3 proj.mgt

45

Question Bowl For some activities in a project there may

be some leeway from when an activity can start and when it must finish. What is this period of time called when using the Critical Path Method?

a. Early start time

b. Late start time

c. Slack time

d. All of the above

e. None of the above

Answer: c. Slack time

Page 46: Ch3 proj.mgt

46

Question BowlHow much “slack time” is permitted in the “critical

path” activity times?a. Only one unit of time per activity b. No slack time is permittedc. As much as the maximum activity time in the

networkd. As much as is necessary to add up to the total

time of the projecte. None of the above

Answer: b. No slack time is permitted (All critical path activities must have zero slack time, otherwise they would not be critical to the project completion time.)

Page 47: Ch3 proj.mgt

47

Question Bowl

When looking at the Time-Cost Trade Offs in the Minimum-Cost Scheduling time-cost model, we seek to reduce the total time of a project by doing what to the least-cost activity choices?

a. Crashing them b. Adding slack timec. Subtracting slack timed. Adding project time e. None of the above

Answer: a. Crashing them (We “crash” the least-cost activity times to seek a reduced total time for the entire project and we do it step-wise as inexpensively as possible.)