chapter 17 lecture slides

8/8/2019 Chapter 17 Lecture Slides

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Chapter 17: AssignmentsChapter 17: Assignments

Reading: Managing Projects the Right Way: Key

Principles for Successful Projects

Case: Time Please, pp 825

Problems: 7, pp 819

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Learning ObjectivesLearning Objectives

Nature, examples, triple constraints of projects

Project life cycle

Matrix organizations

Work breakdown structures Gantt chart

Critical path method (CPM)

Project evaluation review method (PERT) Crashing analysis

Project risk management

Project management software

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ProjectsProjects

Projects: Unique

One-time effort to accomplish a specific set of

objectives in a limited time frame

Start and end dates Reward and penalty

Examples:

The Olympic Games

Producing a movie Software development

Product development

ERP implementation

MBA Dissertation17-3


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The Triple ConstraintThe Triple Constraint

of Project Managementof Project Management

Successful projectmanagement meansmeeting all three goals(scope, time, and cost) thus satisfying theprojects sponsor andcustomer(s)!

Quality is fourthconstraint!

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The Nature of ProjectsThe Nature of Projects

Projects go through a series of stages a life

cycle

Projects bring together people with a

diversity of knowledge and skills, most ofwhom remain associated with the project for

less than its full life

Use their own organizational structure calledMatrix organization

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Project Life CycleProject Life Cycle

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Matrix Organization

HR,

Training,

Legal,

Construction

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Project ManagementProject Management

DecisionsDecisions

Project success depends upon making key

managerial decisions over a sequence of

steps:

Deciding which projects to implement Selecting the project manager

Selecting the project team

Planning the project Managing and controlling project resources

Deciding if and when a project should be

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Project Management ToolsProject Management Tools

Work Breakdown Structures (WBS)

Gantt Chart

Critical Path Method (CPM)

Project/program Evaluation Review

Technique (PERT)

Crashing Analysis

Risk Analysis

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Work Breakdown StructureWork Breakdown Structure

(WBS)(WBS)

WBS

A hierarchical listing of what must be done

during a project

Establishes a logical framework for identifying therequired activities for the project

1. Identify the major elements of the project

2. Identify the major supporting activities for each of the major

elements

3. Break down each major supporting activity into a list of theactivities that will be needed to accomplish it

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Example Work BreakdownExample Work Breakdown

StructureStructure


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Example Work BreakdownExample Work Breakdown

StructureStructure


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Gantt ChartGantt Chart

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CPM and PERTCPM and PERT

CPM (critical path method) and PERT (program evaluationand review technique) are two techniques used to manage

large-scale projects

CPM and PERT help Project Managers:

1. A graphical display of project activities2. An estimate of how long the project will take

3. An indication of which activities are most critical to timely project

completion

4. An indication of how long any activity can be delayed without

delaying the project

CPM is deterministic and PERT probabilistic

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ExampleExample

Activity Time Preceded By

A 10 --

B 7 --

C 5 AD 13 A

E 4 B,C

F 12 DG 14 E


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Network DiagramNetwork Diagram

1

2

3

4

5

6

Paths Time Slack

A-D-F 35 0

A-C-E-G 33 2

B-E-G 25 10

critical path

A(10)

B(7)

C(5)

D(13)

E(4) G(14)

F(12)


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Early Start and Finish TimesEarly Start and Finish Times


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Latest Start and Finish TimesLatest Start and Finish Times


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Activity Slack TimeActivity Slack Time

Activity Slack

Activity Slack Calculation

TES = earliest start time for activity TLS = latest start time for activity

TEF = earliest finish time for activity

TLF = latest finish time for activityActivity Slack = TLS - TES = TLF - TEF

Activities with zero slack are critical activities


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Path SlackPath Slack

Path Slack = Duration of Critical Path -

Path Duration


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Activity Slack TimesActivity Slack Times

Activit S LS L Slack

A 0 10 0 10 0

0 7 10 17 10

10 15 12 17 5

D 10 23 10 23 0

15 19 17 21 2

F 23 35 23 35 0

19 33 21 35 2


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PERT: Project Planning WhenPERT: Project Planning When

Activity Times are UncertainActivity Times are Uncertain Inputs

optimistic (to), most likely (tm), and pessimistic (tp) time

estimate for each activity

activity precedence relationships

Outputs

graphical representation of project

expected activity and path completion times

variance of activity and path completion times probability that project completed by specified time


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Expected Activity Time andExpected Activity Time and

Variance of Activity TimeVariance of Activity Time

t

t t t

t t

e

o m p

p o

!

!

4

6

6

2

2

W


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ExampleExample

Activit Preceded B to tm tp te W2

A -- 2 6 7 5.50 .694

B -- 5 7 9 7.00 .444

C A 3 5 6 4.83 .250

D A 10 10 10 10.0 0.000

E B,C 3 4 5 4.0 .111

F D 8 12 13 11.5 .913

G E 2 4 8 4.33 1.000


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Network Diagram with ExpectedNetwork Diagram with Expected

Activity Times and VariancesActivity Times and Variances

1

2

3

4

5

6

[5.5,

0.694]

[7.0,

0.444]

[4.83,

0.250]

[10, 0.0]

[4.0,

0.111]

[4.33, 1.0]

[11.5, 0.913]

A

B

C

D

E

F

G


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Expected Completion TimeExpected Completion Time

and Variance of Path Aand Variance of Path A--DD--FF

Expected completion time = 5.5 + 10 + 11.5

= 27

Path variance = 0.694 + 0 + 0.913 = 1.607


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Path Expected Times andPath Expected Times and

VariancesVariances

Path

xpected

Time Va iance

Standa d

eviation

A-D-F 27 1 607 1 27

A-C-E-G 14 66 2 055 1 43

B-E-G 15 33 1 555 1 25


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Probabilities of CompletionProbabilities of Completion

Stddevz

ti eco pletionexpected-ti eco pletiondesired!


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Probability of Project BeingProbability of Project Being

Completed on orBefore Time 25Completed on orBefore Time 25

z !

!

25 27

1 27157

..

Only path A-D-F has reasonable

chance of taking 25 or more:

From standard normal table B inAppendix B, there is a 5.82% chance of

completing project on or before time

25.


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Probability of Path AProbability of Path A--DD--F beingF being

Completed on orBefore Time 25Completed on orBefore Time 25

5.82%


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Project Completion TimeProject Completion Time

A project is not complete until all project activities are complete

It is risky to only consider the critical path when assessing the probability

of completing a project within a specified time.

To determine the probability of completing the project within a particular time

frame

Calculate the probability that each path in the project will be completed

within the specified time

Multiply these probabilities

The result is the probability that the projectwill be completed within

the specified time

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Problem 7, Page 819Problem 7, Page 819

a. Draw precedence diagram

b. Find the critical path

c. Find the probability that the project can becompleted in 21 days

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Assumption: IndependenceAssumption: Independence

Independence

Assumption that path duration times are

independent of each other

Requires that1. Activity times are independent

2. Each activity is on only one path

The assumption of independence can be considered

to be met if only a fewactivities in a large project are

on multiple paths

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TimeTime--Cost TradeCost Trade--OffsOffs

Activity time estimates are made for some given level ofresources

It may be possible to reduce the duration of a project by

injecting additional resources

Motivations: To avoid late penalties

Monetary incentives

Free resources for use on other projects

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TiTi C t T dC t T d OffOff


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TimeTime--Cost TradeCost Trade--Offs:Offs:

CrashingCrashing Crashing

Shortening activity durations

Typically, involves the use of additional funds to support additional

personnel or more efficient equipment, and the relaxing of some work

specifications

The project duration may be shortened by increasing directexpenses, thereby realizing savings in indirect project costs

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Crashing DecisionsCrashing Decisions

To make decisions concerning crashingrequires information about:

Regular time and crash time estimates for each

activity Regular cost and crash cost estimates for each

activity

A list of activities that are on the critical path Critical path activities are potential candidates for crashing

Crashing non-critical path activities would not have an impact on

overall project duration

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Crashing: ProcedureCrashing: Procedure

General procedure:

1. Crash the project one period at a time

2. Crash the least expensive activity that is on the critical path

3. When there are multiple critical paths, find the sum of crashing the

least expensive activity on each critical path

If two or more critical paths share common activities, compare

the least expensive cost of crashing a common activity shared by

critical paths with the sum for the separate critical paths

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Crashing ActivitiesCrashing Activities

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Project Risk ManagementProject Risk Management

Risks are an inherent part of project management Risks relate to occurrence of events that have undesirable

consequences such as

Delays

Increased costs

Inability to meet technical specifications

Good risk management involves

Identifying as many risks as possible

Analyzing and assessing those risks

Working to minimize the probability of their occurrence

Establishing contingency plans and budgets for dealing with any

that do occur

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P j t M t S ftP j t M t S ft


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Project Management SoftwareProject Management Software

such as MSP 2007such as MSP 2007 Specialized software used to manage projects

Assign resources

Compare project plan versions

Evaluate changes

Track performance

Imposes a methodology and common project management

terminology

Provides a logical planning structure

May enhance communication among team members

Can flag the occurrence of constraint violations Automatically formats reports

Can generate multiple levels of summary and detail reports

Enables what if scenarios

Can generate a variety of chart types

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R diR di M i P j t th Ri htM i P j t th Ri ht


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Reading:Reading: Managing Projects the RightManaging Projects the Right

Way: Key Principles for SuccessfulWay: Key Principles for Successful

ProjectsProjects

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Case:Case: Time Please, pp 825Time Please, pp 825

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chapter 17 lecture slides

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