Presentation on theme: "Project Management Projects are unique, one-time operations designed to accomplish a specific set of objectives in a limited timeframe Project managers."— Presentation transcript:
1 Project ManagementProjects are unique, one-time operations designed to accomplish a specific set of objectives in a limited timeframeProject managers are responsible for managing the cost and timely completion of the projectPERT/CPM are tools to support project managers
2 Schware Foundry Inc.Schware Foundry, Inc., a metalworks plant, has been given 16 weeks by the local environmental protection agency to install a complex air-filter system on its main smokestack.The project manager has identified the 8 key activities that are necessary to complete the smokestack modification as well as the estimated completion times for each activity. (These activities are shown on the next slide)
3 H Inspection & Testing F,G 2 weeks Immediate ExpectedActivity Description Predecessors TimeA Build internal components weeksB Modify roof and floor weeksC Construct collection stack A weeksD Pour concrete & installframe B weeksE Build high temp. burner C weeksF Install control system C weeksG Install air pollution device D,E weeksH Inspection & Testing F,G weeks
4 Project ManagementDetermine all specific activities associated with the project along with estimates for the amount of time required to complete each activity. Identify the interdependencies of the activitiesCreate a network to depict the sequential relationships between the activitiesPerform PERT or CPM to determine the critical activities and expected project completion time.
5 Critical Path Analysis Definitions A path is a sequence of activities that leads from the starting node of the project to the finishing node of the projectThe length of the path is the sum of the activity times of the activities comprising the pathThe critical path is the path with the longest length of time. It represents the minimum project completion time.
6 Critical Activity Definitions Critical activities are the activities which make up the critical path. Any delays with these activities will hurt the project completion time.Slack time is the delay an activity can experience without hurting the project completion time, assuming that the other activities stay on track with their schedule.
7 Information Recorded for Each Node ESTiEFTiitiLSTiLFTiti = time required to perform activity iESTi = earliest possible start time for activity iEFTi = earliest possible finish time for activity iLSTi = latest possible start time for activity iLFTi = latest possible finish time for activity i
8 CPM Analysis Algorithm Step 1: Make a forward pass through the network as follows: For each of these activities, beginning at node i, compute:Earliest Start Time = the maximum of earliest finish times for all of its immediate predecessorsEarliest Finish Time = (Earliest Start Time) + (Time to complete activity i).The project completion time is the maximum of the Earliest Finish Times at the completion node.
9 CPM Analysis Algorithm Step 2: Make a backwards pass through the network as follows: Move sequentially backwards from the last node, N, to node N-1, to node N-2, etc. At a given node, j, compute:Latest Finish Time = the minimum of the latest start times for all activities that immediately follow the activity (For node N, this is the project completion time.)Latest Start Time = (Latest Finish Time) - (Time to complete activity j).
10 CPM Analysis Algorithm Step 3: Calculate the slack time for each activity by:Slack = (Latest Start) - (Earliest Start) or= (Latest Finish) - (Earliest Finish).A critical path is a path of activities, from node 1 to N, with 0 slack times.Note that the slack for each noncritical activity is shared with other noncritical activities on the same path.
11 PERTIn the three-time estimate approach, the time to complete an activity is assumed to follow a Beta distribution.An activity’s mean completion time is:t = (a + 4m + b)/6An activity’s completion time variance is:((b-a)/6)2a = the optimistic completion time estimateb = the pessimistic completion time estimatem = the most likely completion time estimate
13 PERTIn the three-time estimate approach, the critical path is determined as if the mean times for the activities were fixed times.The overall project completion time is assumed to have a normal distribution with mean equal to the sum of the means along the critical path and variance equal to the sum of the variances along the critical path.
14 Example: ABC Associates Consider the following project:Immed. Optimistic Most Likely PessimisticActivity Predec. Time (Hr.) Time (Hr.) Time (Hr.)A —B —C AD AE AF B,CG B,CH E,FI E,FJ D,HK G,I
16 Example: ABC Associates Activity ES EF LS LF SlackA *criticalBC *DEF *GHI *JK *The estimated project completion time is the Max EF at node 7 = 23. Critical Path (A-C-F-I-K)
17 Example: ABC Associates Probability the project will be completed within 24 hrs2 = 2A + 2C + 2F + 2H + 2K= 4/ / /9= 2 =z = ( )/(24-23)/1.414 = .71From the Standard Normal Distribution table:P(z < .71) = =