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3 3 Project Management PowerPoint presentation to accompany Heizer and Render Operations Management, 10e Principles of Operations Management, 8e PowerPoint.

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Presentation on theme: "3 3 Project Management PowerPoint presentation to accompany Heizer and Render Operations Management, 10e Principles of Operations Management, 8e PowerPoint."— Presentation transcript:

1 3 3 Project Management PowerPoint presentation to accompany Heizer and Render Operations Management, 10e Principles of Operations Management, 8e PowerPoint slides by Jeff Heyl

2 Outline Project Management Overview Project Planning, Scheduling, and Control Project Organization Project Management Techniques: PERT and CPM Activity-on-Node Example Activity-on-Arrow Example Determining the Project Schedule Forward Pass Backward Pass Calculating Slack Time and Identifying the Critical Path(s) Project Crashing 2

3 Learning Objectives 1.Use a Gantt chart for scheduling 2.Draw an AON network 3.Complete forward and backward passes for a project 4.Determine a critical path 5.Calculate slack 6.Project crashing 3

4 Bechtel Projects Building 26 massive distribution centers in just two years for the internet company Webvan Group ($1 billion) Constructing 30 high-security data centers worldwide for Equinix, Inc. ($1.2 billion) Building and running a rail line between London and the Channel Tunnel ($4.6 billion) Developing an oil pipeline from the Caspian Sea region to Russia ($850 million) Expanding the Dubai Airport in the UAE ($600 million), and the Miami Airport in Florida ($2 billion) 4

5 Single unit Many related activities Difficult production planning and inventory control General purpose equipment High labor skills Project Characteristics 5

6 Planning Objectives Resources Work break-down structure Organization Scheduling Project activities Start & end times Network Controlling Monitor, compare, revise, action Project Management Activities 6

7 Project Planning, Scheduling, and Controlling Figure 3.1 BeforeStart of projectDuring projectTimelineproject 7

8 Project Planning, Scheduling, and Controlling Figure 3.1 BeforeStart of projectDuring projectTimelineproject 8

9 Project Planning, Scheduling, and Controlling Figure 3.1 BeforeStart of projectDuring projectTimelineproject 9

10 Project Planning, Scheduling, and Controlling Figure 3.1 BeforeStart of projectDuring projectTimelineproject 10

11 Project Planning, Scheduling, and Controlling Figure 3.1 BeforeStart of projectDuring projectTimelineproject Budgets Delayed activities report Slack activities report Time/cost estimates Budgets Engineering diagrams Cash flow charts Material availability details CPM/PERT Gantt charts Milestone charts Cash flow schedules 11

12 The Role of the Project Manager Highly visible Responsible for making sure that: 1.All necessary activities are finished in order and on time 2.The project comes in within budget 3.The project meets quality goals 4.The people assigned to the project receive motivation, direction, and information 12 Project managers should be: Good coaches Good communicators Able to organize activities from a variety of disciplines

13 Ethical Issues 1.Offers of gifts from contractors 2.Pressure to alter status reports to mask delays 3.False reports for charges of time and expenses 4.Pressure to compromise quality to meet schedules Project managers face many ethical decisions on a daily basis The Project Management Institute has established an ethical code to deal with problems such as: 13

14 Work Breakdown Structure Level 1.Project 2.Major tasks in the project 3.Subtasks in the major tasks 4.Activities (or work packages) to be completed 14

15 Level 4 Compatible with Windows ME Compatible with Windows Vista Compatible with Windows XP (Work packages) Level 3 Develop GUIs Planning Module Testing Ensure Compatibility with Earlier Versions Cost/Schedule Management Defect Testing Work Breakdown Structure Figure 3.3 Level 2 Software Design Project Management System Testing Level 1 Develop Windows 7 Operating System

16 Project Scheduling Identifying precedence relationships Sequencing activities Determining activity times & costs Estimating material & worker requirements Determining critical activities 16

17 Gantt chart Critical Path Method (CPM) Program Evaluation and Review Technique (PERT) Project Management Techniques 17

18 A Simple Gantt Chart Time J F M A M J J A S Design Prototype Test Revise Production 18

19 Service For a Delta Jet Figure 3.4 Passengers Baggage Fueling Cargo and mail Galley servicing Lavatory servicing Drinking water Cabin cleaning Cargo and mail Flight services Operating crew Baggage Passengers Deplaning Baggage claim Container offload Pumping Engine injection water Container offload Main cabin door Aft cabin door Aft, center, forward Loading First-class section Economy section Container/bulk loading Galley/cabin check Receive passengers Aircraft check Loading Boarding Time, Minutes 19

20 Network techniques Developed in 1950s CPM by DuPont for chemical plants (1957) PERT by Booz, Allen & Hamilton with the U.S. Navy, for Polaris missile (1958) Consider precedence relationships and interdependencies Each uses a different estimate of activity times PERT and CPM 20

21 Six Steps PERT & CPM 1.Define the project and prepare the work breakdown structure 2.Develop relationships among the activities - decide which activities must precede and which must follow others 3.Draw the network connecting all of the activities 21

22 Six Steps PERT & CPM 4.Assign time and/or cost estimates to each activity 5.Compute the longest time path through the network – this is called the critical path 6.Use the network to help plan, schedule, monitor, and control the project 22

23 A Comparison of AON and AOA Network Conventions Activity onActivityActivity on Node (AON)MeaningArrow (AOA) A comes before B, which comes before C. (a) A B C BAC A and B must both be completed before C can start. (b) A C C B A B B and C cannot begin until A is completed. (c) B A C A B C Figure

24 A Comparison of AON and AOA Network Conventions Activity onActivityActivity on Node (AON)MeaningArrow (AOA) C and D cannot begin until both A and B are completed. (d) A B C D B AC D C cannot begin until both A and B are completed; D cannot begin until B is completed. A dummy activity is introduced in AOA. (e) CA BD Dummy activity A B C D Figure

25 A Comparison of AON and AOA Network Conventions Activity onActivityActivity on Node (AON)MeaningArrow (AOA) B and C cannot begin until A is completed. D cannot begin until both B and C are completed. A dummy activity is again introduced in AOA. (f) A C DB AB C D Dummy activity Figure

26 AON Example ActivityDescription Immediate Predecessors ABuild internal components BModify roof and floor CConstruct collection stackA DPour concrete and install frameA, B EBuild high-temperature burnerC FInstall pollution control systemC GInstall air pollution deviceD, E HInspect and testF, G Milwaukee Paper Manufacturing's Activities and Predecessors Table

27 AON Network for Milwaukee Paper A Start B Start Activity Activity A (Build Internal Components) Activity B (Modify Roof and Floor) Figure

28 AON Network for Milwaukee Paper Figure 3.7 C D A Start B Activity A Precedes Activity C Activities A and B Precede Activity D 28

29 AON Network for Milwaukee Paper G E F H C A Start DB Arrows Show Precedence Relationships Figure

30 H (Inspect/ Test) 7 Dummy Activity AOA Network for Milwaukee Paper 6 F (Install Controls) E (Build Burner) G (Install Pollution Device) 5 D (Pour Concrete/ Install Frame) 4 C (Construct Stack) B (Modify Roof/Floor) A (Build Internal Components) Figure

31 Determining the Project Schedule Perform a Critical Path Analysis The critical path is the longest path through the network The critical path is the shortest time in which the project can be completed Any delay in critical path activities delays the project Critical path activities have no slack time 31

32 Determining the Project Schedule Perform a Critical Path Analysis Table 3.2 ActivityDescriptionTime (weeks) ABuild internal components2 BModify roof and floor3 CConstruct collection stack2 DPour concrete and install frame4 EBuild high-temperature burner4 FInstall pollution control system 3 GInstall air pollution device5 HInspect and test2 Total Time (weeks)25 32

33 Determining the Project Schedule Perform a Critical Path Analysis Table 3.2 ActivityDescriptionTime (weeks) ABuild internal components2 BModify roof and floor3 CConstruct collection stack2 DPour concrete and install frame4 EBuild high-temperature burner4 FInstall pollution control system 3 GInstall air pollution device5 HInspect and test2 Total Time (weeks)25 Earliest start (ES) =earliest time at which an activity can start, assuming all predecessors have been completed Earliest finish (EF) =earliest time at which an activity can be finished Latest start (LS) =latest time at which an activity can start so as to not delay the completion time of the entire project Latest finish (LF) =latest time by which an activity has to be finished so as to not delay the completion time of the entire project 33

34 Determining the Project Schedule Perform a Critical Path Analysis Figure 3.10 A Activity Name or Symbol Earliest Start ES Earliest Finish EF Latest Start LS Latest Finish LF Activity Duration 2 34

35 Forward Pass Begin at starting event and work forward Earliest Start Time Rule: If an activity has only a single immediate predecessor, its ES equals the EF of the predecessor If an activity has multiple immediate predecessors, its ES is the maximum of all the EF values of its predecessors ES = Max {EF of all immediate predecessors} Earliest Finish Time Rule: EF = ES + Activity time 35

36 ES/EF Network for Milwaukee Paper Start 0 0 ES 0 EF = ES + Activity time 36

37 ES/EF Network for Milwaukee Paper Start A2A2 2 EF of A = ES of A ES of A 37

38 B3B3 ES/EF Network for Milwaukee Paper Start A2A EF of B = ES of B ES of B 38

39 C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A

40 C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A2 20 D4D4 7 3 = Max (2, 3) 40

41 D4D4 37 C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A

42 E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A2 20 Figure

43 Backward Pass Begin with the last event and work backwards Latest Finish Time Rule: If an activity is an immediate predecessor for just a single activity, its LF equals the LS of the activity that immediately follows it If an activity is an immediate predecessor to more than one activity, its LF is the minimum of all LS values of all activities that immediately follow it LF = Min {LS of all immediate following activities} Latest Start Time Rule: LS = LF – Activity time 43

44 LS/LF Times for Milwaukee Paper E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A2 20 LF = EF of Project 1513 LS = LF – Activity time 44

45 LS/LF Times for Milwaukee Paper E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A2 20 LF = Min(LS of following activity)

46 LS/LF Times for Milwaukee Paper E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A2 20 LF = Min(4, 10) 42 46

47 LS/LF Times for Milwaukee Paper E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A

48 Computing Slack Time After computing the ES, EF, LS, and LF times for all activities, compute the slack or free time for each activity Slack is the length of time an activity can be delayed without delaying the entire project Slack = LS – ES or Slack = LF – EF 48

49 Computing Slack Time Table 3.3 EarliestEarliestLatestLatestOn StartFinishStartFinishSlackCritical ActivityESEFLSLFLS – ESPath A02020Yes B03141No C24240Yes D37481No E48480Yes F No G Yes H Yes 49

50 Critical Path for Milwaukee Paper E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A

51 ES – EF Gantt Chart for Milwaukee Paper ABuild internal components BModify roof and floor CConstruct collection stack DPour concrete and install frame EBuild high- temperature burner FInstall pollution control system GInstall air pollution device HInspect and test

52 LS – LF Gantt Chart for Milwaukee Paper ABuild internal components BModify roof and floor CConstruct collection stack DPour concrete and install frame EBuild high- temperature burner FInstall pollution control system GInstall air pollution device HInspect and test

53 What Project Management Has Provided So Far 1.The projects expected completion time is 15 weeks 2.Five activities (A, C, E, G, and H) are on the critical path 3.Three activities (B, D, F) are not on the critical path and have slack time 4.A detailed schedule is available 53

54 Trade-Offs and Project Crashing The project is behind schedule The completion time has been moved forward It is not uncommon to face the following situations: Shortening the duration of the project is called project crashing 54

55 Factors to Consider When Crashing a Project The amount by which an activity is crashed is, in fact, permissible Taken together, the shortened activity durations will enable us to finish the project by the due date The total cost of crashing is as small as possible

56 In-Class Problems from the Lecture Guide Practice Problems 56 ActivityImmediate Predecessor A- B- CA DB EB FC, E GD HF, G Problem 1: The following represent activities in a major construction project. Draw the network to represent this project.


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