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17-1Project Management CHAPTER 17 Project Management.

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Presentation on theme: "17-1Project Management CHAPTER 17 Project Management."— Presentation transcript:

1 17-1Project Management CHAPTER 17 Project Management

2 17-2Project Management Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame. Build A A Done Build B B Done Build C C Done Build D Ship JANFEBMARAPRMAYJUN On time! Projects

3 17-3Project Management  How is it different?  Limited time frame  Narrow focus, specific objectives  Less bureaucratic  Why is it used?  Special needs  Pressures for new or improves products or services

4 17-4Project Management  What are the Key Metrics  Time  Cost  Performance objectives  What are the Key Success Factors?  Top-down commitment  Having a capable project manager  Having time to plan  Careful tracking and control  Good communications

5 17-5Project Management  What are the Major Administrative Issues?  Executive responsibilities  Project selection  Project manager selection  Organizational structure  Organizational alternatives  Manage within functional unit  Assign a coordinator  Use a matrix organization with a project leader

6 17-6Project Management  What are the tools?  Work breakdown structure  Network diagram  Gantt charts  Risk management

7 17-7Project Management Planning and Scheduling MARAPRMAYJUNJULAUGSEPOCTNOVDEC Locate new facilities Interview staff Hire and train staff Select and order furniture Remodel and install phones Move in/startup Gantt Chart

8 17-8Project Management  Deciding which projects to implement  Selecting a project manager  Selecting a project team  Planning and designing the project  Managing and controlling project resources  Deciding if and when a project should be terminated Key Decisions

9 17-9Project Management Project Manager Responsible for: WorkQuality Human ResourcesTime CommunicationsCosts

10 17-10Project Management  Temptation to understate costs  Withhold information  Misleading status reports  Falsifying records  Comprising workers’ safety  Approving substandard work Ethical Issues

11 17-11Project Management Project Life Cycle Concept Feasibility Planning Execution Termination Management

12 17-12Project Management Work Breakdown Structure Project X Level 1 Level 2 Level 3 Level 4 Figure 17.2

13 17-13Project Management PERT and CPM PERT: Program Evaluation and Review Technique CPM: Critical Path Method  Graphically displays project activities  Estimates how long the project will take  Indicates most critical activities  Show where delays will not affect project

14 17-14Project Management The Network Diagram  Network (precedence) diagram  Activity-on-arrow (AOA)  Activity-on-node (AON)  Activities  Events

15 17-15Project Management The Network Diagram (cont’d)  Path  Sequence of activities that leads from the starting node to the finishing node  Critical path  The longest path; determines expected project duration  Critical activities  Activities on the critical path  Slack  Allowable slippage for path; the difference the length of path and the length of critical path

16 17-16Project Management Project Network – Activity on Arrow Locate facilities Order furniture Furniture setup Interview Hire and train Remodel Move in Figure 17.4 AOA

17 17-17Project Management Project Network – Activity on Node Locate facilities Order furniture Furniture setup Interview Remodel Move in 4 Hire and train 7S Figure 17.4 AON

18 17-18Project Management Network Conventions a b ca b c a b c d a b c Dummy activity

19 17-19Project Management Time Estimates  Deterministic  Time estimates that are fairly certain  Probabilistic  Estimates of times that allow for variation

20 17-20Project Management Example weeks 6 weeks 3 weeks 4 weeks 9 weeks 11 weeks 1 week Locate facilities Order furniture Furniture setup Interview Hire and train Remodel Move in Deterministic time estimates Figure 17.5

21 17-21Project Management Example 1 Solution Critical Path

22 17-22Project Management  Network activities  ES: early start  EF: early finish  LS: late start  LF: late finish  Used to determine  Expected project duration  Slack time  Critical path Computing Algorithm

23 17-23Project Management Probabilistic Time Estimates  Optimistic time  Time required under optimal conditions  Pessimistic time  Time required under worst conditions  Most likely time  Most probable length of time that will be required

24 17-24Project Management Probabilistic Estimates Activity start Optimistic time Most likely time (mode) Pessimistic time toto tptp tmtm tete Figure 17.8

25 17-25Project Management Expected Time tete = t o + 4t m +t p 6 t e = expected time t o = optimistic time t m = most likely time t p = pessimistic time

26 17-26Project Management Variance    (t p – t o ) 2 36    = variance t o = optimistic time t p = pessimistic time

27 17-27Project Management Example a d e f b h g i c Optimistic time Most likely time Pessimistic time

28 17-28Project Management Path Probabilities Z = Specified time – Path mean Path standard deviation Z indicates how many standard deviations of the path distribution the specified tine is beyond the expected path duration.

29 17-29Project Management 17 Weeks a-b-c d-e-f g-h-i Example 6

30 17-30Project Management Time-cost Trade-offs: Crashing  Crash – shortening activity duration  Procedure for crashing  Crash the project one period at a time  Only an activity on the critical path  Crash the least expensive activity  Multiple critical paths: find the sum of crashing the least expensive activity on each critical path

31 17-31Project Management Time-Cost Trade-Offs: Crashing Total cost Shorten Cumulative cost of crashing Expected indirect costs Optimum CRASH Figure 17.11

32 17-32Project Management 6a6a 4d4d 5c5c 10 b 9e9e 2f2f Example 7

33 17-33Project Management Advantages of PERT  Forces managers to organize  Provides graphic display of activities  Identifies  Critical activities  Slack activities

34 17-34Project Management Limitations of PERT  Important activities may be omitted  Precedence relationships may not be correct  Estimates may include a fudge factor  May focus solely on critical path weeks

35 17-35Project Management  Computer aided design (CAD)  Groupware (Lotus Notes)  Project management software  CA Super Project  Harvard Total Manager  MS Project  Sure Track Project Manager  Time Line Technology for Managing Projects

36 17-36Project Management  Imposes a methodology  Provides logical planning structure  Enhances team communication  Flag constraint violations  Automatic report formats  Multiple levels of reports  Enables what-if scenarios  Generates various chart types Advantages of PM Software

37 17-37Project Management  Risk: occurrence of events that have undesirable consequences  Delays  Increased costs  Inability to meet specifications  Project termination Project Risk Management

38 17-38Project Management  Identify potential risks  Analyze and assess risks  Work to minimize occurrence of risk  Establish contingency plans Risk Management

39 17-39Project Management Summary  Projects are a unique set of activities  Projects go through life cycles  PERT and CPM are two common techniques  Network diagrams  Project management software available

40 17-40Project Management Projects — Concepts PM1 Definition/Example Alton Bridge

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