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CHAPTER 17 Project Management.

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

1 CHAPTER 17 Project Management

2 Projects Build A A Done Build B B Done Build C C Done Build D Ship JAN FEB MAR APR MAY JUN On time! Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame.

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

4 Project 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 Project 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 Project Management What are the tools? Work breakdown structure
Network diagram Gantt charts Risk management

7 Planning and Scheduling
MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Locate new facilities Interview staff Hire and train staff Select and order furniture Remodel and install phones Move in/startup Gantt Chart

8 Key Decisions 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

9 Project Manager Responsible for: Work Quality Human Resources Time
Communications Costs

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

11 Project Life Cycle Concept Feasibility Planning Execution Termination

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

13 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 The Network Diagram Network (precedence) diagram
Activity-on-arrow (AOA) Activity-on-node (AON) Activities Events

15 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 Project Network – Activity on Arrow
Figure 17.4 1 2 3 4 5 6 Locate facilities Order furniture Furniture setup Interview Hire and train Remodel Move in AOA

17 Project Network – Activity on Node
Figure 17.4 1 2 3 5 6 Locate facilities Order furniture Furniture setup Interview Remodel Move in 4 Hire and train 7 S AON

18 Network Conventions a b c d Dummy activity

19 Time Estimates Deterministic Probabilistic
Time estimates that are fairly certain Probabilistic Estimates of times that allow for variation

20 Example 1 Figure 17.5 1 2 3 4 5 6 Deterministic time estimates 6 weeks
Locate facilities Order furniture Furniture setup Interview Hire and train Remodel Move in Deterministic time estimates

21 Example 1 Solution Critical Path

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

23 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 Probabilistic Estimates
Figure 17.8 Activity start Optimistic time Most likely time (mode) Pessimistic time to tp tm te

25 te = to + 4tm +tp 6 Expected Time te = expected time
to = optimistic time tm = most likely time tp = pessimistic time

26 (tp – to)2 2 = 36 Variance 2 = variance to = optimistic time
2 = (tp – to)2 36 2 = variance to = optimistic time tp = pessimistic time

27 Example 5 1-3-4 a 3-4-5 d 3-5-7 e 5-7-9 f 2-4-6 b 4-6-8 h 2-3-6 g
3-4-6 i 2-3-5 c Optimistic time Most likely Pessimistic

28 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 Example 6 17 Weeks 10.0 16.0 13.5 1.00 a-b-c d-e-f g-h-i

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

32 Example 7 6 a 4 d 5 c 10 b 9 e 2 f

33 Advantages of PERT Forces managers to organize
Provides graphic display of activities Identifies Critical activities Slack activities 1 2 3 4 5 6

34 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 1 2 3 4 5 6 142 weeks

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

36 Advantages of PM Software
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

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

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

39 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 Definition/Example Alton Bridge
Projects — Concepts PM1 Definition/Example Alton Bridge

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