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Project Management Prof. Dr. Ali ŞEN University of Mediterranean Karpasia.

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Presentation on theme: "Project Management Prof. Dr. Ali ŞEN University of Mediterranean Karpasia."— Presentation transcript:

1 Project Management Prof. Dr. Ali ŞEN University of Mediterranean Karpasia

2 What is a Project? A temporary and one-time endeavor undertaken to create a unique product or service, which brings about beneficial change or added value

3 Examples of Projects  Building Construction  Research Project

4 PROJECT MANAGEMENT VS. GENERAL MANAGEMENT

5 5 Skill Requirements for Effective Project Management Conflict Resolution Creativity and Flexibility Ability to Adjust to Change Good Planning Negotiation – win-win versus win-lose

6 Chapter 1: The World of Project Management 6 Figure 1-1: Performance, Cost, and Time Project Targets

7 Figure 1-2 The Project Life Cycle

8 Management of Projects 1.Planning - goal setting, defining the project, team organization 2.Scheduling - relates people, money, and supplies to specific activities and activities to each other 3.Controlling - monitors resources, costs, quality, and budgets; revises plans and shifts resources to meet time and cost demands

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

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

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

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

13 Project Control Reports  Detailed cost breakdowns for each task  Total program labor curves  Cost distribution tables  Functional cost and hour summaries  Raw materials and expenditure forecasts  Variance reports  Time analysis reports  Work status reports

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

15 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

16 The Constraint Triangle RESOURCE (COST) SCHEDULE (TIME) PRODUCT (SPECIFICATION) What is most important?

17 Peanuts

18 Tools And Techniques

19 The Work Breakdown Structure (WBS)

20 Outline Introduction – Purposes, Benefits and Examples of a WBS – Additional WBS Terminology Risks in preparing a WBS Summary Appendix -- Constructing a WBS – Steps of Construction – Notes on WBS – Examples of Issues in preparing WBS

21 The Overall Planning Cycle Analyze Job Manage Risks Execute Generate Detailed Plans Generate Initial Plans Measure, Manage Productivity and Quality

22 Detailed Planning - Processes Estimate Size Estimate Effort and Cost Estimate Schedule Evaluate Source Information Statement of Work Requirements Constraints Standards Processes History etc. WBSSize Effort & Cost ScheduleOK Complete Detailed Planning Revise & Negotiate Not OK

23 Detailed Planning - Questions How Big Is It? How Much Will it Cost? How Long? What Do We Do When? Is This Acceptable? What Do We Have To Do? WBSSize Effort & Cost Schedule OK Complete Detailed Planning What Can We Change? Not OK

24 Work Breakdown Structure Introduction Just tell me what I have to do!

25 The Work Breakdown Structure Is... A hierarchical list of the activities required to complete a project It includes tasks for – Software development – Software development management – Support of software development – Any other activities required to meet customer requirements, such as training, documentation etc. Parser Code Generator File System Run Time System User Interface Manage Software Development Build “C” Compiler Build Test Suite Write Documentation Write Installation Software Software for “C” Compiler

26 Top Level Role of WBS Historical Records (at end of project) Cost Estimate (proposal &/ project start) Cost Tracking (during execution) WBS Source Documents (SOW, Requirements, contract, test criteria, etc,)

27 An example of a WBS Shown as a Tree Parser Code Generator File System Run Time System User Interface Manage Software Development Build “C” Compiler Build Test Suite Write Documentation Write Installation Software Software for “C” Compiler

28 An example of a WBS Shown as Indented Text 1Software for “C” Compiler 1.1Build a “C” Compiler 1.1.1Build a User Interface 1.1.2Build a File System 1.1.3Build a Parser 1.1.4Build a Code Generator 1.1.5Build a Run Time System 1.2Build the Test Suite for the Compiler etc. 1.3Write Documentation 1.4Write Installation Software 1.5Manage Software Development

29 Purposes of a WBS To organize the work to be done To illustrate the work to be done To assure that all necessary work has been identified To divide the work into small, well defined tasks

30 Why Do a WBS? To facilitate planning, estimating and scheduling of the project To identify contractual tasks and deliverables To provide a basis for data monitoring and historical data collection

31 “Rolling Up” Costs $15K$38K$13K$24K$22K $31K$112K$85K$28K$45K $301K

32 Work Breakdown Structure Jigsaw model ELEMENTS

33 Gantt Chart GANTT Charts Constructing GANTT Charts Staffing and Re-scheduling

34 Gantt Chart A GANTT chart is a type of bar chart that illustrates a project schedule. After the PERT/CPM analysis is completed, the following phase is to construct the GANTT chart and then to re-allocate resources and re-schedule if necessary. GANTT charts have become a common technique for representing the phases and activities of a project work breakdown structure. It was introduced by Henry Gantt around 1910 – 1915.

35 Gantt Chart 35

36 Gantt Chart Characteristics: – The bar in each row identifies the corresponding task – The horizontal position of the bar identifies start and end times of the task – Bar length represents the duration of the task – Task durations can be compared easily – Good for allocating resources and re-scheduling – Precedence relationships can be represented using arrows – Critical activities are usually highlighted – Slack times are represented using bars with doted lines – The bar of each activity begins at the activity earliest start time (ES) – The bar of each activity ends at the activity latest finish time (LF). 36

37 Gantt Chart 37 Advantages Simple Good visual communication to others Task durations can be compared easily Good for scheduling resources Disadvantages Dependencies are more difficult to visualise Minor changes in data can cause major changes in the chart

38 Constructing Gantt Chart The steps to construct a GANTT chart from the information obtained by PERT/CPM are: 1.Schedule the critical tasks in the correct position. 2.Place the time windows in which the non-critical tasks can be scheduled. 3.Schedule the non-critical tasks according to their earliest starting times. 4.Indicate precedence relationships between tasks. 38

39 Constructing Gantt Chart Example of an early GANTT chart construction: 39

40 Constructing Gantt Chart Step 1. Schedule critical tasks: 40

41 Constructing Gantt Chart Step 2. Place time windows for non-critical tasks: 41

42 Constructing Gantt Chart Step 3. Schedule non-critical tasks Step 4. Indicate precedence relationships: 42

43 Project Management Software Benefits of project management software: – Calculate project schedule – Resource smoothing – Automatic generation of reports and charts Limitations of project management software – Allocation of resources to tasks – Estimation of tasks durations – Make decisions Reading: (Kendall&Kendall, chapter 3), (Dennis &Wixom, chapter 3). 43

44 Activity-in-the-Box Network Diagrams (precedence)

45 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

46 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

47 1.When will the entire project be completed? 2.What are the critical activities or tasks in the project? 3.Which are the noncritical activities? 4.What is the probability the project will be completed by a specific date? Questions PERT & CPM Can Answer

48 5.Is the project on schedule, behind schedule, or ahead of schedule? 6.Is the money spent equal to, less than, or greater than the budget? 7.Are there enough resources available to finish the project on time? 8.If the project must be finished in a shorter time, what is the way to accomplish this at least cost? Questions PERT & CPM Can Answer

49 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 3.5

50 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 3.5

51 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 3.5

52 AON Example ActivityDescription Immediate Predecessors A Build internal components — B Modify roof and floor — C Construct collection stack A D Pour concrete and install frame A, B E Build high-temperature burner C F Install pollution control system C G Install air pollution device D, E H Inspect and test F, G Milwaukee Paper Manufacturing's Activities and Predecessors Table 3.1

53 AON Network for Milwaukee Paper A Start B Start Activity Activity A (Build Internal Components) Activity B (Modify Roof and Floor) Figure 3.6

54 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

55 AON Network for Milwaukee Paper G E F H C A Start DB Arrows Show Precedence Relationships Figure 3.8

56 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) 4C (Construct Stack) B (Modify Roof/Floor) A (Build Internal Components) Figure 3.9

57 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

58 Determining the Project Schedule Perform a Critical Path Analysis 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 Table 3.2

59 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

60 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

61 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}

62 Forward Pass Begin at starting event and work forward Earliest Finish Time Rule:  The earliest finish time (EF) of an activity is the sum of its earliest start time (ES) and its activity time EF = ES + Activity time

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

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

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

66 C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A2 20

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

68 D4D4 37 C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A2 20

69 E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A2 20 Figure 3.11

70 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}

71 Backward Pass Begin with the last event and work backwards Latest Start Time Rule:  The latest start time (LS) of an activity is the difference of its latest finish time (LF) and its activity time LS = LF – Activity time

72 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

73 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) 1013

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

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

76 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

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

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

79 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

80 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

81  CPM assumes we know a fixed time estimate for each activity and there is no variability in activity times  PERT uses a probability distribution for activity times to allow for variability Variability in Activity Times

82  Three time estimates are required  Optimistic time (a) – if everything goes according to plan  Pessimistic time (b) – assuming very unfavorable conditions  Most likely time (m) – most realistic estimate Variability in Activity Times

83 Estimate follows beta distribution Variability in Activity Times Expected time: Variance of times: t = (a + 4m + b)/6 v = [(b – a)/6] 2

84 Estimate follows beta distribution Variability in Activity Times Expected time: Variance of times: t = (a + 4m + b)/6 v = [(b − a)/6]2 Probability of 1 in 100 of > b occurring Probability of 1 in 100 of < a occurring Probability Optimistic Time (a) Most Likely Time (m) Pessimistic Time (b) Activity Time Figure 3.12

85 Computing Variance MostExpected OptimisticLikelyPessimisticTimeVariance Activity ambt = (a + 4m + b)/6[(b – a)/6] 2 A B C D E F G H Table 3.4

86 Probability of Project Completion Project variance is computed by summing the variances of critical activities  2 = Project variance =  (variances of activities on critical path) p

87 Probability of Project Completion Project variance is computed by summing the variances of critical activities Project variance  2 = = 3.11 Project standard deviation  p = Project variance = 3.11 = 1.76 weeks p

88 Probability of Project Completion PERT makes two more assumptions:  Total project completion times follow a normal probability distribution  Activity times are statistically independent

89 Probability of Project Completion Standard deviation = 1.76 weeks 15 Weeks (Expected Completion Time) Figure 3.13

90 Probability of Project Completion What is the probability this project can be completed on or before the 16 week deadline? Z=–/  p = (16 wks – 15 wks)/1.76 = 0.57 dueexpected date dateof completion Where Z is the number of standard deviations the due date or target date lies from the mean or expected date

91 Probability of Project Completion What is the probability this project can be completed on or before the 16 week deadline? Z=−/  p = (16 wks − 15 wks)/1.76 = 0.57 dueexpected date dateof completion Where Z is the number of standard deviations the due date or target date lies from the mean or expected date From Tablaeu

92 Probability of Project Completion Time Probability (T ≤ 16 weeks) is 71.57% Figure Standard deviations 1516 WeeksWeeks

93 Determining Project Completion Time Probability of 0.01 Z Figure 3.15 From Appendix I Probability of Standard deviations 02.33

94 Variability of Completion Time for Noncritical Paths  Variability of times for activities on noncritical paths must be considered when finding the probability of finishing in a specified time  Variation in noncritical activity may cause change in critical path

95 What Project Management Has Provided So Far  The project’s expected completion time is 15 weeks  There is a 71.57% chance the equipment will be in place by the 16 week deadline  Five activities (A, C, E, G, and H) are on the critical path  Three activities (B, D, F) are not on the critical path and have slack time  A detailed schedule is available

96 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

97 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

98 Steps in Project Crashing 1.Compute the crash cost per time period. If crash costs are linear over time: Crash cost per period = (Crash cost – Normal cost) (Normal time – Crash time) 2.Using current activity times, find the critical path and identify the critical activities

99 Steps in Project Crashing 3.If there is only one critical path, then select the activity on this critical path that (a) can still be crashed, and (b) has the smallest crash cost per period. If there is more than one critical path, then select one activity from each critical path such that (a) each selected activity can still be crashed, and (b) the total crash cost of all selected activities is the smallest. Note that the same activity may be common to more than one critical path.

100 Steps in Project Crashing 4.Update all activity times. If the desired due date has been reached, stop. If not, return to Step 2.

101 Crashing The Project Time (Wks)Cost ($)Crash CostCritical ActivityNormalCrashNormalCrashPer Wk ($)Path? A2122,00022,750750Yes B3130,00034,0002,000No C2126,00027,0001,000Yes D4248,00049,0001,000No E4256,00058,0001,000Yes F3230,00030,500500No G5280,00084,5001,500Yes H2116,00019,0003,000Yes Table 3.5

102 Crash and Normal Times and Costs for Activity B ||| 123Time (Weeks) $34,000 $34,000 — $33,000 $33,000 — $32,000 $32,000 — $31,000 $31,000 — $30,000 $30,000 — — Activity Cost CrashNormal Crash Time Normal Time Crash Cost Normal Cost Crash Cost/Wk = Crash Cost – Normal Cost Normal Time – Crash Time = $34,000 – $30,000 3 – 1 = = $2,000/Wk $4,000 2 Wks Figure 3.16

103 Critical Path And Slack Times For Milwaukee Paper Figure 3.17 E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A Slack = 1 Slack = 0 Slack = 6 Slack = 0

104 Advantages of PERT/CPM 1.Especially useful when scheduling and controlling large projects 2.Straightforward concept and not mathematically complex 3.Graphical networks help highlight relationships among project activities 4.Critical path and slack time analyses help pinpoint activities that need to be closely watched

105 Advantages of PERT/CPM 5.Project documentation and graphics point out who is responsible for various activities 6.Applicable to a wide variety of projects 7.Useful in monitoring not only schedules but costs as well

106 1.Project activities have to be clearly defined, independent, and stable in their relationships 2.Precedence relationships must be specified and networked together 3.Time estimates tend to be subjective and are subject to fudging by managers 4.There is an inherent danger of too much emphasis being placed on the longest, or critical, path Limitations of PERT/CPM

107 Project Execution Plan Project Execution Strategy Project Management Quality Safety Risk Management Design/Develop/Program Implementation Documentation Training

108 Prof. Dr. Ali ŞEN Contact Information Prof. Dr. Ali ŞEN


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