1. Roberta Russell & Bernard W. Taylor, III
Chapter 9
Project Management
Operations Management - 5th Edition
Roberta Russell & Bernard W. Taylor, III

2. What is a Project? Project Examples
unique, one-time operational activity or effort
Examples
constructing houses, factories, shopping malls, athletic stadiums or arenas
developing military weapons systems, aircrafts, new ships
launching satellite systems
constructing oil pipelines
developing and implementing new computer systems
planning concert, football games, or basketball tournaments
introducing new products into market

3. Project Elements Objective Scope Contract requirements Schedules
Resources
Personnel
Control
Risk and problem analysis

4. Project Management Process
Project planning
Project scheduling
Project control
Project team
made up of individuals from various areas and departments within a company
Matrix organization
a team structure with members from functional areas, depending on skills required
Project Manager
most important member of project team

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

6. Project Planning, Scheduling, and Controlling
Before Start of project During
project Timeline project

7. Project Planning, Scheduling, and Controlling
Before Start of project During
project Timeline project

8. Project Planning, Scheduling, and Controlling
Before Start of project During
project Timeline project

9. Project Planning, Scheduling, and Controlling
Before Start of project During
project Timeline project

10. Project Planning, Scheduling, and Controlling
Time/cost estimates
Budgets
Engineering diagrams
Cash flow charts
Material availability details
Project Planning, Scheduling, and Controlling
Budgets
Delayed activities report
Slack activities report
CPM/PERT
Gantt charts
Milestone charts
Cash flow schedules
Before Start of project During
project Timeline project

11. Project Scope Scope statement Statement of work
a document that provides an understanding, justification, and expected result of a project
Statement of work
written description of objectives of a project
Work breakdown structure
breaks down a project into components, subcomponents, activities, and tasks

12. Work Breakdown Structure for Computer Order Processing System Project

13. Organizational Breakdown Structure
a chart that shows which organizational units are responsible for work items
Responsibility Assignment Matrix
shows who is responsible for work in a project

14. Project Scheduling Steps Techniques Define activities
Sequence activities
Estimate time
Develop schedule
Techniques
Gantt chart
CPM
PERT
Microsoft Project

15. Gantt Chart
Graph or bar chart with a bar for each project activity that shows passage of time
Provides visual display of project schedule
Slack
amount of time an activity can be delayed without delaying the project

16. Example of Gantt Chart Month 0 2 4 6 8 10 | | | | | 1 3 5 7 9 Activity
| | | | |
Activity
Design house and obtain financing
Lay foundation
Order and receive materials
Build house
Select paint
Select carpet
Finish work
Month

17. Project Control Time management Cost management Quality management
Performance management
Earned Value Analysis
a standard procedure for numerically measuring a project’s progress, forecasting its completion date and cost and measuring schedule and budget variation
Communication
Enterprise project management

18. CPM/PERT Critical Path Method (CPM)
DuPont & Remington-Rand (1956)
Deterministic task times
Activity-on-node network construction
Project Evaluation and Review Technique (PERT)
US Navy, Booz, Allen & Hamilton
Multiple task time estimates
Activity-on-arrow network construction

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

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

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

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

23. Project Network Activity-on-node (AON) Node Activity-on-arrow (AOA)
nodes represent activities, and arrows show precedence relationships
Activity-on-arrow (AOA)
arrows represent activities and nodes are events for points in time
Event
completion or beginning of an activity in a project 1 3 2
Branch
Node

24. AON Network for House Building Project1 3 2 4 5 6 7
Start
Design house and obtain financing
Order and receive materials
Select paint
Select carpet
Lay foundations
Build house
Finish work

25. Critical Path Critical path 4 2 7 1 Start 3 6 5
A: = 9 months
B: = 8 months
C: = 8 months
D: = 7 months
Critical path
Longest path through a network
Minimum project completion time

26. Activity Start Times 4 2 7 1 3 6 5 Start at 5 months
Finish at 9 months
Finish

27. Node Configuration 1 3 Activity number Earliest start Earliest finish3
Latest finish
Activity duration
Latest start

28. Forward Pass
Start at the beginning of CPM/PERT network to determine the earliest activity times
Earliest Start Time (ES)
earliest time an activity can start
ES = maximum EF of immediate predecessors
Earliest finish time (EF)
earliest time an activity can finish
earliest start time plus activity time
EF= ES + t

29. Earliest Activity Start and Finish Times
Lay foundations
Build house 2 3 5
Start 4 5 8 2 3 1 3 7 8 9 3 1
Design house and obtain financing
Finish work 6 6 7 3 3 4 1 1 5 5 6
Select carpet 1
Order and receive materials
Select paint

30. Backward Pass
Determines latest activity times by starting at the end of CPM/PERT network and working backward
Latest Start Time (LS)
Latest time an activity can start without delaying critical path time
LS= LF - t
Latest finish time (LF)
latest time an activity can be completed without delaying critical path time
LS = minimum LS of immediate predecessors

31. Latest Activity Start and Finish Times
Lay foundations
Build house 2 3 5
Start 4 5 8 2 3 5 3 5 8 1 3 7 8 9 3 3 1 8 9
Design house and obtain financing
Finish work 6 6 7 3 3 4 1 7 8 1 4 5 5 5 6
Select carpet 1 6 7
Order and receive materials
Select paint

32. Activity Slack Slack S EF LF ES LS Activity * Critical Path 9 8 *7 1 79 8 *7 1 7 6 5 *4 4 3 *2 *1
Slack S EF LF ES LS
Activity

33. Using OM Tools
Now let’s look at this problem in OM Tools