PART SIX PROJECT MANAGEMENT Chapter Eighteen Project Management

Chapter 18 Project Management

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.

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

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

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

Concept Project Life Cycle Feasibility Planning Execution Termination Management

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

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

Work Breakdown Structure Figure 18-3 Project Level 1 Level 2 Level 3 Level 4

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

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

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

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

Network Conventions a b c d Dummy activity

Example 1 1 2 3 4 5 6 6 weeks Order furniture 3 weeks Furniture setup Locate facilities Order furniture Furniture setup Interview Hire and train Remodel Move in

Example 1 Solution Critical Path

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

Probabilistic Estimates Figure 18-10 Activity start Optimistic time Most likely time (mode) Pessimistic time o p m te

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

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

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

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

Time-Cost Trade-Offs: Crashing Figure 18-13 Total cost Shorten Cumulative cost of crashing Expected indirect costs Optimum CRASH

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

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

Important activities may be omitted Limitations of PERT Important activities may be omitted Precedence relationships may not be correct Estimates may include a fudge factor 1 2 3 4 5 6 142 weeks