Chapter 3 Project Management

Project Management Projects are typically characterized as: one-time, large scale operations consuming large amount of resources requiring a long time to complete a complex set of many activities 3 Important Project Management Functions: Planning – determine what needs to be done Scheduling – decide when to do activities Controlling – see that it’s done right

PERT/CPM project management technique (Program Evaluation & Review Technique)/ (Critical Path Method) Inputs list of activities precedence relationships activity durations Outputs project duration critical activities slack for each activity

Excavate & pour footings 1 2 Excavate & pour footings Pour foundation Install drains Project Network for House Construction 3 6 7 4 8 9 5 10 11 12 16 18 13 17 15 14 Install rough electrical & plumbing Pour basement floor Install cooling & heating Erect frame & roof Lay brickwork storm drains drywall flooring finished plumbing kitchen equipment Paint Finish roof drainage grading floors walks; Landscape electrical work carpeting

CPM A project has the following activities and precedence relationships: Immediate Immediate Predecessor Predecessor Activity Activities Activity Activities a -- f c,e b a g b c a h b,d d a i b,d e b j f,g,h Construct a CPM network for the project using: 1.) Activity on arrow 2.) Activity on node

Activity on Arrow (Initial Network)

Activity on Arrow (Final Network) b c d e f g h i j

Activity on Node

Critical Path path  any route along the network from start to finish Critical Path  path with the longest total duration This is the shortest time the project can be completed. Critical Activity  an activity on the critical path *If a critical activity is delayed, the entire project will be delayed. Close attention must be given to critical activities to prevent project delay. There may be more than one critical path. To find critical path: (brute force approach) identify all possible paths from start to finish sum up durations for each path largest total indicates critical path

1 2 6 4 7 5 3 b = 2 d = 4 g = 9 h = 9 f = 8 c = 5 a = 6 k = 6 j = 7 i = 4 e = 3

Slack Times Earliest Start (ES) – the earliest time an activity can start ES = largest EF of all immediate predecessors Earliest Finish (EF) – the earliest time an activity can finish EF = ES + activity duration Latest Finish (LF) – the latest time an activity can finish without delaying the project LF = smallest LS of all immediate followers Latest Start (LS) – the latest time an activity can start LS = LF – activity duration

Slack Times Slack  how much an activity can be delayed without delaying the entire project Slack = LF – EF or Slack = LS – ES Slack EF LF ES LS

c = 10 g = 12 f = 17 b =15 a = 10 e = 15 i = 7 d = 20 h = 9

b = 4 d = 5 h = 5 i = 3 c = 5 a = 5 g = 4 j = 6 e = 5 f = 6

Input Table for Microsoft Project (Example 10.1, page 387)

Gantt Chart for Microsoft Project (Example 10.1, page 387)

Project Network for Microsoft Project (Example 10.1, page 387)

Activity Crashing (Time-Cost Tradeoffs) An activity can be performed in less time than normal, but it costs more. Problem: If project needs to be completed earlier than normal, which activity durations should be decreased so as to minimize additional costs? Guidelines: Only crash critical activities Crash activities one day at a time Crash critical activity with lowest crashing cost per day first Multiple critical paths must all be crashed by one day

Activity Crashing Example Crash project as much as possible. a = 3 b = 4 c = 8 d = 5 Activity Duration Crashed Cost Crashing Cost/day a 3 2 40 45 b 4 50 54 c 8 5 68 d 30 33 Minimum duration = 9 days; Total additional cost = $30

Program Evaluation & Review Technique (PERT) 3 duration time estimates optimistic (to), most likely (tm), pessimistic (tp) Activity duration: mean te = (to + 4tm + tp) / 6 variance Vt = [(tp – to) / 6]2 Path duration: mean of path duration = T = Σ te variance of path duration = σ2 = Σ Vt

X = T ± Zσpath Z is number of standard deviations that X is from the mean. Example: If the mean duration of the critical path is 55 days and the variance of this path is 16, what is the longest the project should take using a 95% confidence level?

probability of being late .05 Zσcp actual project duration T 55 X

PERT Example If the expected duration of a project is 40 days and the variance of the critical path is 9 days, what is the probability that the project will complete in less than 45 days? in more than 35 days? in less than 35 days? in between 35 and 45 days?

probability of being late Zσcp actual project duration T 40 45

PERT Example The expected duration of a project is 200 days, and the standard deviation of the critical path is 10 days. Predict a completion time that you are 90% sure you can meet.