1 Project Scheduling CP - Chapter 10 Lecture 3

2 Project Management  How is it different?  Limited time frame  Narrow focus, specific objectives  Why is it used?  Special needs  Pressures for new or improves products or services  Definition of a project  Unique, one-time sequence of activities designed to accomplish a specific set of objectives in a limited time frame

3 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

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

5 Project Manager Responsible for: WorkQuality Human ResourcesTime CommunicationsCosts

6  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 Key Decisions

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

8 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  PERT and CPM have been used to plan, schedule, and control a wide variety of projects:  R&D of new products and processes  Construction of buildings and highways  Maintenance of large and complex equipment  Design and installation of new systems

9 PERT/CPM  PERT/CPM  used to plan the scheduling of individual activities that make up a project.  Projects may have as many as several thousand activities.  Complicating factor in carrying out the activities  some activities depend on the completion of other activities before they can be started.

10 PERT/CPM  Project managers rely on PERT/CPM to help them answer questions such as:  What is the total time to complete the project?  What are the scheduled start and finish dates for each specific activity?  Which activities are critical?  must be completed exactly as scheduled to keep the project on schedule?  How long can non-critical activities be delayed  before they cause an increase in the project completion time?

11 Planning and Scheduling Locate new facilities Interview staff Hire and train staff Select and order furniture Remodel and install phones Furniture setup Move in/startup Activity

12 Project Network  Project network  constructed to model the precedence of the activities.  Nodes represent activities  Arcs represent precedence relationships of the activities  Critical path for the network  a path consisting of activities with zero slack

13 Project Network – An Example A B C E F Locate facilities Order furniture Furniture setup Interview Remodel Move in D Hire and train GS 8 weeks 6 weeks 3 weeks 4 weeks 9 weeks 11 weeks 1 week

14 Management Scientist Solution Critical Path

15  Three-time estimate approach  the time to complete an activity assumed to follow a Beta distribution  An activity’s mean completion time is: t = (a + 4m + b)/6  a = the optimistic completion time estimate  b = the pessimistic completion time estimate  m = the most likely completion time estimate  An activity’s completion time variance is  2 = (( b - a )/6) 2 Uncertain Activity Times

16 Uncertain Activity Times  In the three-time estimate approach, the critical path is determined as if the mean times for the activities were fixed times.  The overall project completion time is assumed to have a normal distribution  with mean equal to the sum of the means along the critical path, and  variance equal to the sum of the variances along the critical path.

17 Activity Immediate Predecessor Optimistic Time (a) Most Likely Time (m) Pessimistic Time (b) A--468 B CA333 DA456 EA FB,C345 G HE,F567 I 258 JD,H KG,I357Example

18 Management Scientist Solution

19  Network activities  ES: early start  EF: early finish  LS: late start  LF: late finish  Used to determine  Expected project duration  Slack time  Critical path Key Terminology

20 The Network Diagram (cont’d)  Path  Sequence of activities that leads from the starting node to the finishing node  AON path: S  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

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

22 Advantages of PERT  Forces managers to organize  Provides graphic display of activities  Identifies  Critical activities  Slack activities

23 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