Reid & Sanders, Operations Management © Wiley 2002 Project Management 17 C H A P T E R

Reid & Sanders, Operations Management © Wiley 2002 Page 2 Learning Objectives Describe the project life cycle Describe the critical path method (CPM) Describe the program evaluation & review technique (PERT) Distinguish Activity-on-Arrow (AOA) & Activity-on- Node Diagrams Estimate the completion time of a project Identify critical activities that cannot be delayed without delaying the project Calculate the amount of available slack for non- critical activities

Reid & Sanders, Operations Management © Wiley 2002 Page 3 Definitions Project: –An endeavor with specific objectives & multiple activities with defined precedence relationships, to be completed within a limited duration Activities: –Specific tasks that must be completed & require resources Precedence relationships: –A natural order between activities, where some tasks must be complete before others can begin

Reid & Sanders, Operations Management © Wiley 2002 Page 4 Project Life Cycle Conception Feasibility analysis or study Planning Execution Termination

Reid & Sanders, Operations Management © Wiley 2002 Page 5 Network Planning Techniques Critical Path Method (CPM): –Developed to coordinate maintenance projects in the chemical industry –A complex undertaking, but individual tasks are routine (tasks’ duration = deterministic) Program Evaluation & Review Technique (PERT): –Developed to manage the Polaris missile project –Many tasks pushed the boundaries of science & engineering (tasks’ duration = probabilistic)

Reid & Sanders, Operations Management © Wiley 2002 Page 6 Both CPM & PERT Graphically display the precedence relationships & sequence of activities Estimate the project’s duration Identify critical activities that cannot be delayed without delaying the project Estimate the amount of slack associated with non-critical activities

Reid & Sanders, Operations Management © Wiley 2002 Page 7 Notation Activity-on-Arrow (AOA): –Each arrow represents an activity & its precedence relationship(s) –May require the use of “dummy” arrows if the activity has more than one successor task –Nodes used only as end-points for arrows Activity-on-Node (AON): –Uses nodes to represent the activity –Uses arrows to represent precedence relationships

Reid & Sanders, Operations Management © Wiley 2002 Page 8 AOA & AON Comparison

Reid & Sanders, Operations Management © Wiley 2002 Page 9 Example

Reid & Sanders, Operations Management © Wiley 2002 Page 10 AOA Diagram

Reid & Sanders, Operations Management © Wiley 2002 Page 11 AON Diagram

Reid & Sanders, Operations Management © Wiley 2002 Page 12 Add Activity Durations

Reid & Sanders, Operations Management © Wiley 2002 Page 13 Identify Unique Paths

Reid & Sanders, Operations Management © Wiley 2002 Page 14 Calculate Path Durations The longest path (ABDEGIJK) limits the project’s duration (project cannot finish in less time than its longest path) ABDEGIJK is the project’s critical path

Reid & Sanders, Operations Management © Wiley 2002 Page 15 Calculating the Slack of Non-Critical Activities All activities on the critical path have zero slack Slack defines how long non-critical activities can be delayed without delaying the project Slack = the activity’s late finish minus its early finish (or its late start minus its early start)

Reid & Sanders, Operations Management © Wiley 2002 Page 16 Calculate Activities’ Early Starts & Finishes

Reid & Sanders, Operations Management © Wiley 2002 Page 17 Calculate the Activities’ Late Starts & Finishes

Reid & Sanders, Operations Management © Wiley 2002 Page 18 Calculate Slack

Reid & Sanders, Operations Management © Wiley 2002 Page 19 Revisit Example Using Probabilistic Time Estimates

Reid & Sanders, Operations Management © Wiley 2002 Page 20 Use Beta Distribution to Estimate Expected Task Durations

Reid & Sanders, Operations Management © Wiley 2002 Page 21 Expected Task Durations

Reid & Sanders, Operations Management © Wiley 2002 Page 22 Build AOA Network & Identify Paths

Reid & Sanders, Operations Management © Wiley 2002 Page 23 Estimate Path Durations ABDEGIJK is the expected critical path & the project has an expected duration of weeks

Reid & Sanders, Operations Management © Wiley 2002 Page 24 The End Copyright © 2002 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United State Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies fo