1. 2 – 1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Project Management 2

2. 2 – 2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Purchase and deliver equipment Construct hospital Develop information system Install medical equipment Train nurses and support staff Work Breakdown Structure Figure 2.1 Select administration staff Site selection and survey Select medical equipment Prepare final construction plans Bring utilities to site Interview applicants for nursing and support staff Organizing and Site PreparationPhysical Facilities and Infrastructure Level 1 Level 0 Level 2 Relocation of St. John’s Hospital

3. 2 – 3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. STU S precedes T, which precedes U. Diagramming the Network AON approach (Activity On Node) AONActivity Relationships S T U S and T must be completed before U can be started. Figure 2.2

4. 2 – 4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Diagramming the Network AONActivity Relationships T U S T and U cannot begin until S has been completed. S T U V U and V can’t begin until both S and T have been completed. Figure 2.2

5. 2 – 5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Diagramming the Network AONActivity Relationships S T U V U cannot begin until both S and T have been completed; V cannot begin until T has been completed. STV U T and U cannot begin until S has been completed and V cannot begin until both T and U have been completed. Figure 2.2

6. 2 – 6 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Network Diagram Figure 2.4

7. 2 – 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Project Schedule The earliest start time (ES) for an activity is the latest earliest finish time of any preceding activities The earliest finish time (EF) is the earliest start time plus its estimated duration The latest finish time (LF) for an activity is the latest start time of any preceding activities The latest start time (LS) is the latest finish time minus its estimated duration For simplicity, all projects start at time zero.

8. 2 – 8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Activity Slack Activity slack is the maximum length of time an activity can be delayed without delaying the entire project Activities on the critical path have zero slack Activity slack can be calculated in two ways S = LS – ES or S = LF – EF

9. 2 – 9 Calculation of Slack Time  Slack Time = LF – EF EF = summing Expected Time from left to right  If two or more activities precede an activity, choose the largest EF of these activities LF = summing Expected Time from right to left  Set LF equals to EF for the last activity  If two or more activities precede an activity, choose the smallest LF of these activities  Refers to the time in which an activity can be completed without delaying the project  Tasks on the critical path has Slack Time = 0  LS = LF - t; ES = EF - t

10. 2 – 10 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Gantt Chart Figure 2.5

11. 2 – 11 Comparison of Gantt Charts and Network Diagrams  Gantt Charts  Visually shows duration of tasks  Visually shows time overlap between tasks  Visually shows slack time  Network Diagrams  Visually shows dependencies between tasks  Visually shows which tasks can be done in parallel  Shows slack time by data in rectangles

12. 2 – 12 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Cost-Time Relationships Linear cost assumption 8000 — 7000 — 6000 — 5000 — 4000 — 3000 — 0 — Direct cost (dollars) |||||| 567891011 Time (weeks) Crash cost (CC) Normal cost (NC) (Crash time)(Normal time) Estimated costs for a 2-week reduction, from 10 weeks to 8 weeks 5200 Figure 2.6

13. 2 – 13 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Statistical Analysis ambMean Time Beta distribution amb Mean Time 3σ3σ3σ3σ Area under curve between a and b is 99.74% Normal distribution Figure 2.7

14. 2 – 14 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Statistical Analysis The mean of the beta distribution can be estimated by t e = a + 4m + b 6 The variance of the beta distribution for each activity is σ 2 = b – a 6 2

15. 2 – 15 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Analyzing Probabilities: Because the central limit theorem can be applied, the mean of the distribution is the earliest expected finish time for the project T E = = Expected activity times on the critical path  Mean of normal distribution Because the activity times are independent σ 2 =  (Variances of activities on the critical path) z = T – T E σ2σ2  Using the z-transformation where T = due date for the project