1. © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Chapter 6 Project Management

2. 2000 by Prentice-Hall, Inc2 A Project is  Unique  One-time operation  Containing an interrelated set of unique activities  Has a definite starting and end point  Is designed to accomplish a specific set of objectives  In a limited time frame

3. 2000 by Prentice-Hall, Inc3 Project management  The planning, directing, and control of resources (people, equipment, and material) to meet the technical and cost constraints of the project

4. 2000 by Prentice-Hall, Inc4 Examples:  Constructing a shopping complex  Installing a new computer system  Developing a new space shuttle  Introducing a new product or service into the marketplace  Redesigning the layout of a plant or office

5. 2000 by Prentice-Hall, Inc5 Ch 17 - 3 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Project Planning  Statement of work written description of goals, work & time frame of project  Activities require labor, resources & time  Precedence relationship shows sequential relationship of project activities

6. 2000 by Prentice-Hall, Inc6 Ch 17 - 4 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Simplified Project Network 132 Construct forms Pour concrete

7. 2000 by Prentice-Hall, Inc7 Ch 17 - 5 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Elements Of Project Planning  Define project objective(s)  Identify activities  Establish precedence relationships  Make time estimates  Determine project completion time  Compare project schedule objectives  Determine resource requirements to meet objective

8. 2000 by Prentice-Hall, Inc8 Ch 17 - 7 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Gantt Chart  Popular tool for project scheduling  Graph with bar for representing the time for each task  Provides visual display of project schedule  Also shows slack for activities (amount of time activity can be delayed without delaying project)

9. 2000 by Prentice-Hall, Inc9 Ch 17 - 8 © 2000by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e 2 0 41068 31579 Month   Activity Design house and obtain financing Lay foundation Order and receive materials Build house Select paint Select carpet Finish work A Gantt Chart

10. 2000 by Prentice-Hall, Inc10 Ch 17 - 9 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e CPM/PERT  Critical Path Method (CPM) DuPont & Remington-Rand (1956) deterministic task times  Project Evaluation & Review Technique (PERT) US Navy, Booz, Allen & Hamilton multiple task time estimates

11. 2000 by Prentice-Hall, Inc11 Ch 17 - 10 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e The Project Network Network consists of branches & nodes 132 Branch Node

12. 2000 by Prentice-Hall, Inc12 Ch 17 - 12 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Project Network For A House 124 6 7 3 5 3 2 0 1 3 1 1 1 Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house

13. 2000 by Prentice-Hall, Inc13 Ch 17 - 13 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Critical Path  A path is a sequence of connected activities running from start to end node in network  The critical path is the path with the longest duration in the network  Project cannot be completed in less than the time of the critical path

14. 2000 by Prentice-Hall, Inc14 Ch 17 - 15 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Concurrent Activities 4 3 2 Dummy Lay foundation 2 3 Lay foundation Order material Incorrect precedence relationship Correct precedence relationship

15. 2000 by Prentice-Hall, Inc15 Ch 17 - 16 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Early Times (Housebuilding example)  ES - earliest time activity can start  Forward pass starts at beginning of CPM/PERT network to determine ES times  EF = ES + activity time

16. 2000 by Prentice-Hall, Inc16 Ch 17 - 18 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Late Times  LS - latest time activity can start & not delay project  Backward pass starts at end of CPM/PERT network to determine LS times  LS = LF - activity time

17. 2000 by Prentice-Hall, Inc17 Ch 17 - 21 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Activity Slack  Activities on critical path have ES=LS & EF=LF  Activities not on critical path have slack S ij = LS ij - ES ij S ij = LF ij - EF ij

18. 2000 by Prentice-Hall, Inc18 Ch 17 - 23 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Probabilistic Time Estimates  Reflect uncertainty of activity times  Beta distribution is used in PERT b - a 6 ( ) Variance:  2 = a = optimistic estimate m = most likely time estimate b = pessimistic time estimate Where, 2 Mean (expected time): a + 4m + b 6 t =

19. 2000 by Prentice-Hall, Inc19 Ch 17 - 25 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Example 1 2 4 6 7359 8 Manual Testing Dummy System Training Dummy System Testing Orientation Position recruiting System development Equipment installation Equipment testing and modification Final debugging System changeover Job training

20. 2000 by Prentice-Hall, Inc20 Ch 17 - 29 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Project Variance  Project variance is the sum of variances on the critical path

21. 2000 by Prentice-Hall, Inc21 Ch 17 - 30 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Probabilistic Network Analysis Determine probability that project is completed within specified time where  = t p = project mean time  = project standard deviation x = proposed project time Z = number of standard deviations x is from mean Z = x -  

22. 2000 by Prentice-Hall, Inc22 Ch 17 - 31 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Normal Distribution Of Project Time  = t p Timex ZZ Probability

23. 2000 by Prentice-Hall, Inc23 Ch 17 - 32 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Probabilistic Analysis Example What is the probability that the project is completed within 30 weeks?

24. 2000 by Prentice-Hall, Inc24 Ch 17 - 33 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Determining Probability From Z Value Z0.000.01...0.09 1.90.47130.4719…0.4767............  = 25 Time (weeks) x = 30 P( x<= 30 weeks) = 0.9719