Project Management Dr. Michael Busing COB 300C Project Management Dr. Michael Busing

PERT ANALYSIS Optimistic-Likely-Pessimistic Project Times If you hold someone to a certain number, they will base it on past experience and this may be way off base When given three times (optimistic, likely, pessimistic) we will compute an average or expected value. The times are assumed to follow the “beta” distribution – i.e., activity times may not follow the normal distribution

PERT Formulae

Activity A B C D E F G Expected Time 2 8 4 1 5 6 Variance 0.11 2.78     Activity A B C D E F G Expected Time 2 8 4 1 5 6 Variance 0.11 2.78 1.78

The activity completion time (i. e The activity completion time (i.e., 16) is only as good as my expected completion times.   Expected completion time = 16 Variance of project completion time = sum of variance of all activities on the critical path. Note: in the event of multiple critical paths, compute the variance for each and take the largest. 2.78 + 0.11 + 1.78 = 4.67

Question: What is the probability that the project will be completed in 16 weeks or less?  

Question: What is the probability that the project will be completed in 18 weeks or less? Question: P (T< 18)?  

Question: What is the probability that the project will be completed in 14 weeks or less? Question: P (T< 14)?  

Question: What is the probability that the project will not be completed within 21 weeks? Question: P (T> 21)?  

Resource Loading Charts   Tells us how much money or labor you need and when you need it. Computer software is excellent with resource loading charts (e.g., Pritsker, M.S., etc.) Problem 4 – capital and man-power resource loading chart Resource Leveling – move some of the non-critical activities so that the weekly total is level or stable. We would then be interested in the peak usage weeks.

Final Word on Project Management   Why would you want to be involved with project crashing? Incentives for completing a project early Penalties for completing a project late How to finish early? Give more resources to certain activities – this is called project crashing. Crashing, however costs money. 1.     Only consider critical path activities. 2.     Don’t go from 16 to 10 in one step. You must decrease time 1 unit at a time. 3.     Total cost of crashing is sum of crashing cost for all crashed activities.

Project Crashing (example) How to take project completion time from 16 to 10 weeks?   A – C – F =11 B – D – F = 14 B – E – G = 16