Copyright 2006 John Wiley & Sons, Inc. Beni Asllani University of Tennessee at Chattanooga Project Management Operations Management - 5 th Edition Chapter 9 Roberta Russell & Bernard W. Taylor, III

Copyright 2006 John Wiley & Sons, Inc.9-2 Lecture Outline Project Planning Project Scheduling Project Control CPM/PERT

Copyright 2006 John Wiley & Sons, Inc.9-3 What is a Project? Project unique, one-time operational activity or effort Examples constructing houses, factories, shopping malls, athletic stadiums or arenas developing military weapons systems, aircrafts, new ships launching satellite systems constructing oil pipelines developing and implementing new computer systems planning concert, football games, or basketball tournaments introducing new products into market

Copyright 2006 John Wiley & Sons, Inc.9-4 Project Elements Objective Objective Scope Scope Contract requirements Contract requirements Schedules Schedules Resources Resources Personnel Personnel Control Control Risk and problem analysis Risk and problem analysis

Copyright 2006 John Wiley & Sons, Inc.9-5 Project Management Process Project planning Project planning Project scheduling Project scheduling Project control Project control Project team Project team made up of individuals from various areas and departments within a company made up of individuals from various areas and departments within a company Matrix organization Matrix organization a team structure with members from functional areas, depending on skills required a team structure with members from functional areas, depending on skills required Project Manager Project Manager most important member of project team most important member of project team

Copyright 2006 John Wiley & Sons, Inc.9-6 Project Scope Scope statement Scope statement a document that provides an understanding, justification, and expected result of a project a document that provides an understanding, justification, and expected result of a project Statement of work Statement of work written description of objectives of a project written description of objectives of a project Work breakdown structure Work breakdown structure breaks down a project into components, subcomponents, activities, and tasks breaks down a project into components, subcomponents, activities, and tasks

Copyright 2006 John Wiley & Sons, Inc.9-7 Work Breakdown Structure for Computer Order Processing System Project

Copyright 2006 John Wiley & Sons, Inc.9-8 Organizational Breakdown Structure Organizational Breakdown Structure a chart that shows which organizational units are responsible for work items a chart that shows which organizational units are responsible for work items Responsibility Assignment Matrix Responsibility Assignment Matrix shows who is responsible for work in a project shows who is responsible for work in a project

Copyright 2006 John Wiley & Sons, Inc.9-9 Project Scheduling Steps Steps Define activities Define activities Sequence activities Sequence activities Estimate time Estimate time Develop schedule Develop schedule Techniques Techniques Gantt chart Gantt chart CPM CPM PERT PERT Microsoft Project Microsoft Project

Copyright 2006 John Wiley & Sons, Inc.9-10 Gantt Chart Graph or bar chart with a bar for each project activity that shows passage of time Provides visual display of project schedule Provides visual display of project schedule Slack amount of time an activity can be delayed without delaying the project

Copyright 2006 John Wiley & Sons, Inc.9-11 |||||||||| Activity Design house and obtain financing Lay foundation Order and receive materials Build house Select paint Select carpet Finish work MonthMonth Example of Gantt Chart

Copyright 2006 John Wiley & Sons, Inc.9-12 Project Control Time management Time management Cost management Cost management Quality management Quality management Performance management Performance management Earned Value Analysis Earned Value Analysis a standard procedure for numerically measuring a projects progress, forecasting its completion date and cost and measuring schedule and budget variation a standard procedure for numerically measuring a projects progress, forecasting its completion date and cost and measuring schedule and budget variation Communication Communication Enterprise project management Enterprise project management

Copyright 2006 John Wiley & Sons, Inc.9-13 CPM/PERT Critical Path Method (CPM) Critical Path Method (CPM) DuPont & Remington-Rand (1956) DuPont & Remington-Rand (1956) Deterministic task times Deterministic task times Activity-on-node network construction Activity-on-node network construction Project Evaluation and Review Technique (PERT) Project Evaluation and Review Technique (PERT) US Navy, Booz, Allen & Hamilton US Navy, Booz, Allen & Hamilton Multiple task time estimates Multiple task time estimates Activity-on-arrow network construction Activity-on-arrow network construction

Copyright 2006 John Wiley & Sons, Inc.9-14 Project Network Activity-on-node (AON) nodes represent activities, and arrows show precedence relationships Activity-on-arrow (AOA) arrows represent activities and nodes are events for points in time Event completion or beginning of an activity in a project Branch Node

Copyright 2006 John Wiley & Sons, Inc.9-15 AOA Project Network for a House Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house

Copyright 2006 John Wiley & Sons, Inc.9-16 Concurrent Activities 23 Lay foundation Order material (a)Incorrect precedence relationship (b)Correct precedence relationship 3 42 Dummy Layfoundation Order material 1 20

Copyright 2006 John Wiley & Sons, Inc.9-17 AON Network for House Building Project Start Design house and obtain financing Order and receive materials Select paint Select carpet Lay foundations Build house Finish work

Copyright 2006 John Wiley & Sons, Inc Start Critical Path Critical path Critical path Longest path through a network Longest path through a network Minimum project completion time Minimum project completion time A: = 9 months B: = 8 months C: = 8 months D: = 7 months

Copyright 2006 John Wiley & Sons, Inc.9-19 Activity Start Times Start Start at 3 months Start at 6 months Start at 5 months Finish at 9 months Finish

Copyright 2006 John Wiley & Sons, Inc.9-20 Mode Configuration Activity number Activity duration Earliest start Latest start Earliest finish Latest finish

Copyright 2006 John Wiley & Sons, Inc.9-21 Forward Pass Start at the beginning of CPM/PERT network to determine the earliest activity times Earliest Start Time (ES) earliest time an activity can start ES = maximum EF of immediate predecessors Earliest finish time (EF) earliest time an activity can finish earliest start time plus activity time EF= ES + t

Copyright 2006 John Wiley & Sons, Inc.9-22 Earliest Activity Start and Finish Times Start Design house and obtain financing Select pain Lay foundations Select carpet Build house Finish work Order and receive materials

Copyright 2006 John Wiley & Sons, Inc.9-23 Backward Pass Determines latest activity times by starting at the end of CPM/PERT network and working backward Latest Start Time (LS) Latest time an activity can start without delaying critical path time LS= LF - t Latest finish time (LF) latest time an activity can be completed without delaying critical path time LS = minimum LS of immediate predecessors

Copyright 2006 John Wiley & Sons, Inc.9-24 Latest Activity Start and Finish Times Start Design house and obtain financing Select pain Lay foundations Select carpet Build house Finish work Order and receive materials

Copyright 2006 John Wiley & Sons, Inc.9-25 * Critical Path *7* *4* *2* *1*1 Slack S EF LF ES LS Activity Activity Slack