6. Project Management

Project A set of partially ordered, interrelated activities that must be completed to achieve a goal

Project Management Decision-making, choosing between alternatives, managing activities as a part of the project Planning goal setting, project definition, team organization Scheduling relating people, money, and supplies to specific activities and activities to one and other Controlling monitoring resources, costs, and quality; revising plans and shifting resources to meet time and cost demands

Role of Project Manager All necessary activities are finished in order and on time The project comes in within budget The project meets quality goals The people assigned to the project receive motivation, direction, and information

Project Scheduling Identifying precedence relationships Sequencing activities Determining activity times & costs Estimating material and worker requirements Determining critical activities

Scheduling Techniques Gantt chart Network models Critical Path Method (CPM) Program Evaluation and Review Technique (PERT) Identify the longest time-consuming path through a network of activities required to complete a project

Gantt Chart: Service for a Delta Jet Passengers Baggage Fueling Cargo and mail Galley servicing Lavatory servicing Drinking water Cabin cleaning Flight services Operating crew Deplaning Baggage claim Container offload Pumping Engine injection water Main cabin door Aft cabin door Aft, center, forward Loading First-class section Economy section Container/bulk loading Galley/cabin check Receive passengers Aircraft check Boarding 0 15 30 45 60 Minutes

Key Terms for Network Models Forward pass To compute the earliest start (ES) and finish (EF) times for each activity Backward pass To compute the latest start (LS) and finish (LF) times for each activity without delaying the completion of the entire project Slack The length of time an activity can be delayed without delaying the entire project LS-ES or LF-EF

Key Terms for Network Models A Activity Name or Symbol Earliest Start ES Earliest Finish EF Latest Start LS Latest Finish LF Activity Duration 2

Key Terms for Network Models Critical path Zero slack for every activity on the path The longest path through the network The shortest time in which the project can be completed Any delay in critical path activities delays the project There may be several critical paths

Network Examples A B C A C B B A C A B C D A B C D A C D B

CPM and PERT Procedures Develop relationships among the activities - decide which activities must precede and which must follow others Draw the network connecting all of the activities Assign time and/or cost estimates to each activity Compute the longest time path through the network – this is called the critical path Use the network to help plan, schedule, monitor, and control the project

Immediate Predecessors CPM Example Activity Description Immediate Predecessors Time (Weeks) A Build internal components — 2 B Modify roof and floor 3 C Construct collection stack D Pour concrete and install frame A, B 4 E Build high-temperature burner F Install pollution control system G Install air pollution device D, E 5 H Inspect and test F, G

Continued G E F H C A Start D B

Continued E 4 F 3 G 5 H 2 8 13 15 7 10 D C B Start A 1

PERT PERT uses a probability distribution for activity times to allow for variability while CPM assumes fixed time estimate PERT uses two or three time estimates for each activity a: optimistic time, b: pessimistic time, m: most likely time Uniform distribution approximation expected time = (a+b)/2, variance = (b–a)2/12 Beta distribution approximation t = (a+4m+b)/6, v = (b–a)2/36

PERT Example Activity a m b t v A 1 2 3 2 .11 B 2 3 4 3 .11 C 1 2 3 2 .11 D 2 4 6 4 .44 E 1 4 7 4 1.00 F 1 2 9 3 1.78 G 3 4 11 5 1.78 H 1 2 3 2 .11

Probability of Project Completion Project variance is computed by summing variances of critical activities σ2 = .11+.11+1.00+1.78+.11 = 3.11 Total project completion times follow a normal probability distribution Probability to finish the project within 16 weeks? Pr(T<16) = Pr(Z<(16-15)/1.76)) = Pr(Z<0.57) = 0.716

(Dis)Advantages of CPM/PERT Especially useful for large projects Straightforward concept and not mathematically complex Graphical networks help to perceive relationships among project activities Critical path pinpoints activities that need to be closely watched Time estimates tend to be subjective Too much emphasis on the critical path

Project Crashing Shortening the duration of the project Steps: Compute the crash cost per time period Identify the critical path and activities Select an activity on the critical path that can be crashed with the smallest crash cost Repeat until the desired due date is reached

An Example Time (Wks) Cost ($) Crash Cost Critical Activity Normal Crash Normal Crash Per Wk ($) Path? A 2 1 22,000 22,750 750 Yes B 3 1 30,000 34,000 2,000 No C 2 1 26,000 27,000 1,000 Yes D 4 2 48,000 49,000 1,000 No E 4 2 56,000 58,000 1,000 Yes F 3 2 30,000 30,500 500 No G 5 2 80,000 84,500 1,500 Yes H 2 1 16,000 19,000 3,000 Yes

Video Case Study Develop the network for planning and construction of the new hospital at Arnold Palmer. What is the critical path and how long is the project expected to take? Why is the construction of this 11-story building any more complex than construction of an equivalent office building? What percent of the whole project duration was spent in planning that occurred prior to the proposal and reviews? Prior to the actual building construction? Why?