Roberta Russell & Bernard W. Taylor, III Chapter 9 Project Management Operations Management - 5th Edition Roberta Russell & Bernard W. Taylor, III

What is a Project? Project Examples 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

Project Elements Objective Scope Contract requirements Schedules Resources Personnel Control Risk and problem analysis

Project Management Process Project planning Project scheduling Project control Project team made up of individuals from various areas and departments within a company Matrix organization a team structure with members from functional areas, depending on skills required Project Manager most important member of project team

Project Management Scope Planning Objectives Resources Work break-down schedule Organization Scheduling Project activities Start & end times Network Controlling Monitor, compare, revise, action

Project Planning, Scheduling, and Controlling Before Start of project During project Timeline project

Project Planning, Scheduling, and Controlling Before Start of project During project Timeline project

Project Planning, Scheduling, and Controlling Before Start of project During project Timeline project

Project Planning, Scheduling, and Controlling Before Start of project During project Timeline project

Project Planning, Scheduling, and Controlling Time/cost estimates Budgets Engineering diagrams Cash flow charts Material availability details Project Planning, Scheduling, and Controlling Budgets Delayed activities report Slack activities report CPM/PERT Gantt charts Milestone charts Cash flow schedules Before Start of project During project Timeline project

Project Scope Scope statement Statement of work a document that provides an understanding, justification, and expected result of a project Statement of work written description of objectives of a project Work breakdown structure breaks down a project into components, subcomponents, activities, and tasks

Work Breakdown Structure for Computer Order Processing System Project

Organizational Breakdown Structure a chart that shows which organizational units are responsible for work items Responsibility Assignment Matrix shows who is responsible for work in a project

Project Scheduling Steps Techniques Define activities Sequence activities Estimate time Develop schedule Techniques Gantt chart CPM PERT Microsoft Project

Gantt Chart Graph or bar chart with a bar for each project activity that shows passage of time Provides visual display of project schedule Slack amount of time an activity can be delayed without delaying the project

Example of Gantt Chart Month 0 2 4 6 8 10 | | | | | 1 3 5 7 9 Activity | | | | | Activity Design house and obtain financing Lay foundation Order and receive materials Build house Select paint Select carpet Finish work 0 2 4 6 8 10 Month 1 3 5 7 9

Project Control Time management Cost management Quality management Performance management Earned Value Analysis a standard procedure for numerically measuring a project’s progress, forecasting its completion date and cost and measuring schedule and budget variation Communication Enterprise project management

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

Six Steps: CPM and PERT Define the project and prepare the work breakdown structure Develop relationships among the activities - decide which activities must precede and which must follow others Draw the network connecting all of the activities

Six Steps: CPM and PERT 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

Questions PERT & CPM Can Answer When will the entire project be completed? What are the critical activities or tasks in the project? Which are the noncritical activities? What is the probability the project will be completed by a specific date?

Questions PERT & CPM Can Answer Is the project on schedule, behind schedule, or ahead of schedule? Is the money spent equal to, less than, or greater than the budget? Are there enough resources available to finish the project on time? If the project must be finished in a shorter time, what is the way to accomplish this at least cost?

Project Network Activity-on-node (AON) Node Activity-on-arrow (AOA) 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 1 3 2 Branch Node

AON Network for House Building Project 1 3 2 4 5 6 7 Start Design house and obtain financing Order and receive materials Select paint Select carpet Lay foundations Build house Finish work

Critical Path Critical path 4 2 7 1 Start 3 6 5 A: 1-2-4-7 3 + 2 + 3 + 1 = 9 months B: 1-2-5-6-7 3 + 2 + 1 + 1 + 1 = 8 months C: 1-3-4-7 3 + 1 + 3 + 1 = 8 months D: 1-3-5-6-7 3 + 1 + 1 + 1 + 1 = 7 months Critical path Longest path through a network Minimum project completion time

Activity Start Times 4 2 7 1 3 6 5 Start at 5 months Finish at 9 months Finish

Node Configuration 1 3 Activity number Earliest start Earliest finish 3 Latest finish Activity duration Latest start

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

Earliest Activity Start and Finish Times Lay foundations Build house 2 3 5 Start 4 5 8 2 3 1 3 7 8 9 3 1 Design house and obtain financing Finish work 6 6 7 3 3 4 1 1 5 5 6 Select carpet 1 Order and receive materials Select paint

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

Latest Activity Start and Finish Times Lay foundations Build house 2 3 5 Start 4 5 8 2 3 5 3 5 8 1 3 7 8 9 3 3 1 8 9 Design house and obtain financing Finish work 6 6 7 3 3 4 1 7 8 1 4 5 5 5 6 Select carpet 1 6 7 Order and receive materials Select paint

Activity Slack Slack S EF LF ES LS Activity * Critical Path 9 8 *7 1 7 9 8 *7 1 7 6 5 *4 4 3 *2 *1 Slack S EF LF ES LS Activity

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