3 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall  Complex and temporary task of many related activities. (not ‘business as usual’)  May disrupt normal operations. (Mgt has to complete project AND keep business going)  Will have time pressure and budget limits. (work smarter not harder) Project Characteristics

3 - 2© 2011 Pearson Education, Inc. publishing as Prentice Hall Project Management Institute : Project Life Cycle model

3 - 3© 2011 Pearson Education, Inc. publishing as Prentice Hall  Is a temporary structure  Uses specialists from many departments in a matrix organisation.  Headed by project manager who  Coordinates activities  Monitors time schedule and costs  Accepts responsibility for project completion  Is the ‘one-point-of-contact’. Project Organization

3 - 4© 2011 Pearson Education, Inc. publishing as Prentice Hall Project Organization needed when... 1.Work is defined with a specific goal and deadline (SMART) 2.Work is unique or unfamiliar to the existing organization (one-off) 3.Work contains complex tasks requiring specialized skills and team work. (coordination & communication ) 4.Work is temporary and critical to the organization (high priority/change management) 5.Work cuts across department boundaries. (involves staff working in teams)

3 - 5© 2011 Pearson Education, Inc. publishing as Prentice Hall The Role of the Project Manager Highly visible / project leadership / project responsibility 1.All activities are finished in order and on time (planning, coordinating, organising) 2.The project is complete within budget (monitoring) 3.The project meets quality goals (controlling) 4.The project people are motivated, directed, and informed (leading)

3 - 6© 2011 Pearson Education, Inc. publishing as Prentice Hall  Planning  Objectives  Resources  Work break-down structure  Organization  Scheduling  Project activities  Start & end times  Network  Controlling  Monitor, compare, revise, action Project Management Activities

3 - 7© 2011 Pearson Education, Inc. publishing as Prentice Hall Project Planning, Scheduling, and Controlling Figure 3.1 BeforeStart of projectDuring projectTimelineproject

3 - 8© 2011 Pearson Education, Inc. publishing as Prentice Hall Project Planning, Scheduling, and Controlling Figure 3.1 BeforeStart of projectDuring projectTimelineproject

3 - 9© 2011 Pearson Education, Inc. publishing as Prentice Hall Project Planning, Scheduling, and Controlling Figure 3.1 BeforeStart of projectDuring projectTimelineproject

3 - 10© 2011 Pearson Education, Inc. publishing as Prentice Hall Project Planning, Scheduling, and Controlling Figure 3.1 BeforeStart of projectDuring projectTimelineproject

3 - 11© 2011 Pearson Education, Inc. publishing as Prentice Hall Project Planning, Scheduling, and Controlling Figure 3.1 BeforeStart of projectDuring projectTimelineproject Budgets Delayed activities report Slack activities report Time/cost estimates Budgets Engineering diagrams Cash flow charts Material availability details CPM/PERT Gantt charts Milestone charts Cash flow schedules

3 - 12© 2011 Pearson Education, Inc. publishing as Prentice Hall  Establishing business objectives  Defining project (scope)  Creating work breakdown structure  Determining resources  Forming organization Project Planning

3 - 13© 2011 Pearson Education, Inc. publishing as Prentice Hall Work Breakdown Structure Level 1.Project 2.Major tasks in the project 3.Subtasks in the major tasks 4.Activities (or work packages) to be completed

3 - 14© 2011 Pearson Education, Inc. publishing as Prentice Hall Level 4 Compatible with Windows ME Compatible with Windows Vista Compatible with Windows XP (Work packages) Level 3 Develop GUIs Planning Module Testing Ensure Compatibility with Earlier Versions Cost/Schedule Management Defect Testing Work Breakdown Structure Figure 3.3 Level 2 Software Design Project Management System Testing Level 1 Develop Windows 7 Operating System 1.0

3 - 15© 2011 Pearson Education, Inc. publishing as Prentice Hall Project Scheduling  Identifying precedence relationships  Sequencing activities  Determining activity times & costs  Estimating material & worker requirements  Determining critical activities

3 - 16© 2011 Pearson Education, Inc. publishing as Prentice Hall  Gantt chart  Critical Path Method (CPM)  Program Evaluation and Review Technique (PERT) Project Management Techniques for scheduling

3 - 17© 2011 Pearson Education, Inc. publishing as Prentice Hall A Simple Gantt Chart Time J F M A M J J A S Design Prototype Test Revise Production

3 - 18© 2011 Pearson Education, Inc. publishing as Prentice Hall  Network planning techniques  Developed in 1950’s  CPM by DuPont for chemical plants (1957)  PERT by Booz, Allen & Hamilton with the U.S. Navy, for Polaris missile (1958)  uncovers precedence and interdependence of stages.  Difference is  CPM has fixed times for each stage  PERT has a statistical range for times for each stage PERT and CPM

3 - 19© 2011 Pearson Education, Inc. publishing as Prentice Hall Six Steps PERT & CPM 1.Define the project and prepare the work breakdown structure 2.Identify which activities must precede and/or follow other activities. 3.Draw the network connecting the activities 4.Assign times & costs to each activity 5.Find the longest time path through the network – this is called the critical path 6.Use the network to help plan, schedule, monitor, and control the project

3 - 20© 2011 Pearson Education, Inc. publishing as Prentice Hall 1.When will the project be completed? 2.What are the critical activities or tasks in the project? (no float time / must be finished on time or cause delay) 3.Which are the noncritical activities? (some float time / can be delayed without changing time for whole project) 4.What is the probability the project will be completed by a specific date? (PERT not CPM) Questions PERT & CPM Can Answer

3 - 21© 2011 Pearson Education, Inc. publishing as Prentice Hall 5.Is the project on schedule, behind schedule, or ahead of schedule? (timing of milestones) 6.Is the money spent equal to, less than, or greater than the budget? 7.Are there enough resources available to finish the project on time? 8.If the project must be finished in a shorter time, what is the way to accomplish this at least cost? Questions PERT & CPM Can Answer

3 - 22© 2011 Pearson Education, Inc. publishing as Prentice Hall Critical Path Example ActivityDescription Immediate Predecessors ABuild internal components— BModify roof and floor— CConstruct collection stackA DPour concrete and install frameA, B EBuild high-temperature burnerC FInstall pollution control systemC GInstall air pollution deviceD, E HInspect and testF, G Milwaukee Paper Manufacturing's Activities and Predecessors Table 3.1

3 - 23© 2011 Pearson Education, Inc. publishing as Prentice Hall AON Network for Milwaukee Paper G E F H C A Start DB Arrows Show Precedence Relationships Figure 3.8

3 - 24© 2011 Pearson Education, Inc. publishing as Prentice Hall H (Inspect/ Test) 7 Dummy Activity AOA Network for Milwaukee Paper 6 F (Install Controls) E (Build Burner) G (Install Pollution Device) 5 D (Pour Concrete/ Install Frame) 4 C (Construct Stack) B (Modify Roof/Floor) A (Build Internal Components) Figure 3.9

3 - 25© 2011 Pearson Education, Inc. publishing as Prentice Hall Determining the Project Schedule Perform a Critical Path Analysis  The critical path is the longest path through the network  The critical path is the shortest time in which the project can be completed  Any delay in critical path activities delays the whole project  Critical path activities have no slack (float) time

3 - 26© 2011 Pearson Education, Inc. publishing as Prentice Hall Determining the Project Schedule Perform a Critical Path Analysis Table 3.2 ActivityDescriptionTime (weeks) ABuild internal components2 BModify roof and floor3 CConstruct collection stack2 DPour concrete and install frame4 EBuild high-temperature burner4 FInstall pollution control system 3 GInstall air pollution device5 HInspect and test2 Total Time (weeks)25

3 - 27© 2011 Pearson Education, Inc. publishing as Prentice Hall Determining the Project Schedule Perform a Critical Path Analysis Table 3.2 ActivityDescriptionTime (weeks) ABuild internal components2 BModify roof and floor3 CConstruct collection stack2 DPour concrete and install frame4 EBuild high-temperature burner4 FInstall pollution control system 3 GInstall air pollution device5 HInspect and test2 Total Time (weeks)25 Earliest start (ES) =earliest time at which an activity can start, assuming all predecessors have been completed Earliest finish (EF) =earliest time at which an activity can be finished Latest start (LS) =latest time at which an activity can start so as to not delay the completion time of the entire project Latest finish (LF) =latest time by which an activity has to be finished so as to not delay the completion time of the entire project

3 - 28© 2011 Pearson Education, Inc. publishing as Prentice Hall Determining the Project Schedule Perform a Critical Path Analysis Figure 3.10 A Activity Name or Symbol Earliest Start ES Earliest Finish EF Latest Start LS Latest Finish LF Activity Duration 2

3 - 29© 2011 Pearson Education, Inc. publishing as Prentice Hall Forward Pass Begin at starting event and work forward Earliest Start Time Rule:  If an activity has only a single immediate predecessor, its ES equals the EF of the predecessor  If an activity has multiple immediate predecessors, its ES is the maximum of all the EF values of its predecessors ES = Max {EF of all immediate predecessors}

3 - 30© 2011 Pearson Education, Inc. publishing as Prentice Hall Forward Pass Begin at starting event and work forward Earliest Finish Time Rule:  The earliest finish time (EF) of an activity is the sum of its earliest start time (ES) and its activity time EF = ES + Activity time

3 - 31© 2011 Pearson Education, Inc. publishing as Prentice Hall ES/EF Network for Milwaukee Paper Start 0 0 ES 0 EF = ES + Activity time

3 - 32© 2011 Pearson Education, Inc. publishing as Prentice Hall ES/EF Network for Milwaukee Paper Start A2A2 2 EF of A = ES of A ES of A

3 - 33© 2011 Pearson Education, Inc. publishing as Prentice Hall B3B3 ES/EF Network for Milwaukee Paper Start A2A EF of B = ES of B ES of B

3 - 34© 2011 Pearson Education, Inc. publishing as Prentice Hall C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A2 20

3 - 35© 2011 Pearson Education, Inc. publishing as Prentice Hall C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A2 20 D4D4 7 3 = Max (2, 3)

3 - 36© 2011 Pearson Education, Inc. publishing as Prentice Hall D4D4 37 C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A2 20

3 - 37© 2011 Pearson Education, Inc. publishing as Prentice Hall E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 ES/EF Network for Milwaukee Paper B3B3 03 Start A2A2 20 Figure 3.11

3 - 38© 2011 Pearson Education, Inc. publishing as Prentice Hall Backward Pass Begin with the last event and work backwards Latest Finish Time Rule:  If an activity is an immediate predecessor for just a single activity, its LF equals the LS of the activity that immediately follows it  If an activity is an immediate predecessor to more than one activity, its LF is the minimum of all LS values of all activities that immediately follow it LF = Min {LS of all immediate following activities}

3 - 39© 2011 Pearson Education, Inc. publishing as Prentice Hall Backward Pass Begin with the last event and work backwards Latest Start Time Rule:  The latest start time (LS) of an activity is the difference of its latest finish time (LF) and its activity time LS = LF – Activity time

3 - 40© 2011 Pearson Education, Inc. publishing as Prentice Hall LS/LF Times for Milwaukee Paper E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A2 20 LF = EF of Project 1513 LS = LF – Activity time

3 - 41© 2011 Pearson Education, Inc. publishing as Prentice Hall LS/LF Times for Milwaukee Paper E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A2 20 LF = Min(LS of following activity) 1013

3 - 42© 2011 Pearson Education, Inc. publishing as Prentice Hall LS/LF Times for Milwaukee Paper E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A2 20 LF = Min(4, 10) 42

3 - 43© 2011 Pearson Education, Inc. publishing as Prentice Hall LS/LF Times for Milwaukee Paper E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A

3 - 44© 2011 Pearson Education, Inc. publishing as Prentice Hall Computing Slack Time After computing the ES, EF, LS, and LF times for all activities, compute the slack or free time for each activity  Slack is the length of time an activity can be delayed without delaying the entire project Slack = LS – ES or Slack = LF – EF

3 - 45© 2011 Pearson Education, Inc. publishing as Prentice Hall Computing Slack Time Table 3.3 EarliestEarliestLatestLatestOn StartFinishStartFinishSlackCritical ActivityESEFLSLFLS – ESPath A02020Yes B03141No C24240Yes D37481No E48480Yes F No G Yes H Yes

3 - 46© 2011 Pearson Education, Inc. publishing as Prentice Hall Critical Path for Milwaukee Paper E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A

3 - 47© 2011 Pearson Education, Inc. publishing as Prentice Hall

3 - 48© 2011 Pearson Education, Inc. publishing as Prentice Hall ES – EF Gantt Chart for Milwaukee Paper ABuild internal components BModify roof and floor CConstruct collection stack DPour concrete and install frame EBuild high- temperature burner FInstall pollution control system GInstall air pollution device HInspect and test

3 - 49© 2011 Pearson Education, Inc. publishing as Prentice Hall LS – LF Gantt Chart for Milwaukee Paper ABuild internal components BModify roof and floor CConstruct collection stack DPour concrete and install frame EBuild high- temperature burner FInstall pollution control system GInstall air pollution device HInspect and test

3 - 50© 2011 Pearson Education, Inc. publishing as Prentice Hall

3 - 51© 2011 Pearson Education, Inc. publishing as Prentice Hall Trade-Offs and Project Crashing  The project is behind schedule  The completion time has been moved forward It is not uncommon to face the following situations: Shortening the duration of the project is called project crashing

3 - 52© 2011 Pearson Education, Inc. publishing as Prentice Hall Factors to Consider When Crashing a Project  The amount by which an activity is crashed is, in fact, permissible  Taken together, the shortened activity durations will enable us to finish the project by the due date  The total cost of crashing is as small as possible

3 - 53© 2011 Pearson Education, Inc. publishing as Prentice Hall Steps in Project Crashing 1.Compute the crash cost per time period. If crash costs are linear over time: Crash cost per period = (Crash cost – Normal cost) (Normal time – Crash time) 2.Using current activity times, find the critical path and identify the critical activities

3 - 54© 2011 Pearson Education, Inc. publishing as Prentice Hall Steps in Project Crashing 3.For only one critical path, select the activity on this critical path that (a)can still be crashed, (b)has the smallest crash cost per period. 4. For more than one critical path, select one activity from each critical path so that (a) each selected activity can still be crashed, (b) the total crash cost of all selected activities is the smallest.

3 - 55© 2011 Pearson Education, Inc. publishing as Prentice Hall Steps in Project Crashing 4.Update all activity times. If the desired due date has been reached, stop. If not, return to Step 2.

3 - 56© 2011 Pearson Education, Inc. publishing as Prentice Hall Crashing The Project Table 3.5 Time (Wks)Cost ($) Crash CostCritical ActivityNormalCrashNormalCrashPer Wk ($)Path? A2122,00022,750750Yes B3130,00034,0002,000No C2126,00027,0001,000Yes D4248,00049,0001,000No E4256,00058,0001,000Yes F3230,00030,500500No G5280,00084,5001,500Yes H2116,00019,0003,000Yes

3 - 57© 2011 Pearson Education, Inc. publishing as Prentice Hall Crash and Normal Times and Costs for Activity B ||| 123Time (Weeks) $34,000 — $33,000 — $32,000 — $31,000 — $30,000 — — Activity Cost Crash Normal Crash TimeNormal Time Crash Cost Normal Cost Crash Cost/Wk = Crash Cost – Normal Cost Normal Time – Crash Time = $34,000 – $30,000 3 – 1 = = $2,000/Wk $4,000 2 Wks Figure 3.16

3 - 58© 2011 Pearson Education, Inc. publishing as Prentice Hall Critical Path and Slack Times for Milwaukee Paper Figure 3.17 E4E4 F3F3 G5G5 H2H D4D4 37 C2C2 24 B3B3 03 Start A2A Slack = 1 Slack = 0Slack = 6 Slack = 0

3 - 59© 2011 Pearson Education, Inc. publishing as Prentice Hall

3 - 60© 2011 Pearson Education, Inc. publishing as Prentice Hall Ethical Issues 1.Offers of gifts from contractors 2.Pressure to alter status reports to mask delays 3.False reports for charges of time and expenses 4.Pressure to compromise quality to meet schedules  Project managers face many ethical decisions on a daily basis  The Project Management Institute has established an ethical code to deal with problems such as: