1 Chapter 6 Project Management 1 Chapter 6 PROJECT MANAGEMENT McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

2 Chapter 6 Project Management 2 LEARNING OBJECTIVES Explain the difference between service projects and repetitive service processes. Identify the challenges associated with managing projects. Describe the activities involved in planning projects. Introduce tools that are used to schedule projects. Present the tools used to monitor project progress.

3 Chapter 6 Project Management 3 DEFINITION OF PROJECT MANAGEMENT The planning, scheduling, and controlling of project tasks to meet project objectives, including accomplishing the project’s goal on the defined schedule using the appropriate level of resources.

4 Chapter 6 Project Management 4 MODELS FOR EVALUATING POTENTIAL PROJECTS Cost/Benefit Analysis Net Present Value Payback Period Internal Rate of Return Return on Investment Scoring or Ranking Models Management Science Models Portfolio Management Approach

5 Chapter 6 Project Management 5 Exhibit 6.1 PROJECT SCREENING MATRIX

6 Chapter 6 Project Management 6 PROJECT LIFE CYCLE Defining the Project’s Goals Developing the Detailed Project Plan Scheduling the Project Launching the Implementing the Project Plan Monitoring and Controlling the Project Closing out and Evaluating the Project Six Key Phases

7 Chapter 6 Project Management 7 CRITICAL PROJECT SUCCESS FACTORS 1.Task-Related Variables 2.People-Related Variables 3.Leadership Variables 4.Organizational Variables

8 Chapter 6 Project Management 8 DEVELOPING THE DETAILED PROJECT PLAN 1.Work Breakdown Structure (WBS) 2.Task Responsibility 3.Cost Estimates 4.Uncertainty in Project Estimates 5.Precedence Relationships

9 Chapter 6 Project Management 9 Exhibit 6.2 WORK BREAKDOWN STRUCTURE (GRAPHICAL FORM)

10 Chapter 6 Project Management 10 Exhibit 6.3 WORK BREAKDOWN STRUCTURE (TABLE OR OUTLINE FORM) Project Activity Subactivity Level 1 Subactivity Level 2 Subactivity Level 1 Activity Subactivity Level 1 Subactivity Level 2 Work Package

11 Chapter 6 Project Management 11 Exhibit 6.5 PRECEDENCE TABLE

12 Chapter 6 Project Management 12 Exhibit 6.6 NETWORK DIAGRAM FOR RESTAURANT RENOVATION start end A (1) E (2) B (1) D (4) C (3) F (1) G (1)

13 Chapter 6 Project Management 13 LAUNCHING AND IMPLEMENTING THE PROJECT PLAN 1.Teamwork a.Forming b.Storming c.Norming d.Performing e.Adjourning 2.Task Work

14 Chapter 6 Project Management 14 MONITORING AND CONTROLLING THE PROJECT 1.MONITORING TIME 2.MONITORING COSTS

15 Chapter 6 Project Management 15 Exhibit 6.7 GANTT CHART Time Activities A B C D E 10-5

16 Chapter 6 Project Management 16 KEY TERMS Crash Costs Critical Path Fast-Tracking Gantt Chart Milestones Network Diagram Normal Costs Project Management Project Slack Time Work Breakdown Structure (WBS)