CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT 18-1 Project Management

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT 18-2 Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame. Build A A Done Build B B Done Build C C Done Build D Ship JANFEBMARAPRMAYJUN On time! Projects

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT 18-3 Project Manager Responsible for: WorkQuality Human ResourcesTime CommunicationsCosts

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT 18-4 Project Life Cycle Concept Feasibility Planning Execution Termination Management

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT 18-5 MARAPRMAYJUNJULAUGSEPOCTNOVDEC Locate new facilities Interview staff Hire and train staff Select and order furniture Remodel and install phones Move in/startup Planning and Scheduling Gantt Chart

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT 18-6 Work Breakdown Structure Project X Level 1 Level 2 Level 3 Level 4 Figure 18-1

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT 18-7 PERT and CPM PERT: Program Evaluation and Review Technique CPM: Critical Path Method Graphically displays project activities Estimates how long the project will take Indicates most critical activities Show where delays will not affect project

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT 18-8 Project Network Locate facilities Order furniture Furniture setup Interview Hire and train Remodel Move in Figure 18-3

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT 18-9 Network Conventions a b ca b c a b c d a b c Dummy activity

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT Example weeks 6 weeks 3 weeks 4 weeks 9 weeks 11 weeks 1 week

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT Example 1 Solution Critical Path

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT Probabilistic Estimates Activity start Optimistic time Most likely time (mode) Pessimistic time opmtete Figure 18-5

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT Example a d e f b h g i c Optimistic time Most likely time Pessimistic time

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT Weeks a-b-c d-e-f g-h-i Example 6

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT Time-Cost Trade-Offs: Crashing Total cost Shorten Cumulative cost of crashing Expected indirect costs Optimum CRASH Figure 18-8

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT a6a 4d4d 5c5c 10 b 9e9e 2f2f Example 7

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT Advantages of PERT Forces managers to organize Provides graphic display of activities Identifies – Critical activities – Slack activities Build A A Done Build B B Done Build C C Done Build D Ship JANFEBMARAPRMAYJUN On time!

CHAPTER EIGHTEEN Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 PROJECT MANAGEMENT Limitations of PERT Important activities may be omitted Precedence relationships may not be correct Estimates may include a fudge factor 142 weeks