BUAD306 Chapter 17 – Project Management

Life is a Project You are already a project manager! Fraternity/sorority projects Sport-related activities Family events Work-related projects

Types of Projects Corporate Mergers, systems conversions, relocations, new business ventures, new products, start—ups… Department Quality improvement, work-flow modifications, new technology/ equipment, automation, new products…

Project Plan The roadmap for your project Designates who does what, when, where Shows sequence of activities and schedule of when they occur Analyzed regularly (daily) to identify issues and gauge timeliness of project Conveying the “why” is critical to the Project manager’s job!

Gantt Charts Visual display of project tasks Specific tasks Timeframe to complete Sequence Assignments of Responsibility Pros/Cons Simple, easy to create Doesn’t show interdependencies

Gantt Chart WK1WK2WK3WK4WK5WK6WK7WK8WK9WK10 Paint Develop Floor Plan Buy Furniture, etc. Hang fixtures Install lighting Arrange Furniture Display Inventory Open Store Gantt Chart

PERT and CPM PERT – Program Evaluation and Review Technique CPM – Critical Path Method Together, Project Managers can do the following: See a graphical display of activities Estimate length of project Identify tasks most critical to completion Determine how long any activity can be delayed without delaying the project

Network Diagram 132 Branch Network consists of branches & nodes Node Predecessor Activity

Network Conventions (AOA) a b c a b c a b c d a b c Dummy activity

Project Network Paint Hang Fixtures Display Inventory/ Goods Develop Floor Plan Buy Furniture Install Lighting Arrange Furniture

Critical Path A path is a sequence of connected activities running from start to end node in network The critical path is the path with the longest duration in the network Project cannot be completed in less than the time of the critical path

Find the Critical Path weeks 3 weeks 2 weeks 9 weeks 5 weeks 2 weeks

Slack Represents time available for getting a path completed as compared to the critical path is the “wiggle room” you have on that path

Example 1 A B C E F D G H ActTime A4 B1 C6 D5 E2 F4 G2 H1

Example 2 A B C E F D GH ActTimeCrash $ A25000 B32000 C1-- D53000 E66000 F38000 G21000 H1-- *Max you can crash any activity is one week *For each week crashed, can earn $2500

Expediting Your Project? Why? Save $ Make $ Improve customer satisfaction Government requirements

Crashing Use of additional resources, which typically cost money, to shorten the original length of the overall project Conditions: Activity crashed must be on the critical path(s) Benefit of crashing must outweigh the cost of crashing

Should We Crash? weeks 3 weeks 2 weeks 9 weeks 5 weeks 2 weeks $500/week; maximum = 3 $500/week; maximum = 1 Can earn $700 for each week opened early

Should We Crash? weeks 3 weeks 2 weeks 9 weeks 5 weeks 2 weeks $500/week; maximum = 3 What if $100/week; maximum = 1 Can earn $700 for each week opened early

Example 2 – Part 2 A B C E F D GH ActTimeCrash $ A25000 B32000 C1-- D53000 E66000 F38000 G21000 H1-- *Max you can crash any activity is one week *For each week crashed, can earn $2500

Example 3 A B C E F D G H ActTimeCrash $ A44000 B32000 C1-- D13000 E42500 F53000 G21000 H4 I3 J1-- *Max you can crash any activity is one week *For each week crashed, can earn $2000 I J

Handout #1: Given the project diagram below and the table of info: 1)Calculate the critical path and slacks 2)If the company wants to shorten the project by 3 weeks and spend no more than $5,000, is it possible? Assume no task can be crashed more than twice. Explain 3)Using original data: if activity D is delayed by 5 weeks, is there a delay in the entire project? If so, by how much? AB C D EF G H ActivTime Crash $ A4$2000 B2-- C11$2000 D9$1500 E1-- F7$2000 G4$500 H1--

Handout #2: Given the project diagram below and the table of info: 1)Calculate the critical path and slacks 2)The company has crash costs as shown (costs are listed for 1 st week crash and 2 nd week. If no cost shown, it cannot be crashed). The company would like to crash the project by 4 weeks. How much will it cost to do this and what tasks will be crashed and by how much? A C B D E F G H ActivTime Crash $ - 1 Crash $ - 2 A2-- B5$500$1000 C3$200-- D2 E4$400$800 F8$1000$2000 G2-- H5$800$1500 I3$600-- J1 IJ

Handout #2: - ALTERNATIVE!!!!!!!!!! Given the project diagram below and the table of info: 1)Calculate the critical path and slacks 2)The company has crash costs as shown (costs are listed for 1 st week crash and 2 nd week. If no cost shown, it cannot be crashed). The company would like to crash the project by 4 weeks. How much will it cost to do this and what tasks will be crashed and by how much? A C B D E F G H ActivTime Crash $ - 1 Crash $ - 2 A2-- B5$500$1000 C3$200-- D2 E4$400$800 F8$1000$2000 G2-- H5$1800$1500 I3$600-- J1 IJ

Handout #3: Given the project diagram below and the table of info: 1)Calculate the critical path and slacks 2)If task D were to slip by 4 weeks, would there be a delay in the project? If so, by how much? 3)Given the original info, the company must complete the project in 20 weeks or else be fined $2000 for each week beyond 20. Is it possible for the company to complete the project and NOT be fined? If so, how would they do so? A C B D E F G H ActivTime Crash $ (max 1) A5$3000 B3$1500 C4 D1-- E3$3200 F6$2000 G3-- H3$800 I1-- I

Microsoft Project Powerful business tool Easily entry and organization of project tasks PERT/CPM flexibility Standard project communications Custom reporting

Risk Management Types of Risks Project Risks – overall project Task Risks – individual components Decision Risks – strategic Cost Benefit Analysis Read Text

Key Project Tasks Project Designation Project Manager Selection Project Team Designation Project Planning Managing Resources/Activities Issues Management Communication Post-Mortem/Analysis

Project Manager Ultimately responsible for success/failure of project Manages: work effort, resources, communications, quality, timetables, and costs Requires strategic management, “juggling” & prioritization skills, etc. Can be certified (PMI)

Project Management Issues Time Considerations Quality Factors Conflicts of Interest Limited Resources Perception within Organization STRESS!