1. Lecture 4
Project Management
Chapter 17

2. Project Management How is it different? Why is it used?
Limited time frame
Narrow focus, specific objectives
Why is it used?
Special needs
Pressures for new or improves products or services

3. Project Management What are the Key Metrics
Time
Cost
Performance objectives
What are the Key Success Factors?
Top-down commitment
Having a capable project manager
Having time to plan
Careful tracking and control
Good communications

4. Project Management What are the tools? Work breakdown structure
Network diagram
Gantt charts
Risk management

5. Planning and Scheduling
Gantt Chart
Locate new facilities
Interview staff
Hire and train staff
Select and order furniture
Remodel and install phones
Move in/startup
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC

6. Key Decisions Deciding which projects to implement
Selecting a project manager
Selecting a project team
Planning and designing the project
Managing and controlling project resources
Deciding if and when a project should be terminated

7. Project Manager Responsible for: Work Quality Human Resources Time
Communications Costs

8. Ethical Issues Temptation to understate costs Withhold information
Misleading status reports
Falsifying records
Compromising workers’ safety
Approving substandard work

9. Project Life Cycle Concept Feasibility Planning Execution Termination
Management

10. Work Breakdown Structure

11. 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

12. The Network Diagram Network (precedence) diagram
Activity-on-arrow (AOA)
Activity-on-node (AON)
Activities
consume resources and/or time
Events
points in time

13. Project Network – Activity on Node
Figure 17.4 1 2 3 5 6
Locate facilities
Order furniture
Furniture setup
Interview
Remodel
Move in 4
Hire and train 7 S
AON

14. The Network Diagram (cont’d)
Path
Sequence of activities that leads from the starting node to the finishing node
AON path: S
Critical path
The longest path; determines expected project duration
Critical activities
Activities on the critical path
Slack
Allowable slippage for path; the difference the length of path and the length of critical path

15. Time Estimates Deterministic Probabilistic
Time estimates that are fairly certain
Probabilistic
Estimates of times that allow for variation

16. Project Network – Activity on Node
Figure 17.4
6 weeks 1 2 3 5 6
Locate facilities
Order furniture
Furniture setup
Interview
Remodel
Move in 4
Hire and train 7 S
3 weeks
8 weeks
AON
11 weeks
1 week
9 weeks
4 weeks

17. Management Scientist Solution
Critical Path

18. Example 1: Activity on Arc (AOA) Representation
Figure 17.5
6 weeks
Deterministic
time estimates 4
Order furniture
3 weeks 2
8 weeks
Furniture setup
Locate facilities
Remodel
Move in
11 weeks 1 5 6
1 week
Interview
Hire and train
4 weeks
9 weeks 3

19. Computing Algorithm Network activities Used to determine
ES: early start
EF: early finish
LS: late start
LF: late finish
Used to determine
Expected project duration
Slack time
Critical path

20. Advantages of PERT Forces managers to organize
Provides graphic display of activities
Identifies
Critical activities
Slack activities 1 2 3 4 5 6

21. Limitations of PERT Important activities may be omitted
Precedence relationships may not be correct
Estimates may include a fudge factor
May focus solely on critical path