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ms4801 project management

Macro vs. Micro Estimating. Best approach is to do both. Estimating Time and Costs. Macro Approaches1) Ratio methods

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ms4801 project management

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    1. MS4801 Project Management Week #6 Estimating (continued), Risk Analysis & Schedule Control

    3. Estimating Time and Costs Macro Approaches 1) Ratio methods – e.g., 2,700 sq ft @ $100 2) Apportion methods – historical dependency, time/costs apportioned to deliverables (e.g., slide 8) 3) Function point methods – software industry, # inputs, # outputs, # inquiries, # files, # interfaces 4) Learning curves – repeated tasks weighted more heavily when initially completed

    4. See learning curve tables $50 to manufacture ONE flying pig (5 pigs = $250) 60% learning curve 5th = .3054 x $50=$15.27 Cost to manufacture five flying pigs = $50 x 2.71=$135.50

    7. Norwegian Satellite Development Company Cost estimates for World Satellite Telephone Exchange Project NSDC has a contract to produce eight satellites to support a worldwide telephone system ( for Alaska Telecom, Inc.) that allows individuals to use a single, portable telephone in any location on earth to call in and out. NSDC will develop and produced the eight units. NSDC has estimated that the R&D costs will be $12,000. Material costs are expected to be $6,000. They have estimated the design and production of the first satellite will require 1,000 labor hours and an 80% improvement curve is expected. Skilled labor cost is $30 per hour. Desired profit for all projects is 25% of total costs.   A. How many labor hours should the eighth satellite require? B. How many labor hours for the whole project of eight satellites?  C. What should NSCD estimate as the total cost for this project?

    8. Estimating Time and Costs Micro approaches 1) Template method – use when project is similar to past project 2) Parametric procedures applied to specific tasks – like the macro ratio method, but applied to individual tasks 3) Detailed estimates for the WBS – most reliable method (go to example) 4) Phase estimating – begins with macro approach then refines as phases of project completed (go to example)

    9. Refining estimates Some PMs adjust project costs up by 20% because: Interaction costs are hidden “Normal conditions” are a starting point, but seldom reality Things go wrong on projects Changes in project scope and plans occur

    10. Apportion Method

    11. Phase Estimating

    12. WBS Estimate

    13. Risk Assessment Process Step 1: Risk identification Step 2: Risk assessment Step 3: Risk response development Contingency planning Contingency funding Step 4: Risk response control Change control management

    14. Risk Assessment FormMS Office 97 to XP

    15. Risk Severity Matrix

    16. Risk Response Matrix

    17. Step 4: Risk Response Control

    18. Alaska Fly-Fishing Expedition See handout

    19. Schedule Control WEEK 6, Chapter 7

    20. Project Control Process The key to effective project control is to measure actual progress and compare it to planned progress on a timely and regular basis and to take necessary corrective action immediately. Establish a regular reporting period. During each reporting period, collect: data on actual performance information on any changes to project scope, schedule and budget. If changes are incorporated, a new plan must be established.

    22. Effects of Actual Schedule Performance Actual finish times (AFT) of completed activities will determine the earliest start and earliest finish times for the remaining activities.

    24. Incorporating Project Changes into the Schedule Changes might be initiated by the customer or the project team, or they might be the result of an unanticipated occurrence. The degree of impact may depend on when the changes are requested. When the customer requests a change, additional costs might need to be charged.

    25. Updating the Project Schedule An updated project schedule can be calculated based on actual finish times of completed activities

    26. Approaches to Schedule Control Four Steps Analyze the schedule Decide what corrective actions should be taken, if any Revise the plan Recalculate the schedule

    27. Approaches to Schedule Control A change in the estimated duration of any activity will cause a corresponding change in the slack for that path. When a path of activities has negative slack, focus on: Activities that are near term. Activities that have long estimated durations.

    28. Reducing the Estimated Durations Apply more resources. Assign a person with greater expertise to perform or help with the activity. Reduce the scope or requirements for an activity. Totally eliminate some activities. Increase productivity through improved methods or technology.

    29. Approaches to Schedule Control Reducing durations of activities usually results in an increase in costs or a reduction in scope. The key is to effectively address paths with negative or deteriorating slack values as soon as they are identified.

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