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Chapter 17: Learning Objectives

Chapter 17: Learning Objectives. You should be able to: Discuss the behavioral aspects of projects in terms of project personnel and the project manager Explain the nature and importance of a work breakdown structure in project management Give a general description of PERT/CPM techniques

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Chapter 17: Learning Objectives

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  1. Chapter 17: Learning Objectives • You should be able to: • Discuss the behavioral aspects of projects in terms of project personnel and the project manager • Explain the nature and importance of a work breakdown structure in project management • Give a general description of PERT/CPM techniques • Construct simple network diagrams • List the kinds of information that a PERT or CPM analysis can provide • Analyze networks with deterministic times • Analyze networks with probabilistic times • Describe activity ‘crashing’ and solve typical problems 17-1

  2. Projects • Projects • Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame • Examples: • The Olympic Games • Producing a movie • Software development • Product development • ERP implementation 17-2

  3. Project Life Cycle 17-3

  4. Work Breakdown Structure (WBS) • WBS • A hierarchical listing of what must be done during a project • Establishes a logical framework for identifying the required activities for the project • Identify the major elements of the project • Identify the major supporting activities for each of the major elements • Break down each major supporting activity into a list of the activities that will be needed to accomplish it 17-4

  5. WBS 17-5

  6. Gantt Chart 17-6

  7. PERT and CPM • PERT (program evaluation and review technique) and CPM (critical path method) are two techniques used to manage large-scale projects • By using PERT or CPM Managers can obtain: • A graphical display of project activities • An estimate of how long the project will take • An indication of which activities are most critical to timely project completion • An indication of how long any activity can be delayed without delaying the project 17-7

  8. Network Diagram • Network diagram • Diagram of project activities that shows sequential relationships by use of arrows and nodes • Activity on arrow (AOA) • Network diagram convention in which arrows designate activities • Activity on node (AON) • Network convention in which nodes designate activities • Activities • Project steps that consume resources and/or time • Events • The starting and finishing of activities 17-8

  9. AON Convention Activity on Activity Meaning Node (AON) A C (a) B A comes before B, which comes before C. A A and B must both be completed before C can start. (b) C B B B and C cannot begin until A is completed. A (c) C 17-9

  10. A C B D A C B D AON Convention Activity on Activity Meaning Node (AON) C and D cannot begin until both A and B are completed. (d) C cannot begin until both A and B are completed; D cannot begin until B is completed. A dummy activity is introduced in AOA. (e) 17-10

  11. B A C D AON Convention Activity on Activity Meaning Node (AON) B and C cannot begin until A is completed. D cannot begin until both B and C are completed. A dummy activity is again introduced in AOA. (f) 17-11

  12. AON Example Project Activities and Predecessors 17-12

  13. Activity A (Build Internal Components) A Start Activity B (Modify Roof and Floor) B Start Activity AON Network 17-13

  14. Activity A Precedes Activity C A C Start B D Activities A and B Precede Activity D AON Network 17-14

  15. F A C E Start H B G D Arrows Show Precedence Relationships AON Network 17-15

  16. Deterministic Time Estimates • Deterministic • Time estimates that are fairly certain • Probabilistic • Time estimates that allow for variation 17-16

  17. Activity Description Time (weeks) A Build internal components 2 B Modify roof and floor 3 C Construct collection stack 2 D Pour concrete and install frame 4 E Build high-temperature burner 4 F Install pollution control system 3 G Install air pollution device 5 H Inspect and test 2 Total Time (weeks) 25 Determining Project Duration 17-17

  18. Determining the Project Duration Critical Path Critical path = Longest path A-C-E-G-H Project duration = 15 weeks 17-18

  19. Early Start, Early Finish • Finding ES and EF involves a forward pass through the network diagram • Early start (ES) • The earliest time an activity can start • Assumes all preceding activities start as early as possible • For nodes with one entering arrow • ES = EF of the entering arrow • For activities leaving nodes with multiple entering arrows • ES = the largest of the largest entering EF • Early finish (EF) • The earliest time an activity can finish • EF = ES + t 17-19

  20. Late Start, Late Finish • Finding LS and LF involves a backward pass through the network diagram • Late Start (LS) • The latest time the activity can start and not delay the project • The latest starting time for each activity is equal to its latest finishing time minus its expected duration: • LS = LF - t • Late Finish (LF) • The latest time the activity can finish and not delay the project • For nodes with one leaving arrow, LF for nodes entering that node equals the LS of the leaving arrow • For nodes with multiple leaving arrows, LF for arrows entering node equals the smallest of the leaving arrows 17-20

  21. Slack and the Critical Path • Slack can be computed one of two ways: • Slack = LS – ES • Slack = LF – EF • Critical path • The critical path is indicated by the activities with zero slack 17-21

  22. Activity Name or Symbol A Earliest Finish Earliest Start ES EF LS LF Latest Finish Latest Start 2 Activity Duration Determining the Project Schedule Perform a Critical Path Analysis 17-22

  23. Forward Pass Begin at starting event and work forward Earliest Start Time Rule: • If an activity has only a single immediate predecessor, its ES equals the EF of the predecessor • If an activity has multiple immediate predecessors, its ES is the maximum of all the EF values of its predecessors ES = Max {EF of all immediate predecessors} 17-23

  24. Forward Pass Begin at starting event and work forward Earliest Finish Time Rule: • The earliest finish time (EF) of an activity is the sum of its earliest start time (ES) and its activity time EF = ES + Activity time 17-24

  25. ES EF = ES + Activity time Start 0 0 0 Forward Pass 17-25

  26. EF of A = ES of A + 2 ESof A A 2 0 2 Start 0 0 0 Forward Pass 17-26

  27. EF of B = ES of B + 3 A 2 ESof B 0 2 0 3 Start 0 0 B 3 0 Forward Pass 17-27

  28. A 2 C 2 0 2 2 4 Start 0 0 0 B 3 0 3 Forward Pass 17-28

  29. A 2 C 2 0 2 2 4 Start 0 0 = Max (2, 3) D 4 0 3 B 3 0 3 Forward Pass 7 17-29

  30. A 2 C 2 0 2 2 4 Start 0 0 0 B 3 D 4 0 3 3 7 Forward Pass 17-30

  31. A 2 C 2 F 3 0 2 4 7 2 4 E 4 H 2 Start 0 0 4 8 13 15 0 B 3 D 4 G 5 0 3 3 7 8 13 Forward Pass 17-31

  32. Backward Pass Begin with the last event and work backwards Latest Finish Time Rule: • If an activity is an immediate predecessor for just a single activity, its LF equals the LS of the activity that immediately follows it • If an activity is an immediate predecessor to more than one activity, its LF is the minimum of all LS values of all activities that immediately follow it LF = Min {LS of all immediate following activities} 17-32

  33. Backward Pass Begin with the last event and work backwards Latest Start Time Rule: • The latest start time (LS) of an activity is the difference of its latest finish time (LF) and its activity time LS = LF – Activity time 17-33

  34. A 2 C 2 F 3 0 2 4 7 2 4 E 4 H 2 Start 0 0 4 8 13 15 13 15 0 LS = LF – Activity time B 3 D 4 G 5 0 3 3 7 8 13 LF = EF of Project Backward Pass 17-34

  35. A 2 C 2 F 3 0 2 4 7 2 4 10 13 E 4 H 2 Start 0 0 LF = Min(LS of following activity) 4 8 13 15 13 15 0 B 3 D 4 G 5 0 3 3 7 8 13 Backward Pass 17-35

  36. LF = Min(4, 10) A 2 C 2 F 3 0 2 4 7 2 4 2 4 10 13 E 4 H 2 Start 0 0 4 8 13 15 13 15 4 8 0 B 3 D 4 G 5 0 3 3 7 8 13 8 13 Backward Pass 17-36

  37. A 2 C 2 F 3 0 2 4 7 2 4 2 4 10 13 0 2 E 4 H 2 Start 0 0 4 8 13 15 13 15 0 0 4 8 0 B 3 D 4 G 5 0 3 3 7 8 13 4 8 8 13 1 4 Backward Pass 17-37

  38. Computing Slack Time After computing the ES, EF, LS, and LF times for all activities, compute the slack or free time for each activity • Slack is the length of time an activity can be delayed without delaying the entire project Slack = LS – ES or Slack = LF – EF 17-38

  39. Earliest Earliest Latest Latest On Start Finish Start Finish Slack Critical Activity ES EF LS LF LS – ES Path A 0 2 0 2 0 Yes B 0 3 1 4 1 No C 2 4 2 4 0 Yes D 3 7 4 8 1 No E 4 8 4 8 0 Yes F 4 7 10 13 6 No G 8 13 8 13 0 Yes H 13 15 13 15 0 Yes Computing Slack Time 17-39

  40. Using Slack Times • Knowledge of slack times provides managers with information for planning allocation of scarce resources • Control efforts will be directed toward those activities that might be most susceptible to delaying the project • Activity slack times are based on the assumption that all of the activities on the same path will be started as early as possible and not exceed their expected time • If two activities are on the same path and have the same slack, this will be the total slack available to both 17-40

  41. Probabilistic Time Estimates • The beta distribution is generally used to describe the inherent variability in time estimates • The probabilistic approach involves three time estimates: • Optimistic time, (to) • The length of time required under optimal conditions • Pessimistic time, (tp) • The length of time required under the worst conditions • Most likely time, (tm) • The most probable length of time required 17-41

  42. Probabilistic Time Estimates The expected time, te ,for an activity is a weighted average of the three time estimates: The expected duration of a path is equal to the sum of the expected times of the activities on that path: 17-42

  43. Determining Path Probabilities 17-43

  44. Project Completion Time • A project is not complete until all project activities are complete • It is risky to only consider the critical path when assessing the probability of completing a project within a specified time. • To determine the probability of completing the project within a particular time frame • Calculate the probability that each path in the project will be completed within the specified time • Multiply these probabilities • The result is the probability that the project will be completed within the specified time 17-44

  45. Probabilistic Time Estimates • The standard deviation of each activity’s time is estimated as one-sixth of the difference between the pessimistic and optimistic time estimates. The variance is the square of the standard deviation: • Standard deviation of the expected time for the path 17-45

  46. Most Expected Optimistic Likely Pessimistic Time Variance Activity totmtpt = (to+ 4tm+ tp)/6 [(tp– to)/6]2 A 1 2 3 2 4/36 B 2 3 4 3 4/36 C 1 2 3 2 4/36 D 2 4 6 4 16/36 E 1 4 7 4 36/36 F 1 2 9 3 64/36 G 3 4 11 5 64/36 H 1 2 3 2 4/36 Computing Variance 17-46

  47. Knowledge of Path Statistics • Knowledge of expected path times and their standard deviations enables managers to compute probabilistic estimates about project completion such as: • The probability that the project will be completed by a certain time • The probability that the project will take longer than its expected completion time 17-47

  48. s2 = Project variance = (variances of activities on the path) p Computing Variance Path variance is computed by summing the variances of activities on the path 17-48

  49. Variance of critical path s2 = 4/36 + 4/36 + 36/36 + 64/36 + 4/36 = 112/36 = 3.1111 Standard deviation of critical path sp = Variance of critical path = 3.1111 = 1.7638 weeks p Computing Variance 17-49

  50. Probability of Project Completion Note: • Total project completion times follow a normal probability distribution • Activity times are statistically independent 17-50

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