6. Project Management

1. 6. Project Management

3. Project • A set of partially ordered, interrelated activities that must be completed to achieve a goal

4. Project Management • Decision-making, choosing between alternatives, managing activities as a part of the project • Planning • goal setting, project definition, team organization • Scheduling • relating people, money, and supplies to specific activities and activities to one and other • Controlling • monitoring resources, costs, and quality; revising plans and shifting resources to meet time and cost demands

5. Role of Project Manager • All necessary activities are finished in order and on time • The project comes in within budget • The project meets quality goals • The people assigned to the project receive motivation, direction, and information

6. Project Scheduling • Identifying precedence relationships • Sequencing activities • Determining activity times & costs • Estimating material and worker requirements • Determining critical activities

7. Scheduling Techniques • Gantt chart • Network models • Critical Path Method (CPM) • Program Evaluation and Review Technique (PERT) • Identify the longest time-consuming path through a network of activities required to complete a project

8. Deplaning Baggage claim Container offload Pumping Engine injection water Container offload Main cabin door Aft cabin door Aft, center, forward Loading First-class section Economy section Container/bulk loading Galley/cabin check Receive passengers Aircraft check Loading Boarding Passengers Baggage Fueling Cargo and mail Galley servicing Lavatory servicing Drinking water Cabin cleaning Cargo and mail Flight services Operating crew Baggage Passengers 0 15 30 45 60 Minutes Gantt Chart: Service for a Delta Jet

9. Key Terms for Network Models • Forward pass • To compute the earliest start (ES) and finish (EF) times for each activity • Backwardpass • To compute the latest start (LS) and finish (LF) times for each activity without delaying the completion of the entire project • Slack • The length of time an activity can be delayed without delaying the entire project • LS-ES or LF-EF

10. Activity Name or Symbol A Earliest Finish Earliest Start ES EF LS LF Latest Finish Latest Start 2 Activity Duration Key Terms for Network Models

11. Key Terms for Network Models • Critical path • Zero slack for every activity on the path • The longest path through the network • The shortest time in which the project can be completed • Any delay in critical path activities delays the project • There may be several critical paths

12. A A C C B B B A D A C C B D A C B B D A C Network Examples

13. CPM and PERT Procedures • Develop relationships among the activities - decide which activities must precede and which must follow others • Draw the network connecting all of the activities • Assign time and/or cost estimates to each activity • Compute the longest time path through the network – this is called the critical path • Use the network to help plan, schedule, monitor, and control the project

14. CPM Example

15. F A C E Start H B G D Continued

16. 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 Continued

17. PERT • PERT uses a probability distribution for activity times to allow for variability while CPM assumes fixed time estimate • PERT uses two or three time estimates for each activity • a: optimistic time, b: pessimistic time, m: most likely time • Uniform distribution approximation expected time =(a+b)/2, variance = (b–a)2/12 • Beta distribution approximation t = (a+4m+b)/6, v = (b–a)2/36

18. Activity a m b t v A 1 2 3 2 .11 B 2 3 4 3 .11 C 1 2 3 2 .11 D 2 4 6 4 .44 E 1 4 7 4 1.00 F 1 2 9 3 1.78 G 3 4 11 5 1.78 H 1 2 3 2 .11 PERT Example

19. Probability of Project Completion • Project variance is computed by summing variances of critical activities • σ2 = .11+.11+1.00+1.78+.11 = 3.11 • Total project completion times follow a normal probability distribution • Probability to finish the project within 16 weeks? Pr(T<16) = Pr(Z<(16-15)/1.76)) = Pr(Z<0.57) = 0.716

20. (Dis)Advantages of CPM/PERT • Especially useful for large projects • Straightforward concept and not mathematically complex • Graphical networks help to perceive relationships among project activities • Critical path pinpoints activities that need to be closely watched • Time estimates tend to be subjective • Too much emphasis on the critical path

21. Project Crashing • Shortening the duration of the project • Steps: • Compute the crash cost per time period • Identify the critical path and activities • Select an activity on the critical path that can be crashed with the smallest crash cost • Repeat until the desired due date is reached

22. Time (Wks) Cost ($) Crash Cost Critical Activity Normal Crash Normal Crash Per Wk ($) Path? A 2 1 22,000 22,750 750 Yes B 3 1 30,000 34,000 2,000 No C 2 1 26,000 27,000 1,000 Yes D 4 2 48,000 49,000 1,000 No E 4 2 56,000 58,000 1,000 Yes F 3 2 30,000 30,500 500 No G 5 2 80,000 84,500 1,500 Yes H 2 1 16,000 19,000 3,000 Yes An Example

23. Video Case Study • Develop the network for planning and construction of the new hospital at Arnold Palmer. • What is the critical path and how long is the project expected to take? • Why is the construction of this 11-story building any more complex than construction of an equivalent office building? • What percent of the whole project duration was spent in planning that occurred prior to the proposal and reviews? Prior to the actual building construction? Why?