SDSU MIS 302 CH. 3 Project Management

The Management of Projects involves 3 phases
1. Planning: This phase includes goal setting, defining the project, and team organization
2. Scheduling: this phase relates people, money, and supplies to specific activities and relates activities to each other
3. Controlling: Here the firm monitors resources, costs, quality, and budgets. It also revises or changes plans and shifts resources to met time and cost demands.
The Management of Projects involves 3 phases
Planning, Scheduling, Controlling
Planning
This phase includes goal setting, defining the project, and team organization
Scheduling
this phase relates people, money, and supplies to specific activities and relates activities to each other
Controlling
Here the firm monitors resources, costs, quality, and budgets. It also revises or changes plans and shifts resources to met time and cost demands.
Project Organization
An organization formed to ensure that programs (projects) receive the proper management and attention
Projects can be defined as
a series of related tasks directed toward a major output
The Project organization may be most helpful when:
1. Work tasks can be defined with a specific goal and deadline
2. The job is unique or somewhat unfamiliar to the existing organization
3. The work contains complex interrelated tasks requiring specialized skills
4. The project is temporarily but critical to the organization
5. The project cuts across organizational lines.
Planning the project (before project)
Set the goals (time, cost, performance), define the project, develop work breakdown structure, identify team resources
Scheduling the Project
sequence activities, assign people, schedule deliverables, schedule resources
Controlling the Project (during project)
monitor resources, costs, quality; revise and change plans; shift resources
Project managers are responsible for
1) making sure all necessary activities are finished in proper sequence and on time
2)making sure the project comes in within budget
3)making sure the project meets its quality goals
4)making sure the people assigned to the project receive the motivation, direction, and information needed to do their jobs
Project managers should be good coaches and communicators, and be able to organize activities from a variety of disciplines
Ethical issues Project Managers deal with
1) offers of gifts from contractors
2) pressure to alter status reports to mask the reality of delays
3) false reports for charges of time and expenses
4) pressures to compromise quality to meet bonuses or avoid penalties related to schedules
Work Breakdown Structure (WBS)
a hierarchal description of a project into more and more detailed components
Work breakdown levels
1) project
2) Major tasks in the project
3) Subtasks in major tasks
4) Activities (or “work packages”) to be completed
Gantt Charts
one popular project scheduling approach is this. they are planning charts used to schedule resources and allocate time. they help managers make sure that (1) activities are planned, (2) order of performance is documented, (3) activity time estimates are recorded, and (4) overall project time is developed
Gantt charts do not adequately illustrate the interrelationships between the activities and the resources
yeah
PERT and CPM, the two widely used network techniques, do have the ability to consider precedence relationships and interdependency of activities
yeah
PERT and CPM have and edge over the simpler Gantt charts
yep
Project scheduling serves several purposes
1) it shows the relationship of each activity to others and to the whole project
2) it identifies the precedence relationships among activities
3) it encourages the setting of realistic time and cost estimates for each activity
4) it helps make better use of people, money, and material resources by identifying critical bottlenecks in the project
PERT/CPM programs like HP Project, Microsoft Project, etc produce a broad variety of reports including
1 detailed cost breakdowns
2 total program labor curves
3 cost distribution tables
4 functional cost and hour summaries
5 raw material and expenditure forecasts
6 variance reports
7 time analysis reports
8 work status reports
PERT stands for
Program evaluation and review technique
Program evaluation and technique (PERT)
a project management technique that employs three time estimates for each activity
CPM stands for
Critical Path Method
Critical Path Method (CPM)
A project management technique that uses only one time factor per activity
both PERT and CPM were developed in 1950’s. CPM arrived first, and PERT developed in 1958 for US Navy
yeah
PERT AND CPM both follow 6 BASIC STEPS
1 – define the project and prepare the work breakdown structure
2 – develop the relationships among the activities. decide which activities must precede and which must follow others
3 – draw the network connecting all the activities
4 – assign time and/or cost estimates to each activity
5 – compute the LONGEST time path through the network. this is called the CRITICAL PATH
6 – use the network to help plan, schedule, monitor, and control the project
Critical Path
the computed LONGEST time path(s) through a network. tasks on this path must be completed on time. no slack allowed.
The major difference between PERT and CPM is that PERT employes 3 time estimates for each activity
yeah
PERT AND CPM differ in terminology and in the construction of the network, but their objectives are the SAME
yea pretty much
PERT AND CPM can help answer these questions
1 – when will the entire project be completed?
2 – what are the critical activities or tasks in the project-that is, which activities will delay the entire project if they are late?
3 – Which are the noncritical activities – the ones that can run late without delaying the whole project’s completion
4 – what is the probability that the project will be completed by a specific date?
5 – at any particular date, is the project on schedule, behind schedule, or ahead of schedule?
6 – on any given date, is the money spent equal to, less than, or greater than the budgeted amount?
7 – are there enough resources available to finish the project on time?
8 – if the project is to be finished in a shorter amount of time, what is the best way to accomplish this goal at the least cost?
Activity-on-node (AON)
A network diagram in which nodes designate activities
Activity-on-arrow (AOA)
A network diagram in which arrows designate activities
The basic difference between AON and AOA is that the nodes in an AON diagram represent activities. In an AOA network, the nodes represent the starting and finishing times of an activity and are also called EVENTS. So nodes in AOA consume neither time nor resources.
yea
Critical Path Analysis
a process that helps determine a project schedule
Earliest Start (ES)
earliest time at chichi an activity can start, assuming all predecessor have been completed
Earliest Finish (EF)
earliest time at which any activity can be finished
Latest Start (LS)
latest time at which an activity can start so as to not delay the completion time of the entire project
Latest Finish (LF)
latest time by which an activity has to finish so as to not delay the completion time of the entire project
ES and EF are determined during the forward pass and the LS and LF are determined during the backward pass
yeah
Forward Pass
a process that identifies all the early times
Before any activity can start, ALL its immediate processors must be finished
duh
If an activity has only a single immediate predecessor, its ES equals the EF of the predecessor
yeah
If an activity has multiple immediate predecessors, its ES is the maximum of all EF values of its predecessors. That is: ES = Max (EF of all immediate predecessors)
yeah
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. That is: EF = ES + Activity time
Yep
Backward Pass
An activity that finds all the late start and late finish times
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 follow 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. That is:
LF = Min(LS of all immediate following activities)
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. That is:
LS = LF – Activity time
Slack Time
Free time for an activity. Also referred to as free float or free slack
Slack Equation
LS – ES or LF – EF
The activities with zero slack are called
CRITICAL ACTIVITIES
The critical path is a continuous path through the project network that:
starts at the first activity in the project
terminates at the last activity in the project
includes only critical activities (with no slack time)
When two or more noncritical activities appear successively in a path, they share total slack
yea, true
The 3 time estimates in PERT
Optimistic Time (a)
Pessimistic Time (b)
Most Likely Time (m)
Optimistic Time (a)
time an activity will take if everything goes as planned. In estimating this value, there should be only a small probability (say, 1/100) that the activity will be < a
Pessimistic Time (b)
time an activity will take assuming very unfavorable conditions. In estimating this value, there should also be only a small probability (also 1/100) that the activity time will be > b
Most Likely Time (m)
most realistic estimate of the time required to complete an activity
To find the expected activity time, t, the beta distribution weights the three time estimates as follows:
t = (a + 4m + b)/6
To compute the dispersion or variance of activity completion time, we use the formula
Variance = [ (b – a) / 6 ] squared
PERT makes two assumptions
1) total project completion times follow a normal probability distribution and
2) activity times are strategically independent
Crashing
Shortening activity time in a network to reduce time on the critical path so total completion time is reduced.
We can shorten an activity by adding extra resources (equipment, people) to it. Hence, it is logical for the crash cost of an activity to be higher than its normal cost.
yea, true
When choosing which activities to crash, and by how much, we need to ensure the following:
– The amount by which an activity is crashed is, in fact, permissible
– taken together, the shortened activity durations will enable us to finish the project by the due date
– the total cost of crashing is as small as possible
Crashing a project involves 4 steps
Step 1: compute the crash cost per week (or other time period) for each activity in the network. If crash costs are linear over time, the following formula can be used
crash cost per period = (crash cost – normal cost / normal time – crash time)
Step 2: using the current activity times, find the critical paths in the project network. Identify the critical activities
Step 3: If there is only one critical path, then select the activity on this critical path that (a) can still be crashed and (b) has the smallest crash cost per period. Crash this activity by one period.
If there is one critical path, then select one activity from each critical path such that (a) each selected activity can still be crashed and (b) the total crash cost per period of all selected activities is the smallest. Crash each activity by one period. Note that the same activity may be common to more than one critical path.
Step 4: Update all activities. If the desired due date has been reached, stop. If not, return to step 2.
Advantages of PERT
1. especially useful when scheduling and controlling large projects.
2. straightforward concept and not mathematically complex
3. graphical networks help highlight relationships among project activities
4. critical path and slack time analyses help pinpoint activities that need to be closely watched.
5. project documentation and graphs point out who is responsible for various activities.
6. applicable to a wide variety of projects
7. useful in monitoring not only schedules but costs as well.
Limitations of PERT
1. project activities have to be clearly defined, independent, and stable in their relationships.
2. Precedence relationships must be specified and networked together
3. time estimates tend to be subjective and are subject to fudging by managers who fear the dangers of being overly optimistic or not pessimistic enough
4. there is the inherent danger of placing too much emphasis on the longest, or critical, path. Near-critical paths need to be monitored closely as well.
Perhaps the biggest advantage of using software to manage projects is that it can track the profess of the project.
yep
Project organization
an organization formed to ensure that programs (projects) receive the proper management and attention
(WBS) Work breakdown structure
Defines a project by dividing it into more and more detailed components
Project scheduling serves several purposes:
1) is shows the relationship of each activity to others and to the whole project
2) it identifies the precedence relationships among activities
3) It encourages the setting of realistic time and cost estimates for each activity
4) it helps make better use of people, money, and material resources by identifying critical bottlenecks in the project
Computerized programs produce a broad variety of PERT/CPM reports, including:
1) detailed cost breakdowns for each task, 2) total program labor curves, 3) cost distribution tables, 4) functional cost and hour summaries, 5) raw material and expenditure forecasts, 6) variance reports, 7) time analysis reports, and 8) work status reports
PERT and CPM both follow 6 basic steps
yea, true
The activities on the critical path will delay the entire project if they are not completed on time
yea, true
Activity on node AON
network diagram – nodes designate activities
Activity on arrow AOA
network diagram – arrows designate activities
In an AOA network, the nodes represent the starting and finishing times of an activity and are also called EVENTS
yep
Dummy Activity
an activity having no time that is inserted into a network to maintain the logic of the network
A Dummy ending activity can be added to the end of an AON diagram for a project that has multiple ending activities
yep
Critical Path Analysis
a process that helps determine a project schedule.
To calculate the critical path, we calculate two district starting and ending times for each activity:
Earliest Start (ES) – earliest time at which an activity can start, assuming all predecessors have been completed
Earliest finish (EF) – earliest time at which an activity can be finished
Latest start (LS) – latest time at which an activity can start, without delaying the completion time of the entire project
Latest finish (LF) – latest time by which an activity has to finish so as to not delay the completion time of the entire project
Forward Pass
a process that identifies all the early start and early finish times
ES = Max {EF of all immediate predecessors}
EF = ES + Activity Time
backward pass
a process that identifies all the late start and late finish times
LF = Min {LS of all immediate following activities}
LS = LF – Activity Time
Free time for an activity
Slack Time
LS – ES or LF – EF
Slack Time equation
the activities with zero slack time are called _______ ______ and are said to be on the critical path
critical activities
a continuous path through the project network that starts at the first activity in the project, terminates at the last activity in the project, and includes only critical activities
critical path
(a)
Optimistic Time
Optimistic Time (a)
the “best” activity completion time that could be obtained in a PERT network
Pessimistic time (b)
the “worst” activity time that could be expected in a PERT network
Most likely time (m)
the most probable time to complete an activity in a PERT network
Expected activity time (t)
t = (a +4m +b)/6
Shortening activity time in a network to reduce time on the critical path so total completion time is reduced
crash cost per period = Crash cost – normal cost
——————————-
Normal time – crash time