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Project Management
Techniques
♦ Sequencing
activities
♦ Determining
activity times &
costs
♦ Estimating
PERT
♦ Determining
PowerPoint presentation to accompany
3-6
Heizer/Render – Principles of Operations
© 2004 by Prentice Hall, Inc., Upper Saddle
River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Purposes of Project
Scheduling
♦ Shows the relationship of each
activity to others and to the
whole project.
♦ Identifies the precedence
relationships among activities.
♦ Encourages the setting of
realistic time and cost
estimates for each activity.
♦ Helps make better use of
people, money, and material
resources by identifying critical
bottlenecks in 3-7
the project.
PowerPoint presentation to accompany
Heizer/Render – Principles of Operations
© 2004 by Prentice Hall, Inc., Upper Saddle
River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Project Management
Techniques
♦ Gantt chart
♦ Critical Path Method
(CPM)
♦ Program Evaluation &
Review Technique
(PERT)
Time Period
Activity
J F M A M J J
Design
Build
Test
♦ Network techniques
♦ Developed in 1950’s
♦ CPM by DuPont for chemical plants
(1957)
♦ PERT by Booz, Allen & Hamilton
with the U.S. Navy, for Polaris
missile (1958)
♦ Consider precedence
relationships and
interdependencies
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
3-12
♦ Each uses a different estimate
Heizer/Render – Principles of Operations
Management, 5e, and Operations
Management, 7e
River, N.J. 07458
Questions Which May Be
Addressed by PERT & CPM
♦ Is the project on schedule,
ahead of schedule, or behind
schedule?
♦ Is the project over or under cost
budget?
♦ Are there enough resources
available to finish the project
on time?
♦ If the project must be finished
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
3-13
in less than the scheduled
Heizer/Render – Principles of Operations River, N.J. 07458
Management, 5e, and Operations
Management, 7e
The Six Steps Common to
PERT & CPM
♦ Define the project and prepare the
work breakdown structure,
♦ 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
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
3-14
♦ Use the network to help plan,
Heizer/Render – Principles of Operations
Management, 5e, and Operations
River, N.J. 07458
Management, 7e
A Comparison of AON
and AOA Network
Conventions
F
Star H
t
B D G
o w s
r
Ar w
sho nc
c e de
pre e
PowerPoint presentation to accompany
3-17 n s hi
© 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations River, N.J. 07458
l a tio
Management, 5e, and Operations
Management, 7e e
AOA Network (With
Dummy Activities) for
Milwaukee General
C
2 Constru 4
ct stack
coIn F
A
m ter ild
ntsta
Build burner
ne al
s
D
nt
co in Bu
po n
ro ll
umm ls H
1 6 7
E
y Inspect/T
M B Activi o n est
ro o G lut ice i
of dif ty o l v
/ y e
r floo D l lpld
3 5 s ta tro
Pour In on
concrete/ c
Install frame
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations 3-18 River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Critical Path Analysis
♦ Provides activity information
♦ Earliest (ES) & latest (LS) start
♦ Earliest (EF) & latest (LF) finish
♦ Slack (S): Allowable delay
♦ Identifies critical path
♦ Longest path in network
♦ Shortest time project can be
completed
♦ Any delay on critical path
activities delays project
♦ Critical path activities have 0 slack
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations 3-19 River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Earliest Start and
Finish Steps
♦ Begin at starting event and work
forward
♦ ES = 0 for starting activities
♦ ES is earliest start
♦ EF = ES + Activity time
♦ EF is earliest finish
♦ ES = Maximum EF of all
predecessors for non-starting
activities
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations 3-20 River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Latest Start and Finish
Steps
♦ Begin at ending event and work
backward
♦ LF = Maximum EF for ending
activities
♦ LF is latest finish; EF is earliest
finish
♦ LS = LF - Activity time
♦ LS is latest start
♦ LF = Minimum LS of all
successors for3-21
non-ending
PowerPoint presentation to accompany
Heizer/Render – Principles of Operations
Management, 5e, and Operations
© 2004 by Prentice Hall, Inc., Upper Saddle
River, N.J. 07458
Management, 7e
Latest Start and Finish
Steps
e
Nam
ty
Activi
Earliest Earliest
Start ES EF
Finish
Latest LS LF
on
Durati
ty
Activi Latest
Start
Finish
F
Star H
t
B D G
o w s
r
Ar w
sho nc
c e de
pre e
PowerPoint presentation to accompany
3-23 n s hi
© 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations River, N.J. 07458
l a tio
Management, 5e, and Operations
Management, 7e e
AON Network for
Milwaukee General
HospitalIncludes Critical Path
A C FF
0 H2 2 H4 4 H7
0 A2 2 C4 1 13
2 2 3
E 0
Slack Slack 4 H 8 Slack=6 13H 15
0 0 F H
Star =0
H =0 4 8
0 t 0 4 13 15
0 2
B D Slack=0 G
S 0 B3 3 D7 8 G 13 Slack=0
tart H H H
1 4 4 8 8 13
3 4 5
Slack=1 Slack=1 Slack=0
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations 3-24 River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Gantt Chart
Earliest Start and
Finish
Milwaukee General Hospital
1 2 3 4 5 6 7 8 9 10
A Build internal 1112 13 1415 16
components
B Modify roof and
floor
C Construct collection
stack
D Pour concrete and
install frame
E Build high-
temperature burner
F Install pollution
control system
G Install air pollution
PowerPoint presentation to accompany
3-25 © 2004 by Prentice Hall, Inc., Upper Saddle
device
Heizer/Render – Principles of Operations
Management, 5e, and Operations
River, N.J. 07458
Management, 7e
Gantt Chart
Latest Start and Finish
Milwaukee General Hospital
1 2 3 4 5 6 7 8 9 10
A Build internal 1112 13 1415 16
components
B Modify roof and
floor
C Construct collection
stack
D Pour concrete and
install frame
E Build high-
temperature burner
F Install pollution
control system
G Install air pollution
PowerPoint presentation to accompany
3-26 © 2004 by Prentice Hall, Inc., Upper Saddle
device
Heizer/Render – Principles of Operations
Management, 5e, and Operations
River, N.J. 07458
Management, 7e
Gantt Chart
Latest Start and Finish
Build House Project
111
Activity 123456789012
♦ 3 time estimates
♦ Optimistic times (a)
♦ Most-likely time (m)
♦ Pessimistic time (b)
♦ Follow beta distribution
♦ Expected time: t = (a + 4m +
b)/6
♦ Variance of times: v = (b -
a)2/6
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations 3-28 River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Project Times
has an expected
completion time of
40 weeks, with a
standard deviation of
5 weeks. What is the
probability of
finishing the sub in
50 weeks or less?
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations 3-30 River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Converting to
Standardized Variable
X - T 50 - 40
Z= = = 20
.
s 5
Normal Standardized
Distribution Normal Distribution
s= 5 sZ= 1
T= 40 50 X mz= 0 2.0 Z
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations 3-31 River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Obtaining the
Probability
Standardized Normal
Probability Table (Portion)
0.0.50000
.50399
.50798 s Z= 1
: : : :
2.0.97725
.97784
.97831 .9772
2.1.98214
.98257
.98300 mz= 5
0 2.0 Z
Probabilities in body
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations 3-32 River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Variability of
Completion Time for
Noncritical Paths
♦ Variability of times for activities
on noncritical paths must be
considered when finding the
probability of finishing in a
specified time.
♦ Variation in noncritical activity
may cause change in critical
path.
PowerPoint presentation to accompany © 2004 by Prentice Hall, Inc., Upper Saddle
Heizer/Render – Principles of Operations 3-33 River, N.J. 07458
Management, 5e, and Operations
Management, 7e
Factors to Consider
when Crashing
♦
Management, 5e, and Operations
Management, 7e
Crash and Normal
Times and Costs for
Activity B
projects.
Management, 5e, and Operations
Management, 7e
Limitations of
PERT/CPM
♦ Assumes clearly defined,
independent, & stable activities
♦ Specified precedence
relationships
♦ Activity times (PERT) follow
beta distribution
♦ Subjective time estimates
♦ Over-emphasis on critical path