PROJECT MANAGEMENT

MS EM-03
LECTURE 09
Resource Person

ENGR. JUNAID ARSHAD

LECTURER

DEPARTMENT OF ENGINEERING MANAGEMENT COLLEGE OF E & ME, NUST

Topics Covered
Program

Evaluation and Review Technique (Pert) Crashing Problems

Project
Sample

Program Evaluation and Review Technique

Pert calculates the expected durations for all activities and then does an ordinary CPM calculation of the network using these expected values as durations. The expected value and variance can be calculated as:

TE=(a + b + 4m)/6
Var=V= 1/36 (b - a)
2

(already discussed)

The variance is a measure of uncertainty of the duration. The larger variance, the larger is the uncertainty.

Program Evaluation and Review Technique

Standard deviation = =(V)
1/2

Probability
Pr = (D T) /
D= deadline / desired completion time T= project completion time = normal distribution (from table)

Problem 09
(Use Pert Technique on P-04)
Activity Preceding Activity A B C D A E B F B G C H D, E I F, G Duration (weeks) 10 07 12 18 14 13 16 12 06

Problem 09 (Pert Solution)

Activity A m 10 a 9 b 17

B
C D E F

7
12 18 14 13

5
10 16 13 10

9
20 32 21 16

G
H I

16
12 6

15
11 5

23
19 7

Problem 09 (Pert Solution)

Activity A m 10 a 9 b 17 TE 11

B
C D E F

7
12 18 14 13

5
10 16 13 10

9
20 32 21 16

7
13 20 15 13

G
H I

16
12 6

15
11 5

23
19 7

17
13 6

Problem 09 (Pert Solution)

Activity A m 10 a 9 b 17 TE 11 Var 1.78

B
C D E F

7
12 18 14 13

5
10 16 13 10

9
20 32 21 16

7
13 20 15 13

.44
2.78 7.11 1.78 1

G
H I

16
12 6

15
11 5

23
19 7

17
13 6

1.78
1.78 .11

Problem 09 (Pert Solution)

The network is calculated using the expected values (TE). The critical path is A-D-H. Project completion time T= Ta+Td+Th

= 11+20+13 = 44
Variance V= Va + Vd + Vh = 1.78+7.11+1.78= 10.67

Problem 09 (Pert Solution)

The variance as such does not provide much practically useful information about uncertainty. It is used to calculate probability, which can then be used as a decision parameter. For example, project manager would like to know what is the probability of reaching the 40-days deadline calculated by CPM method.

Problem 09 (Pert Solution)

Standard deviation= = (V) = (10.67) = 3.266
1/2 1/2

Probability
Pr = (D T) / D= deadline / desired completion time=40 T= project completion time=44 Pr = (40 44) / 3.266 = (-1.23) = 0.11
The chance of meeting the deadline is 11 percent only.

Problem 09 (Pert Solution)

What deadline project manager should give if he/she wants 90 percent probability of finishing on or before the deadline? If this deadline is D, using the formula

0.90 = (D 44) / 3.266

(1.28)= (D 44) / 3.266
R

D= 48.2

E S U L

In order to have 90 percent guarantee against a delay, the deadline should be 49 days.

Comments on Pert
Program evaluation and review technique (PERT) allows activity duration with uncertainty. It assumes that there is no underlying connection leading to simultaneous duration variation of two or more activities. If activity X is delayed, this does not lead to a similar delay of activity Y. This is, of course, a questionable assumption. Quite often there are activities that are connected.

For example, a delay of an activity may be caused by a shortage of labor. In this case it is reasonable to believe that this is the case for other activities performed in the same region.

Project Crashing

Crashing means reducing project time (total project completion time)

Crashing is achieved by reducing the activity (s) times in a network.

Activity time can be reduced by utilizing additional resources i-e additional labor, more equipment and so on.

Project Crashing

Although shortening or crashing activity times can be expensive; doing so might be worthwhile. This is also referred as cost-time trade-offs.

Project Crashing The objective of crashing is to reduce the

entire project completion time by a certain amount at the least cost.

Crash time: amount of time an activity is reduced Crash cost: cost of reducing activity time

Project Crashing
Rules:

Crash the activities on the critical path. As a result of crashing, a parallel non-critical path may become new critical path.
Start crashing with least cost of crashing per unit time, crash the most costly activity if required, last of all.

Project Crashing
2

3
1

4
6
4

2
3

3 Reduce it to 06 days

Total Project Time 07 days

Project Crashing
Act- Normal Normal Crash Crash Cost ivity Time Cost Time Cost Time (days) ($) (days) ($) crash cost per unit time 1-2 3 40 1 80 (80-40)/(3-1) =20 1-3 2 50 1 120 1-4 2-4 3-4 6 4 3 100 80 60 4 2 1 140 130 (130-80)/(4-2) =25 140

Project Crashing
Activity 1-2 and Activity 2-4; both are on critical path. The project completion time can be reduced to six days by crashing either 1-2 or 2-4 by one day. It costs $20 per day to crash activity 1-2 and $25 per day to crash activity 2-4. Therefore it is less costly to crash activity 1-2 by one day in order to achieve an over all project completion time of six days.

Problem 10
The data of activities, activity precedence, activity normal and crash times and costs for a pipe line renewal is given in the table on next slides. a) Develop a network for the project.

b) Determine the project completion time with normal time of activities. c) Crash the project to reduce the project completion time with least incremental cost.
Note: Time is given in days and cost in rupees.

Remaining Problem 10
Activity Prece- Normal Normal Crash Crash dence time cost time cost A 3 1 B 4 4 C A 2 900 1 1000 D C 1 300 1 300 E D 5 2500 3 3000 F D 9 900 5 1200 G E 5 3500 2 5000 H B, D 1 300 1 300 I B, D 2 900 1 1200 Go on next slide for remaining data of Problem 10

Remaining Problem 10
Activity Prece- Normal Normal dence time cost j H, I 4 1200 K G, J 6 4200 L K 2 800 M F, H, I 2 500 N L, M 2 500 O N 2 400 P L, M 4 1200 Q N, P 2 400 R O, Q 2 400 Crash time 2 3 1 1 1 1 2 1 1 Crash cost 2000 5400 1000 800 800 600 1600 600 500

Discussion/ Questions and Answers