D.

Anthony Chevers
 Lecture #8 –
Project Management
 Definition
 Project Schedule
• PERT
• Exercises
 Discussion Questions

Lecture 9 – Project Management | 2

 Project Management
Dr. Tom Johns
 A project is an enterprise undertaken to
achieve planned results within a time frame and at some cost
of resource

 Project management is the business of creating

appropriate behaviors within the organization to fulfill the
objectives of the enterprise in the face of all the risks and
problems encountered on the way.

 Success depends largely on carrying out the constituent

tasks in a sensible sequence and deploying resources to best
advantage, and project managers are appropriately
empowered by the organization to orchestrate the project.

Lecture 9 – Project Management | 3

 Project Schedule
 The process of scheduling forces
determination, first, of the order in
which events must occur, and
second, of the time it will take to do
them all
 Schedules are also a fundamental
basis for control
 Scheduling a process of
communication

Lecture 9 – Project Management | 4

 The Framework of PERT
Program Evaluation Review Technique (PERT) is
a management tool used to manage and control
large and complex projects.

• Define the project and prepare the WBS

• Develop the relationships among the activities. Decide which
activities must precede and which must follow others
• Draw the network connecting all 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

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 Importance: PERT
 When will the entire project be completed?
 What are the critical activities in the project – i.e., the ones that
will delay the entire project if they are late?
 Which are the non-critical activities – the ones that can run late
without delaying the whole project’s completion?
 What are the probabilities that the project will be completed by a
specific date?
 At any particular date, is the project on schedule, behind schedule
or ahead of schedule?
 On a given date, is the money spent equal to, less than or greater
than the budgeted amount?
 Are there enough resources available to finish the project on
time?
 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?
Source: Operations Management, Jay Heizer & Barry Render

Lecture 9 – Project Management | 6

 PERT Notation - AOL
1. An event is an instant time, usually a
starting or ending date. Event
Activity
2. An activity is a task or certain amount
of work required in the project.

PERT – Example #1 Solution:

Given the following information,
develop a PERT Network.
A 2 C End
Activity Immediate Start
Predecessor
1 4
A -
B - B 3 D
C A Assign each event a number
D B

Lecture 9 – Project Management | 7

 PERT – Example #2
Given the following table, develop a network
Beginning Event Ending Event Activity
1 2 1 -› 2
1 3 1 -› 3
2 4 2 -› 4
3 4 3 -› 4
3 5 3 -› 5
4 6 4 -› 6
5 6 5 -› 6

Specify activities by their starting and ending event.

2
1 4
3 6
All that is required to construct
a network is the starting and 5
ending event for each activity.
Lecture 9 – Project Management | 8
 PERT – Example #3
Develop a network based on the following information:
Activity Immediate Predecessor
(s)
A ---
B ---
C A
D B
E C, D
F E
G E
H F
Complete a network below
I G

A C

B D
Lecture 9 – Project Management | 9
 PERT Equations
1. Elapsed time (t) = a+4m + b
6
Where a is optimistic time for activity completion, m is mort likely completion time and b is
pessimistic time for activity completion.

2. EF=ES+t where EF is earliest finish & ES is earliest start

3. LF=LS+t where LF is latest finish & LS is latest start
4. S=LS-ES where S is slack
5. Variance (v) = b-a 2

i.e. The probability of success that the project will be completed within the specified time.

PERT and CPM are two widely used network techniques that have the ability to consider
precedence relationships and interdependency of activities. Their objectives are the
same and the analysis used in both techniques are the same.
The major differences is that PERT employs three times estimates for each activity with
levels of probabilities while CPM makes the assumption that activity times are known
with certainty.

Lecture 9 – Project Management | 10

 PERT & Time Estimates
 For each activity in PERT techniques, we use three time estimates to
calculate an expected completion time & variance for each activity.
 Equations:
• t = (a + 4m + b)/6
• V = [(b – a)/6]2
• Where a is optimistic time for activity completion
• Where b is pessimistic time for activity completion
• Where m is most likely time for activity completion
• Where t is expected time for activity completion
• Where v is variance of activity (the probability of success the project will be
completed within the specified time
Example #5
Activity a m b
1-2 3 4 5
1-3 1 3 5
2-4 5 6 7
3-4 6 7 8 [Solution below]

Activity (a+4m+b) t (b-a)/6 Var

1-2 24 4 2/6 4/36
1-3 18 3 4/6 16/36
2-4 36 6 2/6 4/36
3-4 42 7 2/6 4/36
Lecture 9 – Project Management | 11
 PERT Network
Building a Church
Project to build a Church
[Duration in Weeks]

6
[1]
Secure [3] Men
Start men arrive End
[4] [4]
land nego Buy draw Plan Build erect install
1 2 3 4 plan 5 9 10 11 12
owner $ land apprv found
[2] [3] [5] [16] bldg furni
[3] Deliver [8] [2]
Bill of material
mtls [2]
[2]
7 8
Buy material
[Duration in Weeks]

Describe the Critical Path?

Explain the importance of the Critical Path. Discuss
Lecture 9 – Project Management | 12
 Project Completion Time &
Critical Path
Path # Designation Duration
1 1 -> 2 -> 3 -> 4 -> 5 -> 6 -> 9 -> 10 -> 11 -> 12 27 weeks
2 1 -> 2 -> 3 -> 4 -> 5 -> 9 -> 10 -> 11 -> 12 44 weeks
3 1 -> 2 -> 3 -> 4 -> 7 -> 8 -> 9 -> 10 -> 11 -> 12 30 weeks

Inference: Project Completion Time = 44 weeks

Critical Path = 1->2->3->4->5->9->10->11->12

Lecture 9 – Project Management | 13

 Milwaukee Paper Manufacturing’s
Activities, Predecessors & Times
Activity Description Immediate Time
Predecessors (weeks)
A Build internal components — 2
B Modify roof and floor — 3
C Construct collection stack A 2
D Pour concrete and install frame A, B 4

E Build high-temperature burner C 4

F Install pollution control system C 3

G Install air pollution device D, E 5

H Inspect and test F, G 2
Total time (weeks) 25

Lecture 9 – Project Management | 14

 Exercise
(a) Draw the AON network for Milwaukee Paper
Company
(b) Determine the project completion time
(c) Determine the critical path
(d) Calculate the Earliest start, Latest start, Earliest finish
& Latest finish
(e) Calculate slack for each activity
(f) Calculate variances
(g) What is the probability of completing the project in 1q6
weeks?

Lecture 9 – Project Management | 15

 Notation Used in Nodes for
Forward and Backward Pass
Activity Name or
Symbol

Earliest A Earliest
Start Finish
ES EF

LS LF Latest
Latest Finish
Start 2

Activity Duration

Lecture 9 – Project Management | 16

Earliest Start and Earliest Finish
Times for Milwaukee Paper
[Completion Time = 15 weeks & Critical Path = A – C – E – G – H]

Lecture 9 – Project Management | 17

Lecture 9 – Project Management | 18
 Earliest Start for Activity D
We now come to activity D. Both activities A and B are immediate
predecessors for B. Whereas A has an EF of 2, activity B has an EF
of 3. Using the earliest finish time rule, we compute the ES of activity
D as follows:
ES of D = Max (EF of A, EF of B) = Max (2, 3) = 3

The EF of D equals 7 (= 3 + 4).

Next, both activities E and F have activity C as their only immediate

predecessor.

Therefore, the ES for both E and F equals 4 (= EF of C). The EF of

E is 8 (= 4 + 4), and the EF of F is 7 (= 4 + 3).

Lecture 9 – Project Management | 19

Activity G has both activities D and E as predecessors. Using the
earliest start time rule, its ES is therefore the maximum of EF of D
and EF of E. Hence, the ES of activity G equals 8 (= maximum of 7
and 8), and its EF equals 13 (= 8 + 5)

Finally, we come to activity H. Since it also has two predecessors, F

and G, the ES of H is the maximum EF of these two activities. That
is, the ES of H equals 13 (= maximum of 13 and 7). This implies that
the EF of H is 15 (= 13 + 2). Since H is the last activity in the project,
this also implies that the earliest time in which the entire project can
be completed is 15 weeks (the expected completion time of the
project).

Lecture 9 – Project Management | 20

Computing Latest Start
and Finish Times

Lecture 9 – Project Management | 21

Latest Start and Latest Finish
Times for Milwaukee Paper

Lecture 9 – Project Management | 22

Progression on Measures

A c tiv ity
Lecture 9 – Project Management | 23
Gradual Progression on
Measures

0 224
0 2244810 47
131
A c tiv
48 13
ity13
1
0 337 8 13
Lecture 9 – Project Management | 24
Milwaukee Paper’s Schedule
and Slack Times
(Slack = LS – ES or LF – EF)

Lecture 9 – Project Management | 25

 AON Network for
Milwaukee Paper
F
A C

E
Start H

B D G

Arrows Show
Precedence
Relationships

Lecture 9 – Project Management | 26

Critical Path and Slack Times
for Milwaukee Paper

Lecture 9 – Project Management | 27

 Beta Probability Distribution
with 3 Time Estimates

To compute the dispersion or variance of

activity completion time, we use the
formula; Variance = [(b-a)/6]2

Probability of 1
in 100 of
< a occurring
Probability

Probability of 1
in 100 of > b
occurring

Activity
Optimistic Most Likely Time Pessimistic Time
Time (a) (m) Time (b)

Lecture 9 – Project Management | 28

 Expected Times and
Variances
[Critical Path = A  C  E  G  H = 15 weeks]
[Variance along critical path = 0.11+0.11+1.00+1.78+0.11 = 3.11; Std Dev = √ 3.11 =
1.76

Lecture 9 – Project Management | 29

Probability Distribution for
Project Completion Times
Milwaukee Paper
[Where Standard Deviation = ѵ var (square root of variance)]

Standard deviation = 1.76 weeks

15 Weeks

(Expected Completion Time)

Lecture 9 – Project Management | 30

 Probability that Milwaukee Paper will
meet the 16-Week Deadline
[Probability of Project completed 1 week later than the expected duration?]

Joni Steinberg would like to find the probability that her project will be finished
on or before the 16-week deadline.
To do so, she needs to determine the appropriate area under the normal curve.
The standard normal equation can be applied as follows:
due expected date Where Z is the number of
Z = date – of completion /σ p standard deviations the due
date lies from the mean or
expected date.
= (16 wks – 15 wks)/ 1.76 = 0.57
Time 0.57 Standard deviations
Probability
(T ≤ 16 weeks)
is 71.57%

Time
15 16
Weeks Weeks
Lecture 9 – Project Management | 31
 Z-Value for 99% Probability of Project
Completion at Milwaukee Paper

Joni Steinberg wants to find the due date under which her company’s project
has a 99% chance of completion. She first needs to compute the Z-value
corresponding to 99% shown in Figure 3.17

Probability of 0.99

Probability of 0.01

2.33 Standard Z
deviations
0 2.33

Lecture 9 – Project Management | 32

 Normal Curve Areas
[Z = 0.57; Probability = 0.71566 = 71.57% chance that the project can be
completed in 16 wks or less]

Lecture 9 – Project Management | 33

Normal Curve Areas

Lecture 9 – Project Management | 34

 Discussion Questions
 One of your colleagues comments that software is the
ultimate key to project management success. How
would you respond?

 When a large project is mismanaged, it makes news.

Form a discussion group and identify penalties
associated with a mismanaged project in your
experience or in recent headlines. Identify the cause of
the problem, such as inaccurate time estimates,
changed scope, unplanned or improperly sequenced
activities, inadequate resources or poor management
–labor relations.

 Describe a project in which you participated. What

activities were involved and how were they
interrelated? How would you rate the project manager?
What is the basis of your evaluation?
Lecture 9 – Project Management | 35
Project Management
CASE
The Pert Studebaker

Lecture 9 – Project Management | 36

 NEXT MEETING:
Group Presentations

D. Anthony Chevers

delroy.chevers@uwimona.edu.jm
DOMS, Room #28

37