Project Planning

BA 339

Project Planning and Control

Definition of Project Management

Work Breakdown Structure
Critical Path Scheduling
Ideal Completion Time

Time vs. Cost tradeoffs

Project Management

Project

series of related jobs usually directed toward

some major output and requiring a significant
period of time to perform.

Project Management

planning, directing, and controlling resources

(people, equipment, material) to meet the
technical, cost, and time constraints of the
project.
Project or Program?
3

Project Management

Personal Life

Work-related

Ways to manage project

complexity

Limit changes once

project begins
Goal orientation
(completion date
focus)
Attempt to reduce
uncertainty
Expediters
Constantly update
information
5

Work Breakdown Structure

Level
1
2

Program
Project 1

Project 2

Task 1.1

Task 1.2

Subtask 1.1.1

Work Package 1.1.1.1

Subtask 1.1.2
Work Package 1.1.1.2
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Work Breakdown Structure

Allow the elements to be worked on

independently

Make them manageable in size

Give authority to carry out the program

Monitor and measure the program

Provide the required resources

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Project Control: Gantt

Chart
New I-5 Bridge Design

Month

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Pilot Study development

Pilot Study distribution
Pilot Study analysis
Time & Process analysis
Preliminary Report
Survey design & pretest
Survey translation & copy
Survey distribution
Market Model Report
Collect cost & price data
Simulation development
Simulation analysis
Final Report

Critical Path Scheduling

A project must have:

well-defined jobs or
tasks whose
completion marks the
end of the project;
independent jobs or
tasks;
and tasks that follow a
given sequence.

CPM with Single Time Estimate

Consider the following HR consulting project:
Activity
Assess customer's needs
Write and submit proposal
Obtain approval
Develop service vision and goals
Train employees
Quality improvement pilot groups
Write assessment report

Designation
A
B
C
D
E
F
G

Immed. Pred.
None
A
B
C
C
D, E
F

Time (Weeks)
2
1
1
2
5
5
1

Develop a critical path diagram and determine the

duration of the critical path and slack times for all
activities
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First draw the network

D, 2

A, 2

B, 1

C, 1

F, 5

G, 1

E, 5

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Moving forward on the diagram (left to right):

Determine early start and early finish times

ES=4
EF=6
ES=0
EF=2

ES=2
EF=3

ES=3
EF=4

A, 2

B, 1

C, 1

D, 2

ES=4
EF=9

?
F, 5

G, 1

E, 5

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When F can start depends on when

predecessors (D & E) finish
ES=4
EF=6
ES=0
EF=2

ES=2
EF=3

ES=3
EF=4

A, 2

B, 1

C, 1

D, 2

ES=4
EF=9

ES=9
EF=14

ES=14
EF=15

F, 5

G, 1

E, 5

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Moving backwards on the diagram (right to left):

Determine late starts and late finish times

ES=4
EF=6
ES=0
EF=2

ES=2
EF=3

ES=3
EF=4

A, 2

B, 1

C, 1

D, 2

LS=7
LF=9
ES=4
EF=9

E, 5

ES=9
EF=14

ES=14
EF=15

F, 5

G, 1

LS=9
LF=14

LS=14
LF=15

LS=4
LF=9
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Dont delay the project

ES=4
EF=6
ES=0
EF=2

ES=2
EF=3

ES=3
EF=4

A, 2

B, 1

C, 1

LS=0
LF=2

LS=2
LF=3

LS=3
LF=4

D, 2

LS=7
LF=9
ES=4
EF=9

E, 5

ES=9
EF=14

ES=14
EF=15

F, 5

G, 1

LS=9
LF=14

LS=14
LF=15

LS=4
LF=9
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Critical Path & Slack

slack = amount of flexibility = LS-ES or LF-EF

Critical path= completion time of the project (project bottleneck). Connect all
points on path which have no slack

ES=4
EF=6

ES=0
EF=2

ES=2
EF=3

ES=3
EF=4

A, 2

B, 1

C, 1

LS=0
LF=2

LS=2
LF=3

LS=3
LF=4

D, 2

LS=7
LF=9
ES=4
EF=9

E, 5
LS=4
LF=9

Slack=(7-4)=(9-6)= 3 Wks

ES=9
EF=14

ES=14
EF=15

F, 5

G, 1

LS=9
LF=14

LS=14
LF=15

Duration = 15 weeks
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Time-Cost Models

Basic Assumption: Relationship

between activity completion time and
project cost

Time Cost Models: Determine the

optimum point in time-cost tradeoffs

Activity direct costs

Project indirect costs
Activity completion times
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Time-cost Trade-off
Crashing a project

Prepare a CPM-type network diagram

Determine the cost per unit of time (usually
assume days) to expedite each activity.
NT=normal time
CT= crash time
NC=normal cost
CC=crash cost
cost to crash each day = (CC-NC)/(NT-CT)
Compute critical path
Shorten the critical path at the least cost
Determine the minimum cost schedule.
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Activity
A
B
C
D

Cost per day to Expedite

$4
$3
$2
$2

Number of possible Days activity may be shortened

1
3
1
2

B, 5

A, 2

D, 3

C, 4

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Crashing
Current
Remaining
Critical Path days activity
may be
shortened

Cost per Day Least cost

to Expedite
activity to
each Activity expedite

ABD

All

ABD

A-1, B-3,
D-2
A-1, B-3,
D-1
A-1, B-3

A-4, B-3,
D-2
A-4, B-3,
D-2
A-4, B-3

ABCD

A-1, B-2,
C-1
B-2, C-1

ABCD

B-1

ABD
ABD
ABCD

Total Cost of Project

all Activities Completion
in network
time

$26

10

$28

$30

$33

A-4, B-3,
C-2
B-3, C-2

$37

B&C

$42

B-3

$45

5
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In Class Exercise: Bike Path

Project

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Bike Path Project:

Activity

Description

Predecessor

Estimated time

A
B
C
D

Survey for paths

None
None
None
A,B,C

2 weeks
1 weeks
4 weeks
15 weeks

5 weeks

3 weeks

E,F
G
G

2 weeks
3 weeks
2 weeks

E
F
G
H
I

Re-route traffic
Move utilities
Prepare new path
bed
Dig and prepare
drainage
Set forms and
reinforcements
Pour concrete
Build curbs
Pave surface

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Cost Trade-offs

The contractor will get a $100,000 bonus for

completing the project within 25 weeks. Some of
the activities can be shortened, but will cost
more:

Activity D: $10,000 per week for up to 3 weeks

Activity E: $8,000 per week for up to 1 week
Activity H: $6,000 per week for up to 1 week
Activity I: $8,000 per week for up to 1 week

What should he/she do?

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