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Science (MS)
Project Management
Outline
Global Company Profile:
Bechtel Group
What is Project and Project
Management ?
Global Leaders thoughts
about Project Management.
The Importance of Project
Management
Outline - Continued
Project Planning
The Project Manager
Work Breakdown Structure
Project Scheduling
Project Controlling
Outline - Continued
Project Management Techniques:
CPM and PERT
The Framework of CPM and PERT
Network Diagrams and Approaches
Activity-on-Node (AON) Example
Activity-on-Arrow (AOA) Example
Outline - Continued
Determining the Project Schedule
Forward Pass
Backward Pass
Calculating Slack Time and Identifying
the Critical Path(s)
Variability in Activity Times
Three Time Estimates in PERT
Probability of Project Completion
Learning Objectives
When you complete this topic you should
be able to:
1. Create a work breakdown structure of your
project
2. Draw Activity-on-Arrow (AOA) and Activity-
on-Node (AON) networks
3. Complete both forward and backward
passes for a project
4. Determine a Critical Path (CP)
5. Calculate the Variance of activity times
Bechtel Projects
Building 26 massive distribution centers in just
two years for the internet company Webvan Group
($1 billion)
Constructing 30 high-security data centers
worldwide for Equinix, Inc. ($1.2 billion)
Building and running a rail line between London
and the Channel Tunnel ($4.6 billion)
Developing an oil pipeline from the Caspian Sea
region to Russia ($850 million)
Expanding the Dubai Airport in the UAE ($600
million), and the Miami Airport in Florida ($2
billion)
Bechtel Projects
Building liquid natural gas plants in Yemen $2
billion) and in Trinidad, West Indies ($1 billion)
Building a new subway for Athens, Greece ($2.6
billion)
Constructing a natural gas pipeline in Thailand
($700 million)
Building 30 plants for iMotors.com, a company
that sells refurbished autos online ($300 million)
Building a highway to link the north and south of
Croatia ($303 million)
Strategic Importance of
Project Management
Microsoft Windows Vista Project:
hundreds of programmers
millions of lines of code
hundreds of millions of dollars cost
Hard Rock Cafe Rockfest Project:
100,000 + fans
planning began 9 months in advance
What is Project ?
A project is a one-shot, time limited, goal
directed, major undertaking and a combination
of human and non-human resources pooled
together to achieve a specific purpose an
organization.
Planyourworkfirst..thenworkonyourplan
Project Characteristics
Single unit
Many related activities
Difficult production planning and
inventory control
General purpose equipment
High labor skills
Global Leaders Thoughts on
Project Management ?
Global Leaders Thoughts on
Project Management ?
Global Leaders Thoughts on
Project Management ?
Global Leaders Thoughts on
Project Management ?
Global Leaders Thoughts on
Project Management ?
Examples of Projects
Building Construction
Research Project
Management of Projects
1. Planning - goal setting, defining the
project, team organization
2. Scheduling - relates people, money,
and supplies to specific activities
and activities to each other
3. Controlling - monitors resources,
costs, quality, and budgets; revises
plans and shifts resources to meet
time and cost demands
Project Management
Activities
Planning
Scheduling
Objectives
Project activities
Resources
Start & end times
Work break-down
schedule Network
Organization
Controlling
Monitor, compare, revise, action
Project Planning,
Scheduling, and Controlling
Budgets
Delayed activities report
Slack activities report
CPM/PERT
Gantt charts
Milestone charts
Cash flow schedules
Human Quality
Resources Marketing Finance Design Production
Mgt
Project
Project 1 Manager
Mechanical Test
Technician
Engineer Engineer
Project
Project 2 Manager
Electrical Computer
Technician
Engineer Engineer
Structuring Project
Pure Project
Functional Project
Matrix Project
Pure Project Structure
A Pure project is where a self-contained team
works full time on the project
Duplication of resources.
Organizational goals and policies are
ignored.
Lack of new technology transfer due to
weakened functional divisions
Team members have no functional area
home.
Functional Project Structure
A functional project is housed within a functional
division.
President
Research and
Engineering Manufacturing
Development
Example,
Example, Project
Project B
B is
is in
in the
the functional
functional
area
area of
of Research
Research and
and Development.
Development.
Bobera, D. (2008). Project Management Organization. Management, 3(1), 003-009 .
Functional Project Structure
Advantages:
Project 1
Project 2
Project 3
Project 4
Matrix Organization
President
Research and
Engineering Manufacturing Marketing
Development
Manager
Project A
Manager
Project B
Manager
Project C
Matrix Project Structure
Advantages:
It a graphical representation
of the activities involved in a
sequence and the time
involved to complete that.
A Simple Gantt Chart
Time
J F M A M J J A S
Design
Prototype
Test
Revise
Production
A Simple Gantt Chart for
Boiler Replacement
A Simple Gantt Chart
Service For A Delta Jet
Passengers Deplaning
Baggage claim
Baggage
Container offload
Fueling Pumping
Engine injection water
Cargo and mail
Container offload
Galley servicing Main cabin door
Aft cabin door
Lavatory servicing
Aft, center, forward
Drinking water
Loading
Cabin cleaning First-class section
Economy section
Cargo and mail
Container/bulk loading
Flight services Galley/cabin check
Receive passengers
Operating crew
Aircraft check
Baggage
Loading
Passengers
Boarding
0 10 20 30 40
Time, Minutes
Project Control Reports
Detailed cost breakdowns for each task
Total program labor curves
Cost distribution tables
Functional cost and hour summaries
Raw materials and expenditure forecasts
Variance reports
Time analysis reports
Work status reports
PERT and CPM
Network techniques
Developed in 1950s
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
Each uses a different estimate of
activity times
Six Steps PERT & CPM
C and D cannot A C
A C begin until both
(d) A and B are
B D completed
B D
C cannot begin
until both A and B
A C are completed; D A C
(e) cannot begin until Dummy activity
B D B is completed. A
dummy activity is B D
introduced in AOA
A Comparison of AON and
AOA Network Conventions
Activity on Activity Activity on
Node (AON) Meaning Arrow (AOA)
B and C cannot
begin until A is
completed. D
A B D cannot begin A B D
(f) until both B and
C are completed. Dummy C
C A dummy activity
activity is again
introduced in
AOA.
Network-Planning Models
A project is made up of a sequence of
activities that form a network
representing a project.
The path taking longest time through
this network of activities is called the
Critical Path.
The critical path provides a wide
range of scheduling information
useful in managing a project.
Networking Conventions
(A network diagram using arrows and circles
depicts the planned relationships between the
activity)
Activity-On-Node (AON) convention Activity-On-Arrow (AOA) convention
E(5)
Ex1: Determine Early Start (ES)
and Early Finish (EF) times
ES=4
EF=6
E(5)
Ex1: Determine Late Start
(LS) and Late Finish (LF)
times
ES=4
EF=6
LS=4
LF=9
Example 1: Critical Path & Slack
ES=4 Slack = LS-ES = LF-EF
= (7-4) = (9-6) = 3 Wks
EF=6
LS=4
LF=9 Duration = 15 weeks
Example 2
Solve Act. Imed. Pred. Days
A None 1
B A 4
C A 3
D A 7
E B 6
F C, D 2
G E, F 7
H D 9
I G,H 4
Diagram B
C
A
A
4
3
D A 7
E B 6
F C, D 2
G E, F 7
H D 9
I G,H 4
B(4) E(6)
G(7)
D(7) H(9)
E(6)
G(7)
D(7) H(9)
All Paths:
1. A B E G I = 1+4+6+7+4=22 days
2. A C F G I = 17 days
3. A D F G I = 21 days
4. A D H I = 21 days
E(6)
G(7)
D(7) H(9)
All Paths:
1. A B E G I = 22 days Critical Pat
2. A C F G I = 17 days
3. A D F G I = 21 days
4. A D H I = 21 days
Ex2: Determine Early Start (ES)
and Early Finish (EF) times
ES=1 ES=5
EF=5 EF=11 ES=11
EF=18
ES=0 E(6)
EF=1 ES=1 G(7) ES=18
EF=4 EF=22
A(1) C(3) F(2)
ES=8
EF=10
H(9)
D(7)
ES=1
EF=8 ES=8
EF=17
Ex1: Determine Late Start
(LS) and Late Finish (LF) times
ES=1 LS=1 ES=5 LS=5
EF=5 LF=5 EF=11 LF=11 ES=11 LS=11
EF=18 LF=18
ES=0 E(6)
EF=1 ES=8 G(7) ES=18
ES=1 EF=10
EF=4 EF=22
A(1) C(3) F(2)
LS=6
LF=9 LS=9
LS=0 LS=18
LF=11
LF=1 H(9) LF=22
D(7)
ES=1 LS=2 ES=8 LS=9
EF=8 LF=9 EF=17 LF=18
ES=1 LS=1 ES=5 LS=5
EF=5 LF=5 EF=11 LF=11 ES=11 LS=11
EF=18 LF=18
E(6)
ES=0
ES=1 ES=8 G(7)
EF=1 ES=18
EF=4 EF=10 EF=22
A(1) C(3) F(2)
LS=6
LF=9
LS=0 LS=9
LF=11 LS=18
LF=1 D(7) H(9)
ES=1 LS=2 ES=8 LS=9 LF=22
EF=8 LF=9 EF=17 LF=18
Activity LS-ES Slack On Critical Path
A 0-0 0
1. A+B+E+G+I = 22 days
B 1-1 0
C 6-1 5
D 2-1 1
E 5-5 0
F 9-8 1
G 11-11 0
H 9-1 1
I 18-18 0
Example 3. CPM with Single Time
Estimate
Consider the following consulting pro
Activity Designation Immed. Pred. Time (Weeks)
Assess customer's needs A None 21
Write and submit proposal B A 5
Obtain approval C A 7
Develop service vision and goals D B 2
Train employees E C, D 5
Quality improvement pilot groups F C, D 8
Write assessment report G E, F 2
Immediate
Task Predecesors Optimistic Most Likely Pessimistic
A None 3 6 15
B None 2 4 14
C A 6 12 30
D A 2 5 8
E C 5 11 17
F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28
Example 5. PERT
Immediate
Task Predecesors Optimistic Most Likely Pessimistic
A None 3 6 15
B None 2 4 14
C A 6 12 30
D A 2 5 8
E C 5 11 17
F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28
1. Calculate the Expected Time and the Variance
for Each activity
2. Draw the Critical Path Diagram
3. Show the Critical Path and its Duration
4. What is the Probability that the project can be
completed in 53weeks.
Example 5.
Step1: Expected Time
Calculations
ET(A)= 3+4(6)+15
Immediate Expected 6
Task Predecesors Time
A None 7 ET(A)=42/6=7
B None 5.333
C A 14
D A 5
E C 11
F D 7
G B 11
H E,F 4
I G,H 18
Opt. Time + 4(Most Likely Time) + Pess. Time
Expected Time =
6
Step2: Activity Variance Calculations
Pessim. - Optim. 2
Activity variance, 2
= ( )
6
1. Draw the critical path diagram
2. Show the critical path and its
duration
3. What is the probability that the
project can be completed in
53weeks.
Step 3: Network Diagram and
Duration
C(14) E(11)
A(7) H(4)
D(5) F(7)
I(18)
B G(11)
(5.333)
All Paths:
1.7+14+11+4+18 = 54 Critical Path
2.7+5+7+4+18 = 41
3.5.333+11+18 = 34.333
Example 5. Probability Exercise
What is the probability of finishing this project in
less than 53 days?
p(t < D)
D=53 t
TE = 54
Where
D = Desired completion date for the D - TE
Z =
project
project
Step 4: Sum the variance along the
critical path
Pessim. - Optim.
Activity variance, 2
= ( )2
6
Task Optimistic Most Likely Pessimistic Variance
A 3 6 15 4
B 2 4 14
C 6 12 30 16
D 2 5 8
E 5 11 17 4
F 3 6 15
G 3 9 27
H 1 4 7 1
I 4 19 28 16
critical path.)
Step
5 p(t < D)
t
TE = 54
D=53
D - TE 53- 54
Z = = = -.156
cp
2 41
p(t < D)
t
TE = 54
D=56
D - TE 56 - 54
Z = = = .312
cp
2 41