17Learning ObjectivesSlide 3ProjectsProject ManagementSlide 6Slide 7Slide 8Planning and SchedulingKey DecisionsProject ManagerEthical IssuesProject Life CycleWork Breakdown StructurePERT and CPMThe Network DiagramThe Network Diagram (cont’d)Project Network – Activity on ArrowProject Network – Activity on NodeNetwork ConventionsTime EstimatesExample 1Example 1 SolutionComputing AlgorithmProbabilistic Time EstimatesProbabilistic EstimatesExpected TimeVarianceSlide 29Example 5 Time EstimatesPath ProbabilitiesSlide 32Time-cost Trade-offs: CrashingTime-Cost Trade-Offs: CrashingSlide 35Advantages of PERTLimitations of PERTGoldratt’s Critical ChainProject Management SoftwareAdvantages of PM SoftwareProject Risk ManagementRisk ManagementSummaryVideo: Work BreakdownVideo: Project Materials/DelaysVideo: Project SchedulingVideo: PERT/CPMMcGraw-Hill/IrwinCopyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.1717Project Management17-2Learning ObjectivesLearning ObjectivesDiscuss the behavioral aspects of projects in terms of project personnel and the project manager. Discuss the nature and importance of a work breakdown structure in project management. Give a general description of PERT/CPM techniques. Construct simple network diagrams.17-3Learning ObjectivesLearning ObjectivesList the kinds of information that a PERT or CPM analysis can provide. Analyze networks with deterministic times. Analyze networks with probabilistic times. Describe activity “crashing” and solve typical problems.17-4Unique, one-time operations designed to Unique, one-time operations designed to accomplish a specific set of objectives in a limited accomplish a specific set of objectives in a limited time frame.time frame.Build AA DoneBuild BB DoneBuild CC DoneBuild DShipJAN FEB MAR APR MAY JUNOn time!ProjectsProjects17-5Project ManagementProject ManagementHow is it different?Limited time frameNarrow focus, specific objectivesLess bureaucraticWhy is it used?Special needsPressures for new or improves products or services17-6Project ManagementProject ManagementWhat are the Key MetricsTimeCostPerformance objectivesWhat are the Key Success Factors?Top-down commitmentHaving a capable project managerHaving time to planCareful tracking and controlGood communications17-7Project ManagementProject ManagementWhat are the Major Administrative Issues?Executive responsibilitiesProject selectionProject manager selectionOrganizational structureOrganizational alternativesManage within functional unitAssign a coordinatorUse a matrix organization with a project leader17-8Project ManagementProject ManagementWhat are the tools?Work breakdown structureNetwork diagramGantt chartsRisk management17-9Planning and SchedulingPlanning and SchedulingMAR APR MAY JUN JUL AUG SEP OCT NOV DECLocate new facilitiesInterview staffHire and train staffSelect and order furnitureRemodel and install phonesMove in/startupGantt Chart17-10Deciding which projects to implementSelecting a project managerSelecting a project teamPlanning and designing the projectManaging and controlling project resourcesDeciding if and when a project should be terminatedKey DecisionsKey Decisions17-11Project ManagerProject ManagerResponsible for:Work QualityHuman Resources TimeCommunications Costs17-12Temptation to understate costsWithhold informationMisleading status reportsFalsifying recordsComprising workers’ safetyApproving substandard workEthical IssuesEthical Issues17-13Project Life CycleProject Life CycleConceptFeasibilityFeasibilityPlanningPlanningExecutionExecutionTerminationTerminationManagement17-14Work Breakdown StructureWork Breakdown StructureProject XProject XLevel 1Level 2Level 3Level 4Figure 17.217-15PERT and CPMPERT and CPMPERT: Program Evaluation and Review TechniqueCPM: Critical Path MethodGraphically displays project activitiesEstimates how long the project will takeIndicates most critical activitiesShow where delays will not affect project17-16The Network DiagramThe Network DiagramNetwork (precedence) diagram – diagram of project activities that shows sequential relationships by the use of arrows and nodes.Activity-on-arrow (AOA) – a network diagram convention in which arrows designate activities. Activity-on-node (AON) – a network diagram convention in which nodes designate activities.Activities – steps in the project that consume resources and/or time.Events – the starting and finishing of activities, designated by nodes in the AOA convention.17-17The Network Diagram (cont’d)The Network Diagram (cont’d)PathSequence of activities that leads from the starting node to the finishing nodeCritical pathThe longest path; determines expected project durationCritical activitiesActivities on the critical pathSlackAllowable slippage for path; the difference the length of path and the length of critical path17-18Project Network – Activity on Project Network – Activity on ArrowArrow12345 6LocatefacilitiesOrderfurnitureFurnituresetupInterviewHire andtrainRemodelMove inFigure 17.4AOA17-19Project Network – Activity on Project Network – Activity on NodeNode12356LocatefacilitiesOrderfurnitureFurnituresetupInterviewRemodelMove in4Hire andtrain7SFigure 17.4AON17-20Network ConventionsNetwork Conventionsabc abcabcdabcDummyactivity17-21Time EstimatesTime EstimatesDeterministicTime estimates that are fairly certainProbabilisticEstimates of times that allow for variation17-22Example 1Example 112345 68 weeks6 weeks3 weeks4 weeks9 weeks11 weeks1 weekLocatefacilitiesOrderfurnitureFurnituresetupInterviewHire and trainRemodelMove inDeterministicDeterministictime estimatestime estimatesFigure 17.517-23Example 1 SolutionExample 1 SolutionP a t h L e n g t h( w e e k s )S l a c k1 - 2 - 3 - 4 - 5 - 61 - 2 - 5 - 61 - 3 - 5 - 61 82 01 4206Critical PathCritical Path17-24Network activitiesES: early startEF: early finishLS: late startLF: late finishUsed to determineExpected project durationSlack timeCritical pathComputing AlgorithmComputing Algorithm17-25Probabilistic Time EstimatesProbabilistic Time EstimatesOptimistic timeTime required under optimal conditionsPessimistic timeTime required under worst conditionsMost likely timeMost probable length of time that will be