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17. Project Management. Learning 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.

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Project management

17

Project Management


Learning objectives
Learning 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.


Learning objectives1
Learning 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.


Projects
Projects

Build A

A Done

Build B

B Done

Build C

C Done

Build D

Ship

JAN

FEB

MAR

APR

MAY

JUN

On time!

Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame.


Project management
Project 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 services


Project management1
Project 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 communications


Project management2
Project 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 leader


Project management3
Project Management

  • What are the tools?

    • Work breakdown structure

    • Network diagram

    • Gantt charts

    • Risk management


Planning and scheduling
Planning and Scheduling

Gantt Chart

Locate new facilities

Interview staff

Hire and train staff

Select and order furniture

Remodel and install phones

Move in/startup

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC


Key decisions
Key Decisions

  • 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 terminated


Project manager
Project Manager

Responsible for:

Work Quality

Human Resources Time

Communications Costs


Ethical issues
Ethical Issues

  • Temptation to understate costs

  • Withhold information

  • Misleading status reports

  • Falsifying records

  • Comprising workers’ safety

  • Approving substandard work


Project life cycle
Project Life Cycle

Feasibility

Planning

Management

Concept

Execution

Termination


Work breakdown structure
Work Breakdown Structure

Project X

Level 1

Level 2

Level 3

Level 4

Figure 17.2


Pert and cpm
PERT and CPM

PERT: Program Evaluation and Review Technique

CPM: Critical Path Method

  • Graphically displays project activities

  • Estimates how long the project will take

  • Indicates most critical activities

  • Show where delays will not affect project


The network diagram
The 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.


The 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 path


Project network activity on arrow
Project Network – Activity on Arrow

Orderfurniture

4

Furnituresetup

2

Locatefacilities

Remodel

1

5

6

Move in

Interview

Hire andtrain

3

Figure 17.4

AOA


Project network activity on node
Project Network – Activity on Node

Orderfurniture

Furnituresetup

Locatefacilities

2

6

1

Move in

Remodel

5

S

7

Hire andtrain

Interview

4

3

Figure 17.4

AON


Network conventions
Network Conventions

a

b

c

a

c

b

a

c

a

c

Dummy

activity

b

b

d


Time estimates
Time Estimates

  • Deterministic

    • Time estimates that are fairly certain

  • Probabilistic

    • Estimates of times that allow for variation


Example 1
Example 1

6 weeks

4

Orderfurniture

3 weeks

2

Furnituresetup

8 weeks

Locatefacilities

Remodel

Move in

11 weeks

1

5

6

1 week

Interview

Hire and train

4 weeks

9 weeks

3

Figure 17.5

Deterministic

time estimates


Example 1 solution
Example 1 Solution

Critical Path


Computing algorithm
Computing Algorithm

  • Network activities

    • ES: early start

    • EF: early finish

    • LS: late start

    • LF: late finish

  • Used to determine

    • Expected project duration

    • Slack time

    • Critical path


Probabilistic time estimates
Probabilistic 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 required


Probabilistic estimates
Probabilistic Estimates

to

tm

te

tp

Activity

start

Optimistictime

Most likely

time (mode)

Pessimistic

time

Figure 17.8

Beta Distribution


Expected time
Expected Time

te

=

to + 4tm +tp6

te = expected time

to = optimistic time

tm = most likely time

tp = pessimistic time


Variance
Variance

(tp – to)2

36

2 =

2= variance

to = optimistic time

tp = pessimistic time


Project management

Optimistic

time

Most likely

time

Pessimistic

time

2-4-6

b

2-3-5

c

1-3-4

a

3-4-5

d

3-5-7

e

5-7-9

f

2-3-6

g

3-4-6

i

4-6-8

h

Example 5


Example 5 time estimates
Example 5 Time Estimates

4.00

b

3.17

c

2.83

a

4.00

d

5.0

e

7.0

f

3.33

g

4.17

i

6.0

h

Tabc = 10.0Tdef = 16.0Tghi = 13.50


Path probabilities
Path Probabilities

Specified time – Path mean

Path standard deviation

Z =

Z indicates how many standard deviations

of the path distribution the specified tine

is beyond the expected path duration.


Project management

17

Weeks

1.00

a-b-c

Weeks

10.0

d-e-f

Weeks

16.0

1.00

g-h-i

Weeks

13.5

Example 6


Time cost trade offs crashing
Time-cost Trade-offs: Crashing

  • Crash – shortening activity duration

  • Procedure for crashing

    • Crash the project one period at a time

    • Only an activity on the critical path

    • Crash the least expensive activity

    • Multiple critical paths: find the sum of crashing the least expensive activity on each critical path


Time cost trade offs crashing1
Time-Cost Trade-Offs: Crashing

Total

cost

Expected indirect costs

Shorten

CRASH

Cumulative

cost of crashing

Shorten

Optimum

Figure 17.11


Project management

10

b

6

a

2

f

5

c

9

e

4

d

Example 7


Advantages of pert
Advantages of PERT

4

2

1

5

6

3

  • Forces managers to organize

  • Provides graphic display of activities

  • Identifies

    • Critical activities

    • Slack activities


Limitations of pert
Limitations of PERT

Important activities may be omitted

Precedence relationships may not be correct

Estimates may include a fudge factor

May focus solelyon critical path

4

2

1

5

6

142 weeks

3


Goldratt s critical chain
Goldratt’s Critical Chain

  • Goldratt’s insight on project management

    • Time estimates are often pessimistic

    • Activities finished ahead of schedule often go unreported

    • With multiple projects, resources needed for one project may be in use on another


Project management software
Project Management Software

  • Computer aided design (CAD)

  • Groupware (Lotus Notes)

  • CA Super Project

  • Harvard Total Manager

  • MS Project

  • Sure Track Project Manager

  • Time Line


Advantages of pm software
Advantages of PM Software

  • Imposes a methodology

  • Provides logical planning structure

  • Enhances team communication

  • Flag constraint violations

  • Automatic report formats

  • Multiple levels of reports

  • Enables what-if scenarios

  • Generates various chart types


Project risk management
Project Risk Management

  • Risk: occurrence of events that have undesirable consequences

    • Delays

    • Increased costs

    • Inability to meet specifications

    • Project termination


Risk management
Risk Management

  • Identify potential risks

  • Analyze and assess risks

  • Work to minimize occurrence of risk

  • Establish contingency plans


Summary
Summary

  • Projects are a unique set of activities

  • Projects go through life cycles

  • PERT and CPM are two common techniques

  • Network diagrams

  • Project management software available