Lecture 5: Project Management

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Martina Hutchinson
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1 Lecture 5: Management organization structure ritical path method (PM) Time/cost tradeoff PM with three activity it time estimates t Readings: hapter 10 Management series of related jobs usually directed toward some major output t and requiring i a significant ifi period of time to perform. (e.g., getting married) Management The management age e activities t of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project. 1 2 Work reakdown Structure (WS) Life ycle Level Program Task 1.1 Task 1.2 oncept Feasibility Planning Execution Manage ement 3 Subtask Subtask Termination 4 Work Package Work Package

2 What to Manage in a? structure: pure, functional, matrix. Planning ctivities; Resources How to shorten a project? Which h activities iti to expedite? Time/cost trade-off Performance measures Time; ost; Quality Pure self-contained team works full-time on the project. dvantages and isadvantage The project manager has full authority over the project. Team pride, motivation, and commitment are high. Team members report to one boss. ecisions made quickly. uplication of resources. Lack of technology transfer. Team members have no functional area "home. 5 6 Functional Research and evelopment President Engineering Manufacturing Functional : dvantages and isadvantages team member can work on several projects. Technical expertise is maintained within the functional area. The functional area is a home after the project is completed. iti ritical mass of specialized knowledge. spects of the project that are not directly related to the functional area get shortchanged. Motivation of team members is often weak. Needs of the client are secondary and are responded to slowly. 7 8

3 Matrix President Matrix : dvantages and isadvantages Manager Manager Manager R and Engineering Mfg Marketing manager decides what and when. Functional managers decide how. Enhanced inter-functional communications. Pinpointed responsibility. uplication of resources is minimized. Functional home for team members. Policies i of the parent organization are followed. Too many bosses. epends on project manager s negotiating skills. Potential ti for sub-optimization. i 9 10 Questions about a How long does it take to complete a project? When should each activity start? Which activities might delay the project? In other words, which activities should the project manager pay particular attention to? nswer: ritical path method (PM) Oversea Motion Pictures Ltd ctivity Immediately Predecessor urations (weeks) Hire actors, actresses - 6 Hire film directors - 11 Hire crew members 8 ast announcement, 9 E Stage setting 8 F Music Recording 7.5 G Film shooting,e,f,

4 ritical Path Method: 4 asic Steps The Network iagram Step 1: onstruct the Network iagram. Each node represents an activity. rrows indicate sequencing requirements. Start,6,8,9 E,8 G,7 Finish Example: immediately precedes.,11 F,7.5 path is a sequence from Start to Finish. The Start and finish nodes may be omitted ritical Path Method ompute ES s andef s Step 2: ompute ES and EF. ES = The earliest start time of an activity EF = The earliest finish time of an activity n activity may start when all its predecessors are finished: ES(an activity) = maximum(ef s of all its predecessors) ES EF,6 Start 6,6 11,11,8,9 E8 E,8 F,7.5 G7 G,7 EF = ES + activity duration 15 16

5 Step 3: ompute the latest finish and start time. LF = The latest time at which an activity may be finished without delaying the project beyond its earliest completion date LS = The latest time at which an activity may start without t delaying the project beyond its earliest completion date LF (an activity) = minimum(ls s of all its successors) LS = LF activity duration ompute LF s andls s ES EF,6 LS LF Start 6,6 11,11,8 Slack time = LF EF = LS ES,9 E8 E,8 F,7.5 G7 G, Slack Time and ritical Path Step 4: ompute the slack time. Slack time of an activity: the amount of time by which the activity may be delayed without delaying the project, given that all other activities remain unchanged. ritical path: a sequence of activities with zero slack time. It is the longest path from Start to Finish. There can be more than one critical paths. ctivity E F G Slack Time = LF EF = LS - ES 19 20

6 The Gantt hart ompletion Time = 35 weeks ritical Paths: ---G E F Gantt hart is a useful tool for scheduling and describing activities iti in a project. It can be used with or without t PM. G 35 Time ritical Path Method (PM): Four Steps 1. onstruct the network diagram. 2. ompute the earliest start and finish times of each activity. etermine the earliest completion time of the project. 3. ompute the latest finish and start times of each activity. etermine the slacks. 4. etermine critical activities and critical paths. PM applies if activity times are known with certainty Example: Writing a term paper ctivity ty Immediately urations (days) Predecessor omputer programming g - 7 Implementation 3 rafting - 6 Proof reading 3 E Final write-up, 2 How long does it take? Which activities are critical? 23 Writing a term paper: How to finish sooner Suppose the due date is 10 days from now. How would you shorten the paper writing time? ctivity Normal Time Max rashing Time ost/day to expedite 7 3 $ $ $ $150 E 2 1 $250 Which activities would you expedite in order to finish the paper in 10 days with minimum additional cost? 24

7 Oversea Motion Pictures Ltd We have found that the project takes 35 weeks. ctivity Normal Max rashing ost/week Time Time to expedite Now for some reason, the project needs to be completed in 32 weeks Which h activities iti would E you crash and by how F many weeks? G Time/ost Tradeoff Goal: To reduce the project duration by crashing on selected activities as long as the benefit is greater than the cost. rashing priorities: critical activities more economical On more critical paths Time-ost Trade-Off: To What Extent Should a be rashed? under Resource onstraints: ouple ressing a hild ost Total cost umulative cost of crashing Expected indirect costs Optimum Shorten RSH Shorten duration Start Hat 5 Underwear 15 Socks 10 Shirt 10 oat 5 Pants 15 Shoes 15 Finish iih 27 28

8 PM with Three ctivity Time Estimates Network Immediate Task Predecesors Optimistic Most Likely Pessimistic None None E F G H E,F I GH G,H E F G H I Expected Time alculations Task Immediate Predecesors Expected Time None 7 None E 11 F 7 G 11 H E,F 4 I G,H 18 Expected Time = ET()= 3+4(6)+15 6 ET()=42/6=7 Opt. Time + 4(Most Likely Time) + Pess. Time 6 Network (7) (5.33) (14) E (11) F (5) (7) G (11) uration = 54 ays H (4) I (18) 31 32

9 Probability Exercise What is the probability of finishing this project in less than 53 days? P(t < ) =53 T E = 54 t ctivity variance, Pessim. - Optim. = ( ) Task Optimistic Most Likely Pessimistic Variance E F G H I Z = - T E 2 cp 33 (Sum the variance along the critical path.) ) 2 = P(t < ) What is the probability that the project duration will exceed d56 weeks? T E = 54 =53 Z = - T E = 41 = cp P(Z < -.156) = =.436, or 43.6 % (ppendix ) There is a 43.6% probability that this project will be completed in less than 53 weeks. t P(t < ) T E =54 Z = - T E = 2 cp = =.312 P(Z <.312) = =.378,, or 37.8 % t 35 36

EXERCISE Draw the network diagram. a. Activity Name A B C D E F G H

EXERCISE Draw the network diagram. a. Activity Name A B C D E F G H XRIS. What do you mean by network analysis? xplain with counter examples.. What are the basic differences between PM and PRT analysis of project work?. State the rule of constructing the network diagram..