1 Lecture 4 Project Management Chapter 17
Dec 21, 2015
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Project ManagementProject Management
How is it different? Limited time frame Narrow focus, specific objectives
Why is it used? Special needs Pressures for new or improves products or
services
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Project 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 communications
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Project ManagementProject Management
What are the tools? Work breakdown structure Network diagram Gantt charts Risk management
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Planning and SchedulingPlanning and Scheduling
MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Locate new facilities
Interview staff
Hire and train staff
Select and order furniture
Remodel and install phones
Move in/startup
Gantt Chart
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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
Key DecisionsKey Decisions
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Project ManagerProject Manager
Responsible for:
Work QualityHuman Resources TimeCommunications Costs
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Temptation to understate costs
Withhold information
Misleading status reports
Falsifying records
Compromising workers’ safety
Approving substandard work
Ethical IssuesEthical Issues
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Project Life CycleProject Life Cycle
Concept
FeasibilityFeasibility
PlanningPlanning
ExecutionExecution
TerminationTermination
Man
agem
ent
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PERT and CPMPERT 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
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The Network DiagramThe Network Diagram
Network (precedence) diagram
Activity-on-arrow (AOA)
Activity-on-node (AON)
Activities
consume resources and/or time
Events
points in time
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Project Network – Activity on NodeProject Network – Activity on Node
1
2
3
5
6
Locatefacilities
Orderfurniture
Furnituresetup
Interview
RemodelMove in
4
Hire andtrain
7S
Figure 17.4
AON
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The Network Diagram (cont’d)The Network Diagram (cont’d) Path
Sequence of activities that leads from the starting node to the finishing node
AON path: S-1-2-6-7 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
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Time EstimatesTime Estimates
Deterministic
Time estimates that are fairly certain
Probabilistic
Estimates of times that allow for variation
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Project Network – Activity on NodeProject Network – Activity on Node
1
2
3
5
6
Locatefacilities
Orderfurniture
Furnituresetup
Interview
RemodelMove in
4
Hire andtrain
7S
Figure 17.4
AON
8 weeks
6 weeks
3 weeks
4 weeks9 weeks
11 weeks
1 week
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Management Scientist SolutionManagement Scientist Solution
Path Length (weeks)
Slack
A-B-F-G A-E-G C-D-G
18 20 14
2 0 6
Critical PathCritical Path
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Example 1: Activity on Arc (AOA) Example 1: Activity on Arc (AOA) RepresentationRepresentation
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2
3
4
5 6
8 weeks
6 weeks
3 weeks
4 weeks9 weeks
11 weeks
1 week
Locate
facilities
Order
furniture Fu
rnitu
re
setup
InterviewHire
and train
Remodel Move in
DeterministicDeterministictime estimatestime estimates
Figure 17.5
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Network activities ES: early start EF: early finish LS: late start LF: late finish
Used to determine Expected project duration Slack time Critical path
Computing AlgorithmComputing Algorithm
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Advantages of PERTAdvantages of PERT
Forces managers to organize
Provides graphic display of activities
Identifies
Critical activities
Slack activities1
2
3
4
5 6