485 33 Powerpoint-slides Ch-7

8/12/2019 485 33 Powerpoint-slides Ch-7

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Oxford University Press 2013. All rights reserved. Oxford University Press 2013. All rights reserved.


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Oxford University Press 2013. All rights reserved.

A project can be considered to be the

achievement of a specific objective which

involves a series of activities and tasks which

consume resources. Project managementis defined as The

planning, monitoring and control of all

aspects of a project and the motivation of

all those involved in it to achieve the projectobjectives on time and to the specified cost,

quality, and performance.

Definitions


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Projects by size

1. Major Projects

2. Large Projects

3. Medium Projects

4. Small Projects

Types of Projects


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Type 2

Projects

Product

Development

(Water)Type 1

Projects

Engineering

(Earth)

Type 4

Projects

Research &

Organizational

Change

(Air)Type 3

Projects

Systems

Development

(Fire)

Methods

Well

Defined

Goals Well Defined

Yes

Yes

No

No

Greater

chance ofsuccess

Greater

chance of

failure

Turner & Cochranes Goals & Methods Matrix

Projects by Resource Type


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Construction of the warehouse (a Type 1 building project) Creation of the establishment to run the warehouse

(a Type 2 logistics project)

Writing of the computer systems to operate the warehouse

(a Type 3 IS project)

Redeployment & training of people (a Type 4 personnel project)

Changing the buying function from hospital to region

(a Type 4 organizational change project)

Changing the budget from hospital based to region based

(Type 3, systems project) Implementing in 15 hospitals (Type 4 organizational change project)

Commissioning the warehouse (Type 2 logistics project)

Projects by Resource Type


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Role of Project Management in Other Functional Areas

of Management

Project

Management

Information Systems Management

A project of designing new software.

A project of creating a computer

network in an organization.

A project of implementing software in

an organization.

Human Resources Management

A project of recruiting more

employees in a department.

A project of training a group of

employees in a particular skill.A project of designing a new salary

structure of employees

Marketing Management

A project of launching a new

product in a region.

A project of designing the

promotion campaign of a product.

A marketing research project.

Financial Management

A project of designing a newfinancial instrument.

A project of launching a new

financial instrument in a region.

A project of reviving an old

financial instrument in a region.


7/17 Oxford University Press 2013. All rights reserved.

The projects in which the time duration ofvarious activities can be determined up togreat accuracy are the ones which can be

planned with the help of a technique calledthe Critical Path Method (CPM).

Programme Evaluation & Review Technique

(PERT)is applied in projects where the timedurations of various activities are not known.This is especially suitable for Research andDevelopment (R&D) projects.

CPM and PERT



1

2

3

4

5

6

7 8

A18[0,18]

[0,18]

B3[0,3]

[17,20]D4[7,11]

[20,24]

C1[0,1]

[13,14]

E6[1,7]

[14,20]

F8[1,9]

[16,24]

G6[1,7]

[14,20]

I5[18,23]

[19,24]

J22[18,40]

[18,40]

K7[23,30][24,31]

H11[7,18]

[20,31]

L9[30,39]

[31,40]

M5[40,45]

[40,45]

9



Time (days)

Total Available Time

Total Float

(15 days)

Performance Time

(8 days)

LF

LS

Total Float

(15 days)

EF

ES

Performance Time

(8 days)

Activity F

Activity F

Activity F Partial TF

(10 days)

Partial TF

(5 days)

Case 1

Case 2

Case 3

5 10 15 20 25

1 24

0



Time (days)

Free Float

(14 days)

Performance Time

(8 days)

Performance Time

(8 days)

Activity F

Activity F

Case 1

Case 2

5 10 15 20 25

1 24

0

Activity K

If Float

(Head Slack)

Free Float

(14 days)

If Float

(Head Slack)

Activity K

ES=23

LS=24



Time (days)

Available Time

Performance Time

(8 days)

Activity F

5 10 15 20 250

Activity KActivity C

LS LF ES EF

IndependentFloat



Programme Evaluation & Review Technique (PERT)

Optimistic Time (a) This time estimate is theshortest possible time estimated to be takenby an activity.

Pessimistic Time (b) - This time estimate is thelongest possible time estimated to be takenby an activity.

Most Likely Time (m) This time estimate hasthe highest chance of occurrence accordingto the past experiences of the projectmanager.



0 a bm te

P

R

O

B

A

BI

L

I

T

Y

Time Duration of an activity

Beta CurveMaximum Probability



Crashing of a Project

0 1 2 3 4 5 6 7 8 9 10

Crash Time Normal Time

100

90

80

70

60

50

40

30

20

10

D

I

R

E

C

T

C

O

S

T

Time duration of an

activity (days)

o

o

o

(Rs)

Crash Cost

Normal Cost

Linear Approximation

Actual Curve



Earned Value Management (EVM) for Tracking

of Projects

Budgeted Cost of Work Scheduled (BCWS) It isthe sum of the cost budget for all the activitiesin the baseline (original) plan of the project atany specific future point in time. Thus, this isthe budgeted (planned) cost as per theproject plan for a part of the project to becompleted in a given time frame.

Budgeted Cost of Work Performed (BCWP)When a project is under implementation, a

certain part of the project is completed at agiven point in time. The budgeted (planned)cost of all the activities performed till thatpoint in time is called BCWP.



Earned Value Management (EVM) for

Tracking of Projects

Actual Cost of Work Performed (ACWP) It is theactual cost incurred in implementing a part of theproject till a given point in time.

Cost variance (CV) = BCWP ACWP

A negative value of CV indicates being overbudget and is obviously undesirable.

Schedule variance (SV) = BCWP BCWS

A negative value of SV indicates that less workhas been performed compared to what wasscheduled to be performed till a given point intime.

485 33 Powerpoint-slides Ch-7

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