CHAPTER 10

Projects

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Learning Objectives

1. Explain what project management is and why it is important.

2. Identify the different ways projects can be structured.

3. Describe how projects are organized into major subprojects.

4. Understand what a project milestone is.

5. Determine the “critical path” for a project.

6. Demonstrate how to “crash,” or reduce the length, of a project.

Project is a series of related jobs usually directed toward some major output and requiring a significant period of time to perform

Project Management are the management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project

Project Management Defined

Work Breakdown Structure

Statement of work (SOW): a written description of the objectives to be achieved

Task: a further subdivision of a project Usually shorter than several months Performed by one group or organization

Work package: a group of activities combined to be assignable to a single organizational unit

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Work Breakdown Structure Continued

Project milestones: specific events on the project

Work breakdown structure (WBS): defines the hierarchy of project tasks, subtasks, and work packages

Activities: pieces of work that consume time Defined within the context of the WBS

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Work Breakdown Structure

Program

Project 1 Project 2

Task 1.1

Subtask 1.1.1

Work Package 1.1.1.1

Level

1

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Task 1.2

Subtask 1.1.2

Work Package 1.1.1.2

A work breakdown structure defines the hierarchy of project tasks, subtasks, and work packages

Project Control Charts

Charts are useful because their visual presentation is easily understood

Software is available to create the charts Gantt chart: a bar chart showing both the

amount of time involved and the sequence in which activities can be performed

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Tracking ProgressGantt Chart

Activity 1Activity 2Activity 3Activity 4Activity 5Activity 6

Time

Vertical Axis: Always Activities or Jobs

Vertical Axis: Always Activities or Jobs

Horizontal Axis: Always TimeHorizontal Axis: Always Time

Horizontal bars used to denote length of time for each activity or job.

Horizontal bars used to denote length of time for each activity or job.

Earned Value Management (EVM)

A technique for measuring project progress in an objective manner

Has the ability to combine measurements of scope, schedule, and cost in a project

Provides a method for evaluating the relative success of a project at a point in time

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Managing Resources

In addition to scheduling each task, must assign resources

Software can spot over-allocation Allocations exceed resources

Must either add resources or reschedule Moving a task within slack can free up resources

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Tracking Progress

Actual progress on a project will be different from the planned progress Planned progress is called the baseline

A tracking Gantt chart superimposes the current schedule onto a baseline so deviations are visible

Project manager can then manage the deviations

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Network-Planning Models

A project is made up of a sequence of activities that form a network representing a project

The path taking longest time through this network of activities is called the “critical path”

The critical path provides a wide range of scheduling information useful in managing a project

Critical Path Method (CPM) helps to identify the critical path(s) in the project networks

Prerequisites for Critical Path Methodology

A project must have:

well-defined jobs or tasks whose completion marks the end of the project;

independent jobs or tasks;

and tasks that follow a given sequence.

Critical Path Method

Consider the following consulting project:Activity Designation Immed. Pred. Time (Weeks)Assess customer's needs A None 2Write and submit proposal B A 1Obtain approval C B 1Develop service vision and goals D C 2Train employees E C 5Quality improvement pilot groups F D, E 5Write assessment report G F 1

Develop a critical path diagram and determine the duration of the critical path and slack times for all activities.

CPM with Three Activity Time Estimates

If a single time estimate is not reliable, then use three time estimates Minimum Maximum Most like

Allows us to obtain a probability estimate for completion time for the project

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Finding Activity Time and Variance

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Example: Activity Expected Times and Variances

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Example: Network with Three Time Estimates

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Time-Cost Models

Basic Assumption: Relationship between activity completion time and project cost

Time Cost Models: Determine the optimum point in time-cost tradeoffs Activity direct costs Project indirect costs Activity completion times

Procedure for Project Crashing

1. Prepare a CPM-type network diagram

2. Determine the cost per unit of time to expedite each activity

3. Compute the critical path

4. Shorten the critical path at the least cost

5. Plot project direct, indirect, and total-cost curves and find the minimum-cost schedule

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Any Questions?