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© 2008 Prentice Hall, Inc. 3 – 1
OperationsManagementOperationsManagementChapter 3 –Project Management
PowerPoint presentation to accompanyHeizer/RenderPrinciples of Operations Management, 7eOperations Management, 9e
© 2008 Prentice Hall, Inc. 3 – 2
Outline
Profil Global Perusahaan : BechtelGroup
Pentingnya Manajemen Proyek Perencanaan Proyek
Manajemen Proyek Struktur Pemecahan Pekerjaan
(Work Breakdown)
Skedul Proyek
© 2008 Prentice Hall, Inc. 3 – 3
Outline - Continued
Pengendalian Proyek
Teknik Mengelola Proyek: PERT andCPMThe Framework of PERT and CPMNetwork Diagrams and ApproachesActivity-on-Node ExampleActivity-on-Arrow Example
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© 2008 Prentice Hall, Inc. 3 – 4
Outline - Continued
Menentukan Skedul ProyekForward PassBackward PassCalculating Slack Time and Identifying
the Critical Path(s)
Variasi Waktu Kegiatan Three Time Estimates in PERT
Probability of Project Completion
© 2008 Prentice Hall, Inc. 3 – 5
Outline - Continued
Cost-Time Trade-Offs and ProjectCrashing
Kritik Terhadap PERT and CPM Menggunakan Microsoft Project
Mengelola ProyekCreating a Project Schedule Using MS
ProjectTracking Progress and Managing
Costs Using MS Project
© 2008 Prentice Hall, Inc. 3 – 6
Tujuan Pembelajaran
1. Menciptakan StrukturPemecahan Pekerjaan.
2. Draw AOA and AON networks3. Complete both forward and
backward passes for a project4. Determine a critical path
When you complete this chapter youshould be able to:
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© 2008 Prentice Hall, Inc. 3 – 7
Learning Objectives
5. Calculate the variance of activitytimes
6. Crash a project7. Use Microsoft Project software
to create a project
When you complete this chapter youshould be able to:
© 2008 Prentice Hall, Inc. 3 – 8
Bechtel Projects
Building 26 massive distribution centers in justtwo years for the internet company WebvanGroup ($1 billion)
Constructing 30 high-security data centersworldwide for Equinix, Inc. ($1.2 billion)
Building and running a rail line between Londonand the Channel Tunnel ($4.6 billion)
Developing an oil pipeline from the Caspian Searegion to Russia ($850 million)
Expanding the Dubai Airport in the UAE ($600million), and the Miami Airport in Florida ($2billion)
© 2008 Prentice Hall, Inc. 3 – 9
Bechtel Projects Building liquid natural gas plants in Yemen $2
billion) and in Trinidad, West Indies ($1 billion) Building a new subway for Athens, Greece ($2.6
billion) Constructing a natural gas pipeline in Thailand
($700 million) Building 30 plants for iMotors.com, a company
that sells refurbished autos online ($300 million) Building a highway to link the north and south of
Croatia ($303 million)
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© 2008 Prentice Hall, Inc. 3 – 10
Strategic Importance ofProject Management
Microsoft Windows Vista Project:hundreds of programmersmillions of lines of codehundreds of millions of dollars cost
Hard Rock Cafe Rockfest Project:100,000 + fansplanning began 9 months in advance
© 2008 Prentice Hall, Inc. 3 – 11
Satu Unit Banyak kegiatan berkaitan. Sulit perencanakan produksi dan
perencanaan persediaan. Peralatan yang digunakan secara
umum. Tenaga kerja dengan skill yang
tinggi.
Karakteristik Proyek
© 2008 Prentice Hall, Inc. 3 – 12
Contoh Proyek
Building Construction
Research Project
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© 2008 Prentice Hall, Inc. 3 – 13
Mengelola Proyek
1. Planning - goal setting, defining theproject, team organization
2. Scheduling - relates people, money,and supplies to specific activitiesand activities to each other
3. Controlling - monitors resources,costs, quality, and budgets; revisesplans and shifts resources to meettime and cost demands
© 2008 Prentice Hall, Inc. 3 – 14
Planning Objectives Resources Work break-down
schedule Organization
Scheduling Project activities Start & end times Network
Controlling Monitor, compare, revise, action
Kegiatan PengelolaanProyek
© 2008 Prentice Hall, Inc. 3 – 15
Project Planning,Scheduling, and Controlling
Figure 3.1
Before Start of project Duringproject Timeline project
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© 2008 Prentice Hall, Inc. 3 – 16
Project Planning,Scheduling, and Controlling
Figure 3.1
Before Start of project Duringproject Timeline project
© 2008 Prentice Hall, Inc. 3 – 17
Project Planning,Scheduling, and Controlling
Figure 3.1
Before Start of project Duringproject Timeline project
© 2008 Prentice Hall, Inc. 3 – 18
Project Planning,Scheduling, and Controlling
Figure 3.1
Before Start of project Duringproject Timeline project
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© 2008 Prentice Hall, Inc. 3 – 19
Project Planning,Scheduling, and Controlling
Figure 3.1
Before Start of project Duringproject Timeline project
BudgetsDelayed activities reportSlack activities report
Time/cost estimatesBudgetsEngineering diagramsCash flow chartsMaterial availability details
CPM/PERTGantt chartsMilestone chartsCash flow schedules
© 2008 Prentice Hall, Inc. 3 – 20
Menyatakan tujuan Mendefinisikan Proyek Memecah Struktur
pekerjaan Menentukan
Sumberdaya Membentuk Organisasi
Perencanaan Proyek
© 2008 Prentice Hall, Inc. 3 – 21
Strukturnya sering temporer Menggunakan ahli dari seluruh
perusahaan . Dipimpim Manajer Proyek
Coordinates activities Monitors schedule
and costs
Strukturnya organisasi permanendengan ‘matrix organization’
Mengorganisasi Proyek
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© 2008 Prentice Hall, Inc. 3 – 22
Contoh Organisasi Proyek
TestEngineer
MechanicalEngineer
Project 1 ProjectManager
Technician
Technician
Project 2 ProjectManager
ElectricalEngineer
ComputerEngineer
Marketing FinanceHumanResources Design Quality
Mgt Production
President
Figure 3.2
© 2008 Prentice Hall, Inc. 3 – 23
Organisasi Proyek TerbaikBila:
1. Pekerjaan didefinisikan de tujuanspesifik dan dibatasi waktu.
2. Pekerjaannya unik, relatif unikterhadap organisasi secarakeseluruhan.
3. Pekerjaan berisikan tugas yangbertalian satu dengan lainnya danmembutuhkan skill khusus.
4. Proyek sifatnya temporer terhadaporganisasi.
5. Proyek melintasi garis-garisorganisasi.
© 2008 Prentice Hall, Inc. 3 – 24
Organisasi MatriksMarketing Operations Engineering Finance
Project 1
Project 2
Project 3
Project 4
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© 2008 Prentice Hall, Inc. 3 – 25
The Role ofthe Project Manager
Bertanggungjawab danmemastikan hal berikut.
Semua kegiatan siap sesuai denganurutan dan waktu.
Proyek dan biaya yang d harus disiapkan. Proyek memenuhi tujuan kualitas. Orang yang ditugasi sehingga menerima
motivasi, pengarahan, dan informasi.
© 2008 Prentice Hall, Inc. 3 – 26
The Role ofthe Project Manager
Highly visibleResponsible for making sure that:
Manajer proyek harus:
Pelatih yang baik Komunikator yang Mampu mengorganisir dari
berbagai disiplin ilmu.
© 2008 Prentice Hall, Inc. 3 – 27
Ethical Issues Bid rigging – divulging confidential information
to give some bidders an unfair advantage “Low balling” contractors – try to “buy” the
project by bidding low and hope to renegotiateor cut corners
Bribery – particularly on international projects Expense account padding Use of substandard materials Compromising health and safety standards Withholding needed information Failure to admit project failure at close
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© 2008 Prentice Hall, Inc. 3 – 28
Work Breakdown Structure
Level1. Project2. Major tasks in the project3. Subtasks in the major tasks4. Activities (or work packages)
to be completed
© 2008 Prentice Hall, Inc. 3 – 29
Work Breakdown Structure
Figure 3.3
Level IDLevel Number Activity
1 1.0 Develop/launch Windows Vista OS2 1.1 Develop of GUIs2 1.2 Ensure compatibility with earlier
Windows versions3 1.21 Compatibility with Windows ME3 1.22 Compatibility with Windows XP3 1.23 Compatibility with Windows 20004 1.231 Ensure ability to import files
© 2008 Prentice Hall, Inc. 3 – 30
Project Scheduling
Identifying precedencerelationships
Sequencing activities Determining activity
times & costs Estimating material &
worker requirements Determining critical
activities
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© 2008 Prentice Hall, Inc. 3 – 31
Purposes of ProjectScheduling
1. Shows the relationship of each activity toothers and to the whole project
2. Identifies the precedence relationshipsamong activities
3. Encourages the setting of realistic timeand cost estimates for each activity
4. Helps make better use of people, money,and material resources by identifyingcritical bottlenecks in the project
© 2008 Prentice Hall, Inc. 3 – 32
Scheduling Techniques
1. Ensure that all activities areplanned for
2. Their order of performance isaccounted for
3. The activity time estimates arerecorded
4. The overall project time isdeveloped
© 2008 Prentice Hall, Inc. 3 – 33
Gantt chart Critical Path Method
(CPM) Program Evaluation
and ReviewTechnique (PERT)
Project ManagementTechniques
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A Simple Gantt Chart
TimeJ F M A M J J A S
DesignPrototypeTestReviseProduction
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Passengers
Baggage
Fueling
Cargo and mail
Galley servicing
Lavatory servicingDrinking waterCabin cleaning
Cargo and mail
Flight services
Operating crewBaggagePassengers
DeplaningBaggage claimContainer offloadPumpingEngine injection waterContainer offloadMain cabin doorAft cabin doorAft, center, forwardLoadingFirst-class sectionEconomy sectionContainer/bulk loadingGalley/cabin checkReceive passengersAircraft checkLoadingBoarding
0 10 20 30 40Time, Minutes
Service For A Delta Jet
Figure 3.4
© 2008 Prentice Hall, Inc. 3 – 36
Project Control Reports Detailed cost breakdowns for each task Total program labor curves Cost distribution tables Functional cost and hour summaries Raw materials and expenditure forecasts Variance reports Time analysis reports Work status reports
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© 2008 Prentice Hall, Inc. 3 – 37
Network techniques Developed in 1950’s
CPM by DuPont for chemical plants (1957) PERT by Booz, Allen & Hamilton with the
U.S. Navy, for Polaris missile (1958)
Consider precedence relationships andinterdependencies
Each uses a different estimate ofactivity times
PERT and CPM
© 2008 Prentice Hall, Inc. 3 – 38
Six Steps PERT & CPM
1. Define the project and prepare thework breakdown structure
2. Develop relationships among theactivities - decide which activitiesmust precede and which must followothers
3. Draw the network connecting all ofthe activities
© 2008 Prentice Hall, Inc. 3 – 39
Six Steps PERT & CPM
4. Assign time and/or cost estimatesto each activity
5. Compute the longest time paththrough the network – this is calledthe critical path
6. Use the network to help plan,schedule, monitor, and control theproject
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© 2008 Prentice Hall, Inc. 3 – 40
1. When will the entire project becompleted?
2. What are the critical activities or tasks inthe project?
3. Which are the noncritical activities?4. What is the probability the project will be
completed by a specific date?
Questions PERT & CPMCan Answer
© 2008 Prentice Hall, Inc. 3 – 41
5. Is the project on schedule, behindschedule, or ahead of schedule?
6. Is the money spent equal to, less than, orgreater than the budget?
7. Are there enough resources available tofinish the project on time?
8. If the project must be finished in a shortertime, what is the way to accomplish thisat least cost?
Questions PERT & CPMCan Answer
© 2008 Prentice Hall, Inc. 3 – 42
A Comparison of AON andAOA Network ConventionsActivity on Activity Activity onNode (AON) Meaning Arrow (AOA)
A comes beforeB, which comesbefore C
(a) A B CBA C
A and B must bothbe completedbefore C can start
(b)A
CCB
A
B
B and C cannotbegin until A iscompleted
(c)B
AC
AB
CFigure 3.5
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© 2008 Prentice Hall, Inc. 3 – 43
A Comparison of AON andAOA Network ConventionsActivity on Activity Activity onNode (AON) Meaning Arrow (AOA)
C and D cannotbegin until bothA and B arecompleted
(d)A
B
C
D B
A C
D
C cannot beginuntil both A and Bare completed; Dcannot begin untilB is completed. Adummy activity isintroduced in AOA
(e)CA
B D
Dummy activityA
B
C
D
Figure 3.5
© 2008 Prentice Hall, Inc. 3 – 44
A Comparison of AON andAOA Network ConventionsActivity on Activity Activity onNode (AON) Meaning Arrow (AOA)
B and C cannotbegin until A iscompleted. Dcannot beginuntil both B andC are completed.A dummyactivity is againintroduced inAOA.
(f)A
C
DB A B
C
D
Dummyactivity
Figure 3.5
© 2008 Prentice Hall, Inc. 3 – 45
AON Example
Activity DescriptionImmediate
PredecessorsA Build internal components —B Modify roof and floor —C Construct collection stack AD Pour concrete and install frame A, BE Build high-temperature burner CF Install pollution control system CG Install air pollution device D, EH Inspect and test F, G
Milwaukee Paper Manufacturing'sActivities and Predecessors
Table 3.1
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© 2008 Prentice Hall, Inc. 3 – 46
AON Network forMilwaukee Paper
A
Start
BStartActivity
Activity A(Build Internal Components)
Activity B(Modify Roof and Floor)
Figure 3.6
© 2008 Prentice Hall, Inc. 3 – 47
AON Network forMilwaukee Paper
Figure 3.7
C
D
A
Start
B
Activity A Precedes Activity C
Activities A and BPrecede Activity D
© 2008 Prentice Hall, Inc. 3 – 48
AON Network forMilwaukee Paper
G
E
F
H
CA
Start
DB
Arrows Show PrecedenceRelationships
Figure 3.8
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© 2008 Prentice Hall, Inc. 3 – 49
H(Inspect/
Test)
7DummyActivity
AOA Network forMilwaukee Paper
6
5D
(PourConcrete/
Install Frame)
4C(Construct
Stack)
1
3
2
Figure 3.9
© 2008 Prentice Hall, Inc. 3 – 50
Determining the ProjectSchedule
Perform a Critical Path Analysis The critical path is the longest path
through the network The critical path is the shortest time in
which the project can be completed Any delay in critical path activities
delays the project Critical path activities have no slack
time
© 2008 Prentice Hall, Inc. 3 – 51
Determining the ProjectSchedule
Perform a Critical Path AnalysisActivity Description Time (weeks)
A Build internal components 2B Modify roof and floor 3C Construct collection stack 2D Pour concrete and install frame 4E Build high-temperature burner 4F Install pollution control system 3G Install air pollution device 5H Inspect and test 2
Total Time (weeks) 25Table 3.2
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© 2008 Prentice Hall, Inc. 3 – 52
Determining the ProjectSchedule
Perform a Critical Path Analysis
Table 3.2
Activity Description Time (weeks)A Build internal components 2B Modify roof and floor 3C Construct collection stack 2D Pour concrete and install frame 4E Build high-temperature burner 4F Install pollution control system 3G Install air pollution device 5H Inspect and test 2
Total Time (weeks) 25
Earliest start (ES) = earliest time at which an activity canstart, assuming all predecessors havebeen completed
Earliest finish (EF) = earliest time at which an activity canbe finished
Latest start (LS) = latest time at which an activity canstart so as to not delay the completiontime of the entire project
Latest finish (LF) = latest time by which an activity has tobe finished so as to not delay thecompletion time of the entire project
© 2008 Prentice Hall, Inc. 3 – 53
Determining the ProjectSchedule
Perform a Critical Path Analysis
Figure 3.10
A
Activity Nameor Symbol
EarliestStart ES
EarliestFinishEF
LatestStart
LS LatestFinish
LF
Activity Duration
2
© 2008 Prentice Hall, Inc. 3 – 54
Forward PassBegin at starting event and work forwardEarliest Start Time Rule:
If an activity has only a single immediatepredecessor, its ES equals the EF of thepredecessor
If an activity has multiple immediatepredecessors, its ES is the maximum ofall the EF values of its predecessors
ES = Max {EF of all immediate predecessors}
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© 2008 Prentice Hall, Inc. 3 – 55
Forward PassBegin at starting event and work forwardEarliest Finish Time Rule:
The earliest finish time (EF) of an activityis the sum of its earliest start time (ES)and its activity time
EF = ES + Activity time
© 2008 Prentice Hall, Inc. 3 – 56
ES/EF Network forMilwaukee Paper
Start
0
0
ES
0
EF = ES + Activity time
© 2008 Prentice Hall, Inc. 3 – 57
ES/EF Network forMilwaukee Paper
Start0
0
0
A
2
2
EF of A =ES of A + 2
0
ESof A
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© 2008 Prentice Hall, Inc. 3 – 58
B
3
ES/EF Network forMilwaukee Paper
Start0
0
0
A
2
20
3
EF of B =ES of B + 3
0
ESof B
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C
2
2 4
ES/EF Network forMilwaukee Paper
B
3
0 3
Start0
0
0
A
2
20
© 2008 Prentice Hall, Inc. 3 – 60
C
2
2 4
ES/EF Network forMilwaukee Paper
B
3
0 3
Start0
0
0
A
2
20
D
4
73= Max (2, 3)
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© 2008 Prentice Hall, Inc. 3 – 61
D
4
3 7
C
2
2 4
ES/EF Network forMilwaukee Paper
B
3
0 3
Start0
0
0
A
2
20
© 2008 Prentice Hall, Inc. 3 – 62
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
D
4
3 7
C
2
2 4
ES/EF Network forMilwaukee Paper
B
3
0 3
Start0
0
0
A
2
20
Figure 3.11
© 2008 Prentice Hall, Inc. 3 – 63
Backward PassBegin with the last event and work backwards
Latest Finish Time Rule:
If an activity is an immediate predecessorfor just a single activity, its LF equals theLS of the activity that immediately follows it
If an activity is an immediate predecessorto more than one activity, its LF is theminimum of all LS values of all activitiesthat immediately follow it
LF = Min {LS of all immediate following activities}
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© 2008 Prentice Hall, Inc. 3 – 64
Backward PassBegin with the last event and work backwards
Latest Start Time Rule:
The latest start time (LS) of an activity isthe difference of its latest finish time (LF)and its activity time
LS = LF – Activity time
© 2008 Prentice Hall, Inc. 3 – 65
LS/LF Times forMilwaukee Paper
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
D
4
3 7
C
2
2 4
B
3
0 3
Start0
0
0
A
2
20
LF = EFof Project
1513
LS = LF – Activity time
© 2008 Prentice Hall, Inc. 3 – 66
LS/LF Times forMilwaukee Paper
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
13 15
D
4
3 7
C
2
2 4
B
3
0 3
Start0
0
0
A
2
20
LF = Min(LS offollowing activity)
10 13
23
© 2008 Prentice Hall, Inc. 3 – 67
LS/LF Times forMilwaukee Paper
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
13 15
10 13
8 13
4 8
D
4
3 7
C
2
2 4
B
3
0 3
Start0
0
0
A
2
20
LF = Min(4, 10)
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© 2008 Prentice Hall, Inc. 3 – 68
LS/LF Times forMilwaukee Paper
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
13 15
10 13
8 13
4 8
D
4
3 7
C
2
2 4
B
3
0 3
Start0
0
0
A
2
20
42
84
20
41
00
© 2008 Prentice Hall, Inc. 3 – 69
Computing Slack TimeAfter computing the ES, EF, LS, and LF timesfor all activities, compute the slack or freetime for each activity
Slack is the length of time an activity canbe delayed without delaying the entireproject
Slack = LS – ES or Slack = LF – EF
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© 2008 Prentice Hall, Inc. 3 – 70
Computing Slack TimeEarliest Earliest Latest Latest On
Start Finish Start Finish Slack CriticalActivity ES EF LS LF LS – ES Path
A 0 2 0 2 0 YesB 0 3 1 4 1 NoC 2 4 2 4 0 YesD 3 7 4 8 1 NoE 4 8 4 8 0 YesF 4 7 10 13 6 NoG 8 13 8 13 0 YesH 13 15 13 15 0 Yes
Table 3.3
© 2008 Prentice Hall, Inc. 3 – 71
Critical Path forMilwaukee Paper
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
13 15
10 13
8 13
4 8
D
4
3 7
C
2
2 4
B
3
0 3
Start0
0
0
A
2
20
42
84
20
41
00
© 2008 Prentice Hall, Inc. 3 – 72
ES – EF Gantt Chartfor Milwaukee Paper
A Build internalcomponents
B Modify roof and floorC Construct collection
stackD Pour concrete and
install frameE Build high-
temperature burnerF Install pollution
control systemG Install air pollution
deviceH Inspect and test
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
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© 2008 Prentice Hall, Inc. 3 – 73
LS – LF Gantt Chartfor Milwaukee Paper
A Build internalcomponents
B Modify roof and floorC Construct collection
stackD Pour concrete and
install frameE Build high-
temperature burnerF Install pollution
control systemG Install air pollution
deviceH Inspect and test
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
© 2008 Prentice Hall, Inc. 3 – 74
CPM assumes we know a fixed timeestimate for each activity and thereis no variability in activity times
PERT uses a probability distributionfor activity times to allow forvariability
Variability in Activity Times
© 2008 Prentice Hall, Inc. 3 – 75
Three time estimates are requiredOptimistic time (a) – if everything goes
according to planPessimistic time (b) – assuming very
unfavorable conditionsMost likely time (m) – most realistic
estimate
Variability in Activity Times
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© 2008 Prentice Hall, Inc. 3 – 76
Estimate follows beta distribution
Variability in Activity Times
Expected time:
Variance of times:t = (a + 4m + b)/6
v = [(b – a)/6]2
© 2008 Prentice Hall, Inc. 3 – 77
Estimate follows beta distribution
Variability in Activity Times
Expected time:
Variance of times:t = (a + 4m + b)/6
v = [(b − a)/6]2 Probabilityof 1 in 100 of> b occurring
Probability of1 in 100 of< a occurring
Prob
abili
ty
OptimisticTime (a)
Most LikelyTime (m)
PessimisticTime (b)
ActivityTime
Figure 3.12
© 2008 Prentice Hall, Inc. 3 – 78
Computing VarianceMost Expected
Optimistic Likely Pessimistic Time VarianceActivity a m b t = (a + 4m + b)/6 [(b – a)/6]2
A 1 2 3 2 .11B 2 3 4 3 .11C 1 2 3 2 .11D 2 4 6 4 .44E 1 4 7 4 1.00F 1 2 9 3 1.78G 3 4 11 5 1.78H 1 2 3 2 .11
Table 3.4
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© 2008 Prentice Hall, Inc. 3 – 79
Probability of ProjectCompletion
Project variance is computed bysumming the variances of criticalactivities
2 = Project variance
= (variances of activitieson critical path)
p
© 2008 Prentice Hall, Inc. 3 – 80
Probability of ProjectCompletion
Project variance is computed bysumming the variances of criticalactivitiesProject variance
2 = .11 + .11 + 1.00 + 1.78 + .11 = 3.11
Project standard deviation
p = Project variance
= 3.11 = 1.76 weeks
p
© 2008 Prentice Hall, Inc. 3 – 81
Probability of ProjectCompletion
PERT makes two more assumptions:
Total project completion times follow anormal probability distribution
Activity times are statisticallyindependent
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© 2008 Prentice Hall, Inc. 3 – 82
Probability of ProjectCompletion
Standard deviation = 1.76 weeks
15 Weeks
(Expected Completion Time)Figure 3.13
© 2008 Prentice Hall, Inc. 3 – 83
Probability of ProjectCompletion
What is the probability this project canbe completed on or before the 16 weekdeadline?
Z = – / p
= (16 wks – 15 wks)/1.76
= 0.57
due expected datedate of completion
Where Z is the number ofstandard deviations the duedate or target date lies fromthe mean or expected date
© 2008 Prentice Hall, Inc. 3 – 84
Probability of ProjectCompletion
What is the probability this project canbe completed on or before the 16 weekdeadline?
Z = − / p
= (16 wks − 15 wks)/1.76
= 0.57
due expected datedate of completion
Where Z is the number ofstandard deviations the duedate or target date lies fromthe mean or expected date
.00 .01 .07 .08.1 .50000 .50399 .52790 .53188.2 .53983 .54380 .56749 .57142
.5 .69146 .69497 .71566 .71904
.6 .72575 .72907 .74857 .75175
From Appendix I
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© 2008 Prentice Hall, Inc. 3 – 85
Probability of ProjectCompletion
Time
Probability(T ≤ 16 weeks)is 71.57%
Figure 3.14
0.57 Standard deviations
15 16Weeks Weeks
© 2008 Prentice Hall, Inc. 3 – 86
Determining ProjectCompletion Time
Probabilityof 0.01
Z
Figure 3.15
From Appendix I
Probabilityof 0.99
2.33 Standarddeviations
0 2.33
© 2008 Prentice Hall, Inc. 3 – 87
Variability of CompletionTime for Noncritical Paths Variability of times for activities on
noncritical paths must beconsidered when finding theprobability of finishing in aspecified time
Variation in noncritical activity maycause change in critical path
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© 2008 Prentice Hall, Inc. 3 – 88
What Project ManagementHas Provided So Far
The project’s expected completion timeis 15 weeks
There is a 71.57% chance the equipmentwill be in place by the 16 week deadline
Five activities (A, C, E, G, and H) are onthe critical path
Three activities (B, D, F) are not on thecritical path and have slack time
A detailed schedule is available
© 2008 Prentice Hall, Inc. 3 – 89
Trade-Offs And ProjectCrashing
The project is behind schedule The completion time has been
moved forward
It is not uncommon to face thefollowing situations:
Shortening the duration of theproject is called project crashing
© 2008 Prentice Hall, Inc. 3 – 90
Factors to Consider WhenCrashing A Project
The amount by which an activity iscrashed is, in fact, permissible
Taken together, the shortenedactivity durations will enable us tofinish the project by the due date
The total cost of crashing is as smallas possible
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© 2008 Prentice Hall, Inc. 3 – 91
Steps in Project Crashing
1. Compute the crash cost per time period.If crash costs are linear over time:
Crash costper period =
(Crash cost – Normal cost)(Normal time – Crash time)
2. Using current activity times, find thecritical path and identify the criticalactivities
© 2008 Prentice Hall, Inc. 3 – 92
Steps in Project Crashing3. If there is only one critical path, then
select the activity on this critical paththat (a) can still be crashed, and (b) hasthe smallest crash cost per period. Ifthere is more than one critical path, thenselect one activity from each critical pathsuch that (a) each selected activity canstill be crashed, and (b) the total crashcost of all selected activities is thesmallest. Note that the same activity maybe common to more than one criticalpath.
© 2008 Prentice Hall, Inc. 3 – 93
Steps in Project Crashing
4. Update all activity times. If the desireddue date has been reached, stop. If not,return to Step 2.
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Crashing The Project
Time (Wks) Cost ($) Crash Cost CriticalActivity Normal Crash Normal Crash Per Wk ($) Path?
A 2 1 22,000 22,750 750 YesB 3 1 30,000 34,000 2,000 NoC 2 1 26,000 27,000 1,000 YesD 4 2 48,000 49,000 1,000 NoE 4 2 56,000 58,000 1,000 YesF 3 2 30,000 30,500 500 NoG 5 2 80,000 84,500 1,500 YesH 2 1 16,000 19,000 3,000 Yes
Table 3.5
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Crash and Normal Timesand Costs for Activity B
| | |1 2 3 Time (Weeks)
$34,000 —
$33,000 —
$32,000 —
$31,000 —
$30,000 —
—
ActivityCost Crash
Normal
Crash Time Normal Time
CrashCost
NormalCost
Crash Cost/Wk = Crash Cost – Normal CostNormal Time – Crash Time
= $34,000 – $30,0003 – 1
= = $2,000/Wk$4,0002 Wks
Figure 3.16
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Critical Path And SlackTimes For Milwaukee Paper
Figure 3.17
E
4
F
3
G
5
H
2
4 8 13 15
4
8 13
7
13 15
10 13
8 13
4 8
D
4
3 7
C
2
2 4
B
3
0 3
Start0
0
0
A
2
20
42
84
20
41
00
Slack = 1 Slack = 1
Slack = 0 Slack = 6
Slack = 0
Slack = 0
Slack = 0
Slack = 0
33
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Advantages of PERT/CPM
1. Especially useful when scheduling andcontrolling large projects
2. Straightforward concept and notmathematically complex
3. Graphical networks help highlightrelationships among project activities
4. Critical path and slack time analyses helppinpoint activities that need to be closelywatched
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Advantages of PERT/CPM
5. Project documentation and graphicspoint out who is responsible for variousactivities
6. Applicable to a wide variety of projects7. Useful in monitoring not only schedules
but costs as well
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1. Project activities have to be clearlydefined, independent, and stable in theirrelationships
2. Precedence relationships must bespecified and networked together
3. Time estimates tend to be subjective andare subject to fudging by managers
4. There is an inherent danger of too muchemphasis being placed on the longest, orcritical, path
Limitations of PERT/CPM
34
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Project Management Software
There are several popular packagesfor managing projects Primavera MacProject Pertmaster VisiSchedule Time Line Microsoft Project
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Using Microsoft Project
Program 3.1
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Using Microsoft Project
Program 3.2
35
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Using Microsoft Project
Program 3.3
© 2008 Prentice Hall, Inc. 3 – 104
Using Microsoft Project
Program 3.4
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Using Microsoft Project
Program 3.5
36
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Using Microsoft Project
Program 3.6
© 2008 Prentice Hall, Inc. 3 – 107
Using Microsoft Project
Program 3.7