Project
• “A PROJECT IS A SERIES OF ACTIVITIES
DIRECTED TO ACCOMPLISHMENT OF A
DESIRED OBJECTIVE.”
Plan your work first…..then work your
plan
PM 1 – I’m in charge of the construction of a retail development in the
p
centre of a large town. There are 26 retail units le x
and a super market in
c om
p i n
the complex. My main responsibilitiesg are to co-ordinate the work of
s
the various contractors to ho p
ensure that the project is completed to
specification, within A
budget and on time.
PM 2 – I am directing a team of research scientists. We are running
trials on a new analgesicAdrug on behalf of a pharmaceutical company.
newthe experiments and make sure that
It is my responsibility to design
drugare followed, so that our results
proper scientific and legal procedures
can be subjected to independent statistical analysis.
PM 3- The international aid agency which employs me is sending me to
d e
New Delhi to organize the introduction of multimediauresources
g s t n t s at a
o
teachers’ training college. My role f
is t e a
quite c h in
complex. I have to make
w m e th o d
A ne resources are purchased- and in some cases
sure that appropriate
developed within the college. I also have to encourage the acceptance
of these resources by lecturers and students within the college.
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Project is not defined by the type of outcome it is set up to achieve
Project
.
Characteristic of a project
A UNIQUE, ONE-TIME OPERATIONAL ACTIVITY OR
EFFORT
REQUIRES THE COMPLETION OF A LARGE NUMBER OF
INTERRELATED ACTIVITIES
ESTABLISHED TO ACHIEVE SPECIFIC OBJECTIVE
RESOURCES, SUCH AS TIME AND/OR MONEY, ARE
LIMITED
TYPICALLY HAS ITS OWN MANAGEMENT STRUCTURE
NEED LEADERSHIP
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Examples
– CONSTRUCTING HOUSES, FACTORIES,
SHOPPING MALLS, ATHLETIC STADIUMS OR
ARENAS
– DEVELOPING MILITARY WEAPONS
SYSTEMS, AIRCRAFTS, NEW SHIPS
– LAUNCHING SATELLITE SYSTEMS
– CONSTRUCTING OIL PIPELINES
– DEVELOPING AND IMPLEMENTING NEW
COMPUTER SYSTEMS
– PLANNING CONCERT, FOOTBALL GAMES, OR
BASKETBALL TOURNAMENTS
– INTRODUCING NEW PRODUCTS INTO
MARKET
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Project Planning
• Resource Availability and/or Limits
– DUE DATE, LATE PENALTIES, EARLY
COMPLETION INCENTIVES
– BUDGET
• Activity Information
– IDENTIFY ALL REQUIRED ACTIVITIES
– ESTIMATE THE RESOURCES REQUIRED
(TIME) TO COMPLETE EACH ACTIVITY
– IMMEDIATE PREDECESSOR(S) TO EACH
ACTIVITY NEEDED TO CREATE
INTERRELATIONSHIPS
darla/smbs/vit 5
Project Scheduling and Control Techniques
Gantt Chart
Critical Path Method (CPM)
Program Evaluation and Review Technique (PERT)
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Gantt Chart
Graph or bar chart with a bar for each project activity that shows
passage of time
Provides visual display of project schedule
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History of CPM/PERT
• CRITICAL PATH METHOD (CPM)
– E I DU PONT DE NEMOURS & CO. (1957) FOR
CONSTRUCTION OF NEW CHEMICAL PLANT AND
MAINTENANCE SHUT-DOWN
– REPETITIVE NATURE OF JOBS
– DETEMINISTIC NATURE
• PROJECT EVALUATION AND REVIEW TECHNIQUE
(PERT)
– U S NAVY (1958) FOR THE POLARIS MISSILE PROGRAM
– MULTIPLE TASK TIME ESTIMATES (PROBABILISTIC
NATURE)
– ACTIVITY-ON-ARROW NETWORK CONSTRUCTION
– NON-REPETITIVE JOBS (R & D WORK)
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FOUR BASIC STEPS
• PLANNING:THE PROJECT IS SPLIT INTO
MODULES.THESE MODULES INTO EVENTS &
THESE ARE ASSIGNED TO EACH
DEPARTMENTS.
• SCHEDULING-TIME CHARTS ARE PREAPRED
SHOWING START & STOP OF THE
EVENTS.MOREVER SCHEDULE MUST POINT
OUT TO THE CRITICAL PATH WHICH REQUIRES
MORE ATTENTION.
• RESOULRCE ALLOCATION-PHYSICAL
RESOURCES SUCH AS
LABOUR,EQUIPMENT,TIME & MONEY IS
ALLOCATED.
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• CONTROLLING:THERE SHOULD BE
PROGRESS REPORT OF THE PROJECT IN
TERMS OF TIME & MONEY TO INDCATE
HOW MUCH % OF JOBS ARE COMPLETED.
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Project Network
• NETWORK ANALYSIS IS THE GENERAL NAME GIVEN TO
CERTAIN SPECIFIC TECHNIQUES WHICH CAN BE USED FOR
THE PLANNING, MANAGEMENT AND CONTROL OF
PROJECTS
• USE OF NODES AND ARROWS
ARROWS AN ARROW LEADS FROM TAIL TO HEAD
DIRECTIONALLY
– INDICATE ACTIVITY, A TIME CONSUMING EFFORT THAT IS
REQUIRED TO PERFORM A PART OF THE WORK.
NODES A NODE IS REPRESENTED BY A CIRCLE
- INDICATE EVENT, A POINT IN TIME WHERE ONE OR MORE
ACTIVITIES START AND/OR FINISH.
ACTIVITY
– A TASK OR A CERTAIN AMOUNT OF WORK REQUIRED IN THE
PROJECT
– REQUIRES TIME TO COMPLETE
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– REPRESENTED BY AN ARROW
Project Network
• Event
– Signals the beginning or ending of an activity
– Represented by a circle (node)
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• PRDESSOR ACIVITY:ACTIVITIES MUST BE
COMPLETED PRIOR TO START OF
ANOTHER ACITIVIES.
• SUCCESSOR ACIVITIS:ACIVITES CANNOT
BE STARTED UNTI ALL PREDESSOR
ACIVITES ARE FINISHED.
• DUMMY ACITIVITY:ACTIVITY DOES NOT
CONSUME ANY RESOURCE.
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AOA Project Network for House
3
Lay Dummy
foundation
2 0 Build Finish
3 1 house work
1 2 4 6 7
Design house Order and 3 1
and obtain receive Select 1 1 Select
financing materials paint carpet
5
AON Project Network for House
Lay foundations Build house
2 4
Finish work
2 3
7
Start 1 1
3
Design house and 6
3
obtain financing 5 1
1
1 Select carpet
Order and receive
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Select paint
materials
Situations in network diagram
B
A A must finish before either B or C can start
C
A
C both A and B must finish before C can start
B
A C both A and C must finish before either of
B B or D can start
D
A B
A must finish before B can start
Dummy both A and C must finish before D can start
C darla/smbs/vit 15
D
Concurrent Activities
3
Lay foundation Lay
Dummy
foundation
2 0
2 3
1
Order material 2 4
Order material
(a) Incorrect precedence (b) Correct precedence
relationship relationship
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COMMON ERRORS
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CPM calculation
• Path
– A connected sequence of activities leading from
the starting event to the ending event
• Critical Path
– The longest path (time); determines the project
duration
• Critical Activities
– All of the activities that make up the critical path
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PERT
• PERT is based on the assumption that an activity’s duration
follows a probability distribution instead of being a single value
• Three time estimates are required to compute the parameters of
an activity’s duration distribution:
– pessimistic time (tp ) - the time the activity would take if
things did not go well
– most likely time (tm ) - the consensus best estimate of the
activity’s duration
– optimistic time (to ) - the time the activity would take if
things did go well
Mean (expected time): te =
tp + 4 tm + to
6
2
tp - to
Variance: Vt = =
2
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6
Normal Distribution of Project Time
Probability
Z
= tp x Time
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PROJECT COST
Project Crashing
• CRASHING
– REDUCING PROJECT TIME BY EXPENDING
ADDITIONAL RESOURCES
• CRASH TIME
– AN AMOUNT OF TIME AN ACTIVITY IS REDUCED
• CRASH COST
– COST OF REDUCING ACTIVITY TIME
• GOAL
– REDUCE PROJECT DURATION AT MINIMUM
COST
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Activity crashing
Crash
cost Crashing activity
Activity cost
Slope = crash cost per unit time
Normal Activity
Normal
cost
Normal
time
Crash Activity time
time darla/smbs/vit 23
Time-Cost Relationship
DIRECT COSTS ARE HIRING OF
MEN,MATERIALS,EQUIPEMTS IN ADVANCE BY DOING
BULK PURCHASE OF MATERIAL OR BY CAMPUS
SELECTION CAN BE BECREASED.
INDIRECT COSTS DEPRECIATION,INSURANCE,INTREST
VARIATION.(VARIATION OF CURRENCY)
Min total cost = Total project cost
optimal project
Indirect
time
cost
cost
Time-Cost Tradeoff
Direct cost
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Benefits of CPM/PERT
• USEFUL AT MANY STAGES OF PROJECT
MANAGEMENT
• MATHEMATICALLY SIMPLE
• GIVE CRITICAL PATH AND SLACK TIME
• PROVIDE PROJECT DOCUMENTATION
• USEFUL IN MONITORING COSTS
CPM/PERT can answer the following important
questions:
•How long will the entire project take to be completed? What are the
risks involved?
•Which are the critical activities or tasks in the project which could
delay the entire project if they were not completed on time?
•Is the project on schedule, behind schedule or ahead of schedule?
•If the project has to be finished earlier than planned, what is the best
way to do this at the least cost? darla/smbs/vit 25
Limitations to CPM/PERT
• CLEARLY DEFINED, INDEPENDENT AND STABLE ACTIVITIES
• SPECIFIED PRECEDENCE RELATIONSHIPS
• OVER EMPHASIS ON CRITICAL PATHS
• DETERMINISTIC CPM MODEL
• ACTIVITY TIME ESTIMATES ARE SUBJECTIVE AND DEPEND ON
JUDGMENT
• PERT ASSUMES A BETA DISTRIBUTION FOR THESE TIME
ESTIMATES, BUT THE ACTUAL DISTRIBUTION MAY BE
DIFFERENT
• PERT CONSISTENTLY UNDERESTIMATES THE EXPECTED
PROJECT COMPLETION TIME DUE TO ALTERNATE PATHS
BECOMING CRITICAL
To overcome the limitation, Monte Carlo simulations can be
performed on the network to darla/smbs/vit
eliminate the optimistic bias 26
Computer Software
for Project Management
• Microsoft Project (Microsoft Corp.)
• MacProject (Claris Corp.)
• PowerProject (ASTA Development Inc.)
• Primavera Project Planner (Primavera)
• Project Scheduler (Scitor Corp.)
• Project Workbench (ABT Corp.)
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