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College of Technology London
AssignmentOn
Course Code:
Course Title:
Programme: Term: Date:
Submitted By: Submitted To: Name: Mr. Dinesh Poudel Name: Jaishree Chaturvedi
ID. No: 093593-82 Lecturer
1
Project Management
2DBA0310
Project plan for setting up Bakery Cafe.
PGDBA III 22 / 8/ 2010
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Table Contents
No. Title/Subtitles Page. No.
1 Title 3
2 Introduction 3
3 Literature Review
Project ManagementProject Life Cycle
Project Planning
3,4,5,
4 Project Risk Management
Risk Identification
Risk Evaluation
Risk Response Planning
5,6,
5 Definition of Project 6
6 Project Costing and Budgeting6,7
7 Project Scheduling
Work Breakdown Structure
Activity-ON-Arrow Networks
Forward Pass Calculation
Backward pass calculation
Critical Path
7,8,9,10,11
8 PERT (Program Evaluation Review Technique 11
9 Resource Constrained Scheduling 12
10 Project Crashing 12
11 Critical Evaluation of the developed project plan 12
12 Conclusion: 12
13 References 13
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1. Title: Project plan for opening of Bakery Cafe.
2. Introduction:
According to PMBOK Project management is the application of knowledge, skills, tools and
techniques to project activities in order to meet stakeholders needs and expectations from a
project. Here the word project can be defined as the effort taken to accomplish a task
(unique) by effective utilisation of resources available where resources can be in terms ofhumans or machines, raw materials or funds. Beside resources project also involves
accomplishing given specified task qualitatively and quantitatively depending upon the nature
of project within the budget and time allotted. So it can be said that project is anything that has
well defined objective where objective is generally defined in terms of scope, schedule and
cost. Here project scope refers to the accomplishing the task as per the terms and conditions
set and agreed upon and these scopes are clearly stated in any project before carrying out.
Similarly cost is the amount, funds or budget estimated in order to accomplish the task. For
instance, objective of any project can be constructing of road within six months, within the
budget of 100,000 and the road should according to the standards as specified. The
characteristics of the project can be high lightened as follows:
a. Project is something that has well defined objective.
b. Project includes utilization of various resources.
c. A project has specified duration. It has start time and objective accomplish time.
d. Project might be unique or one time venture. A unique in the sense that they are
never been attempted and one-time venture in the sense that they were previously done
but customizable.
e. The project has stake holders and project should be accomplished in such a way that it
must satisfy the stakeholder.
f. Since project is planned on the basis of certain assumptions and estimations, project
involves degree of uncertainty.
3. Project Management:
As project involves various key factor that needs regular monitoring and guidance or effective
management. Without proper management the goal set or objective cannot be met. Proper
management of project is essential to accomplish and meet the desired objective within
allotted budget and time. So project management can be defined as the process of developing
of plan and procedure to achieve the objective set within the allotted time and cost through
effective utilisation of available resources. It is the process of applying various management
tools and techniques to meet the target and maintain the progress of the overall project as it
passes through various phases of lifecycle.
History of project management can be traced out from the ancient period with theconstruction of Great Wall of China and massive pyramids of Egypt. Though there are no any
documents to prove this however archaeologist started to suggest that they were not just built
as history says but were planned effectively, paid wages to the workforce associated.
However modern project management came into practise with the development of Gantt chart
or bar chart by Henry Gantt in early 19th century followed by Henry Fayals (French
Industrialists) development of management principal in 1916. Since then it was between 1950
and 1960 most of the project management techniques used today were developed.
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3. Project schedule and Budgeting: Project schedule is the step in planning process which
involves the creating the list of tasks to be carried out for each deliverables. It involves the
process of identifying of the amount of resources and time required to complete the project
and also helps to allocate the best possible resources. It is the process to determine whether
the project can be accomplished within the allotted time, budget and resources. Network
diagrams and critical path analysis are useful tools to develop schedule.
4. Supporting Plans: Project planning also involves other supporting plans such as humanresource plan, risk management plan and communication plan.
5. Risk Management:
Since project is planned on the basis of certain assumptions and estimations, project
involves degree of uncertainty and these uncertainties can be termed as risk. A risk for a
project can be defined as any happening or restriction which prevents the project from
achieving or accomplishing the goal. Risk is the threat to the project and often seizes the
opportunities of the project. Since risk is associated with the entire project and if planned
ahead it can be minimised and controlled. During the progress of the project some risk
disappear, some develop into problem and needs attention however some cannot be
controlled and destroys the project. So project manager should identify and deal with the
risk before it destroys the project. The best way to deal with the risk is through the process
of risk management. Risk management is structured approach to manage risk. It involves
identifying assessing and responding to the aroused risk in the project. It also helps to
minimize the probability of risk likelihood or consequences to acceptable level in cost-
effective way. Risk management helps to address the risk proactively rather than waiting
for unfavourable events to happen. Risk management is one of the steps included in the
project planning.
6. Risk Management Process:
Risk management process involves following steps:a. Risk identification: the first step involved in the managing risk is the identification of
risk. There are several approaches to identify the risk. One is brainstorming. It is the
process where all the projects team member sit together and share their individual
experience and expertise to identify the possible risk within the project. Another means of
identifying risk is going through the historical information of related project or sometimes
referring to the expert having track record with the associated project. Finally each risk
identified is listed down along with the potential consequences.
b. Risk Assessment: Once all risks have been identified, the next process involves the
process of risk assessment. It is the process of determining the probability of risk occurring
from the identified risk and their impact on the project objective. Since all the riskidentified will not have impact on the project only those with impact is given priority.
Potential risk can be categorized as high, medium or low and assessed accordingly and
those with highest likelihood of occurrence is given more attention first and response plan
is developed. Risk assessment matrix is a useful tool for assessing risk. It is also known as
probability and impact matrix as it shows the probability of risk occurring against the
impact on the project. It helps managers to visualise the project risks in terms of theirseverity or impact on the project prioritising which risks to address and which to ignore.
This matrix gives nine possibilities categorized as high, low and medium. Those risks with
high probability and high impact will be dealt first and so on.
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Figure: Risk Assessment Matrix
c. Risk Response Planning:
This is the third step involved in the process of managing risk. Once the identified risks are
prioritized risk response plan is developed. Risk response planning involves the processdeveloping an action plan to reduce the impact or likelihood of each risk and procedures of
implementation of the actions to address each risk. It should include a warning signal for
when to implement the action plan for each risk. A risk response plan can be to eliminate
the risk, mitigate the risk, deflect the risk or accept the risk. Eliminating risks refers to the
avoiding the risk completely either by removing the cause or by integrating different
course of action. Mitigating risk refers to the initiative taken to reduce the risks
probability and impact. Deflecting risk can be transferring the risk to third party.
Insurance of the business is the good example of deflecting risk. Finally accepting the risk
refers to the reacting to the risk as and when its consequences are high through the means
of developing the contingency plan where contingency plan is the predefined set of plan
which is implemented if the risk probability is high.
7. Definition of my project:
My project is based on opening of small retail bakery shop in London. I have chosen to
open the bakery shop because of the popularity of the growth of this type of business. This
type of business can also be done through the home. Since my project is related to bakery
shop the scope of the project will be to produce the bakery products.
8. Project Costing and Budget:
Project costing refers to the planning of distribution of funds. It is a plan which shows how,
when and where the funds will be spent over the duration of the project. Project costingand budgeting planning is started with the development of the proposal of the project. For
any project cost may related to the labour, materials, equipment, overhead costs, general
and administrative overhead costs etc. Cost estimates should be aggressive. It should not
be overly conservative or overly optimistic. Similarly budgeting is the process of allocating
total project cost of the various elements associated with the project such as labour,
materials, equipments etc. The figure below shows the simple cost estimate of the setting
up of bakery shop.
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Activity Labour cost
()
Materials
cost ()
Equipment cost
()
Other cost () Total ()
Planning 3000 500 - 5000 8500
Registration - 5000 - 2000 7000
Pre Opening
Activities
10000 15000 25000 5000 55000
Promotion 10000 5000 10000 25000
Total
()
23000 25500 25000 22000 95500
Figure: Bakery Project cost estimate
9. Project Scheduling:
a. Work based structure (WBS):
Work based structure is the key tool of project planning. It is the process of listing
down of all the activities as well as subdividing all the activities that are to be carried
out in order to accomplish the project. Subdividing the activities makes the projectcontrollable and manageable. By dividing the activities it will be easier to estimate plan
and accomplish the project without leaving any task undone. It is a useful tool to break
down the complexity into simple.WBS reflects the clear picture of various activities to
be accomplished in suitable order. It sets the road map of the project showing which
activities to start first and so on. WBS can be presented structurally or through text
incidents depending upon the size and scope of the project.
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Figure: WBS structure of bakery project
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b. Network Diagrams:
Network diagrams are also considered to be the key tools of project planning. Network
diagrams can be either Activity in the box (AIB) or Activity on the Arrow or Nod.
1. Activity on the Arrow or Nod
This format includes following process: Activity is represented by an arrow
Description of activity is written above the arrow.
One arrow is used to represent one activity.
Activities are linked by circles called events
Each event is assigned a unique number.
The event on the beginning of the activity is known as predecessor event
and one at the end is known as successor event.
2. Activity in the box (AIB)
This format includes following process:
An activity is represented by box.
Description of the activities is written within the box.
One box represents one single activity.
Each box will be given a unique activity number
Activities are linked by arrows and linking arrows shows the precedential
relationships meaning arrow linking activities must be finished first.
c. Use of network diagram in setting up bakery shop project:
ACTIVITYNUMBER
ACTIVITYDESCRIPTION
DEPENDENCY
TIMEDAYS
A Market Research -------- 20
B Finalise Location A 10
C Draft Proposal B 7D Financing Sources B 10
E License B 7
F Insurance C 4
G Bank Account D 4
H Menu E 7
I Purchasing Equipment F 7
J Decoration G 20
K Advertisement H 26
L Installation I 10
M Recruitment J 10
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Figure: AOA diagram for bakery shop
d. Calculation of Earliest Event Time (EET), Latest Event Time (LET), Float and
Critical path.
a. Earliest Event Time (EET):
It is the earliest possible finish and the earliest time at which any activity can start.
Forward pass is conducted to calculate the EET. Highest EET is the last activity. EET is
calculated by adding the duration i.e EET=EET (at the start) +duration.
b. Latest Event Time (LET): It is the latest start time and latest time at which activitieshave been completed. Backward pass is conducted to calculate LET. LET is calculated by
subtracting the duration i.e LET=LET(at the end)-duration.
c. Float:Float is referred to the measure of flexibility. It reflects how many working daysthe activities can be delayed or extended without affecting the overall project. It is also
called as slack. It is calculated by subtracting earliest event time from as the latest event
time i.e float = LET EET.
d. Critical Path: Critical path is the referred to the series of activities that must be
completed on time in order to complete the project in time. It is the longest duration path.
If an activity on the critical path is delayed by one day, then entire project will be delayed
by one day (unless another activity on the critical path can be accelerated by one day).
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Figure: AOA network diagram showing EET, LET, FLOAT and CRITICAL path.
Calculations of EET, LET, FLOAT and CRITICAL path in the figure.
1. Earliest Event Time (EET):
1. Activities A, B, C, F, I, L total pass calculations are 58.
2. Activities A, B, D, G, J, M total pass calculation is 74.
3. Activities A, B, E, H, K total pass calculation is 70
2. Latest Event Time (LET):
1. Activity L, I, F, C, A, B total start is 58 and finish on 00.
2. Activity M, J, G, D, B, A total start is 74 and finish on 00.
3. Activity K, H, E, B and A start total is 70 and finish on 00.
3. Critical Path:
Since the longest duration of project is 74 days, the projects critical path is M, J, G, D, B, A.
10. Program Evaluation and Review Technique (PERT):PERT stands for Program Evaluation and Review Technique. It is a useful project
management tool used for scheduling, organising and coordinating tasks in a project. PERT
was developed by a US Navy in 1950 in order to manage the work force related to Polaris
Submarine Missile System. However CPM technique was also developed at the same time.
With the success of Polaris Submarine Missile System project PERT technique became more
popular and still today along with CPM it is widely used to control and plan the project.
Unlike CPM, PERT is also diagrammatical representation of the sequence of activities linked
by arrows or node representing activities and events respectively.
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11. Resource Smoothing:
Resource smoothing is the process which determines the resource necessities so that they will
be accessible at the right time. It helps in the smoothing of available resources.
12. Project Crashing:Project crashing is the reducing of project duration without affecting the scope of the project
is called project crashing. It is the process of accomplishing of the task by reducing the actual
duration allotted however it requires allotting of more resources. Crashing should be done
after careful investigation of the project and recommended during initial phase of the project.
13. Critical Evaluation of the developed Project Plan:
My project is based on the setting up of a new bakery shop. The plan is based on effective
utilisation of project management tools such as project planning, Gantt chart, WBS, network
diagrams. The project is planned through the market research and location selected is based
on the customer needs and wants.
14. Conclusions:
Project refers to the sequence of associated jobs or tasks focused on the completion of an
overall objective whereas project management refers to planning, directing, and controlling of
resources in order accomplish the project. The success of project depends upon how well it is
planned and how effectively the project management tools have been utilized. Project
management not only plans the project but also helps to manage the risk associated in the
project through the use of various management techniques. My project is based on the
opening of Bakery Shop and I have developed the project applying project management tools
and theories.
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References:
Tutor slides
Rory Burke (2004). Project Management Planning and Control Techniques. 4th ed.Singapore: John Wiley & Sons(Asia) Pte Ltd.
Clements/Gido (2004).Effective Project Management. 3rd ed. United States: South- western
CENGAGE Learning.
Gido/ Clements (1999). Successful Project Management. United States: South Western
College Publishing An International Thomson Publishing Company.
http://nurunnajjah.wordpress.com/[18 August 2010]
http://www.projectsmart.co.uk/project-planning-step-by-step.html [18 August 2010]
http://www.pathways.cu.edu.eg/subpages/downloads/Risk_Chapter_1.pdf[17 August 2010]
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http://nurunnajjah.wordpress.com/http://www.projectsmart.co.uk/project-planning-step-by-step.htmlhttp://www.pathways.cu.edu.eg/subpages/downloads/Risk_Chapter_1.pdfhttp://nurunnajjah.wordpress.com/http://www.projectsmart.co.uk/project-planning-step-by-step.htmlhttp://www.pathways.cu.edu.eg/subpages/downloads/Risk_Chapter_1.pdf