heizer om10 ch03
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10/16/2010
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33 Project ManagementProject Management
PowerPoint presentation to accompanyPowerPoint presentation to accompany
3 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall
PowerPoint presentation to accompany PowerPoint presentation to accompany Heizer and Render Heizer and Render Operations Management, 10e Operations Management, 10e Principles of Operations Management, 8ePrinciples of Operations Management, 8e
PowerPoint slides by Jeff Heyl
OutlineOutline
Global Company Profile: Bechtel GroupThe Importance of Project Management
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ManagementProject Planning
The Project ManagerWork Breakdown Structure
Project Scheduling
Outline Outline -- ContinuedContinued
Project ControllingProject Management Techniques: PERT and CPM
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The Framework of PERT and CPMNetwork Diagrams and ApproachesActivity-on-Node ExampleActivity-on-Arrow Example
Outline Outline -- ContinuedContinued
Determining the Project ScheduleForward PassBackward Pass
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Calculating Slack Time and Identifying the Critical Path(s)
Variability in Activity TimesThree Time Estimates in PERTProbability of Project Completion
Outline Outline -- ContinuedContinued
Cost-Time Trade-Offs and Project CrashingA Critique of PERT and CPM
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Using Microsoft Project to Manage Projects
Learning ObjectivesLearning Objectives
1. Use a Gantt chart for scheduling2 D AOA d AON t k
When you complete this chapter you When you complete this chapter you should be able to: should be able to:
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2. Draw AOA and AON networks3. Complete forward and backward
passes for a project4. Determine a critical path
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Learning ObjectivesLearning Objectives
5. Calculate the variance of activity times
When you complete this chapter you When you complete this chapter you should be able to: should be able to:
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activity times6. Crash a project
Bechtel ProjectsBechtel ProjectsBuilding 26 massive distribution centers in just two years for the internet company Webvan Group ($1 billion)Constructing 30 high-security data centers worldwide for Equinix, Inc. ($1.2 billion)
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Building and running a rail line between London and the Channel Tunnel ($4.6 billion)Developing an oil pipeline from the Caspian Sea region to Russia ($850 million)Expanding the Dubai Airport in the UAE ($600 million), and the Miami Airport in Florida ($2 billion)
Bechtel ProjectsBechtel ProjectsBuilding 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
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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)
Strategic Importance ofStrategic Importance ofProject ManagementProject Management
Bechtel Project Management:Iraq war aftermathInternational workforce, construction professionals, cooks, medical personnel,
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professionals, cooks, medical personnel, securityMillions of tons of supplies
Hard Rock Cafe Rockfest Project:100,000 + fansplanning began 9 months in advance
Single unitMany related activitiesDifficult production planning and
Project CharacteristicsProject Characteristics
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Difficult production planning and inventory controlGeneral purpose equipmentHigh labor skills
Examples of ProjectsExamples of Projects
Building Construction
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Research Project
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Management of ProjectsManagement of Projects1. Planning - goal setting, defining the
project, team organization2. Scheduling - relates people, money,
and supplies to specific activities
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pp pand activities to each other
3. Controlling - monitors resources, costs, quality, and budgets; revises plans and shifts resources to meet time and cost demands
PlanningObjectivesResourcesWork break-down structure
SchedulingProject activitiesStart & end timesN t k
Project Management Project Management ActivitiesActivities
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structureOrganization
Network
ControllingMonitor, compare, revise, action
Project Planning, Project Planning, Scheduling, and ControllingScheduling, and Controlling
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Figure 3.1Before Start of project Duringproject Timeline project
Project Planning, Project Planning, Scheduling, and ControllingScheduling, and Controlling
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Figure 3.1Before Start of project Duringproject Timeline project
Project Planning, Project Planning, Scheduling, and ControllingScheduling, and Controlling
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Figure 3.1Before Start of project Duringproject Timeline project
Project Planning, Project Planning, Scheduling, and ControllingScheduling, and Controlling
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Figure 3.1Before Start of project Duringproject Timeline project
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Project Planning, Project Planning, Scheduling, and ControllingScheduling, and Controlling
BudgetsDelayed activities report
Time/cost estimatesBudgetsEngineering diagramsCash flow chartsMaterial availability details
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Figure 3.1Before Start of project Duringproject Timeline project
Slack activities report
CPM/PERTGantt chartsMilestone chartsCash flow schedules
Establishing objectivesDefining projectCreating work b kd t t
Project PlanningProject Planning
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breakdown structure Determining resourcesForming organization
Often temporary structureUses specialists from entire companyHeaded by project manager
C di t ti iti
Project OrganizationProject Organization
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Coordinates activities Monitors scheduleand costs
Permanent structure called ‘matrix organization’
Project OrganizationProject OrganizationWorks Best WhenWorks Best When
1. Work can be defined with a specific goal and deadline
2. The job is unique or somewhat unfamiliar to the existing organization
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3. The work contains complex interrelated tasks requiring specialized skills
4. The project is temporary but critical to the organization
5. The project cuts across organizational lines
A Sample Project A Sample Project OrganizationOrganization
Marketing FinanceHumanResources Design Quality
Mgt Production
President
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TestEngineer
MechanicalEngineer
Project 1 ProjectManager
Technician
Technician
Project 2 ProjectManager
ElectricalEngineer
Computer Engineer
Figure 3.2
Matrix OrganizationMatrix OrganizationMarketing Operations Engineering Finance
Project 1
P j t 2
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Project 2
Project 3
Project 4
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The Role ofThe Role ofthe Project Managerthe Project Manager
Highly visibleHighly visibleResponsible for making sure that:Responsible for making sure that:
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1. All necessary activities are finished in order and on time
2. The project comes in within budget3. The project meets quality goals4. The people assigned to the project receive
motivation, direction, and information
The Role ofThe Role ofthe Project Managerthe Project Manager
Highly visibleHighly visibleResponsible for making sure that:Responsible for making sure that:Project managers should be:
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1. All necessary activities are finished in order and on time
2. The project comes in within budget3. The project meets quality goals4. The people assigned to the project receive
motivation, direction, and information
Good coachesGood communicatorsAble to organize activities from a variety of disciplines
Ethical IssuesEthical IssuesProject managers face many ethical decisions on a daily basisThe Project Management Institute has established an ethical code to deal with problems such as:
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1. Offers of gifts from contractors2. Pressure to alter status reports to mask delays3. False reports for charges of time and expenses4. Pressure to compromise quality to meet
schedules
problems such as:
Work Breakdown StructureWork Breakdown Structure
Level1. Project2 Major tasks in the project
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2. Major tasks in the project3. Subtasks in the major tasks4. Activities (or work packages)
to be completed
Level 3 Develop GUIs Planning Module
Testing1.1.1 1.3.11.2.1
Work Breakdown StructureWork Breakdown Structure
Level 2 Software Design
Project Management
System Testing1.1 1.2 1.3
Level 1 Develop Windows 7 Operating System 1.0
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Level 4 Compatible with Windows ME
Compatible with Windows Vista
Compatible with Windows XP 1.1.2.3
1.1.2.2
1.1.2.1(Work packages)
Ensure Compatibility with Earlier Versions
Cost/Schedule Management
Defect Testing1.2.2 1.3.21.1.2
Figure 3.3
Project SchedulingProject SchedulingIdentifying precedence relationships Sequencing activitiesDetermining activity
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Determining activity times & costsEstimating material & worker requirementsDetermining critical activities
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Purposes of Project Purposes of Project SchedulingScheduling
1. Shows the relationship of each activity to others and to the whole project
2. Identifies the precedence relationships among activities
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among activities3. Encourages the setting of realistic time
and cost estimates for each activity4. Helps make better use of people, money,
and material resources by identifying critical bottlenecks in the project
Scheduling TechniquesScheduling Techniques
1. Ensure that all activities are planned for
2. Their order of performance is accounted for
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accounted for3. The activity time estimates are
recorded4. The overall project time is developed
Gantt chartCritical Path Method (CPM)
Project Management Project Management TechniquesTechniques
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(CPM)Program Evaluation and Review Technique (PERT)
A Simple Gantt ChartA Simple Gantt Chart
TimeJ F M A M J J A S
Design
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es gPrototypeTestReviseProduction
Service For a Delta JetService For a Delta JetPassengers
Baggage
Fueling
Cargo and mail
Galley servicing
Lavatory servicing
DeplaningBaggage claimContainer offloadPumpingEngine injection waterContainer offloadMain cabin doorAft cabin doorAft center for ard
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Figure 3.4
Lavatory servicingDrinking waterCabin cleaning
Cargo and mail
Flight services
Operating crewBaggagePassengers
Aft, center, forwardLoadingFirst-class sectionEconomy sectionContainer/bulk loadingGalley/cabin checkReceive passengersAircraft checkLoadingBoarding
0 10 20 30 40Time, Minutes
Project Control ReportsProject Control ReportsDetailed cost breakdowns for each taskTotal program labor curvesCost distribution tablesFunctional cost and hour summaries
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Functional cost and hour summariesRaw materials and expenditure forecastsVariance reportsTime analysis reportsWork status reports
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Network techniquesDeveloped in 1950’s
CPM by DuPont for chemical plants (1957)PERT by Booz Allen & Hamilton with the
PERT and CPMPERT and CPM
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PERT by Booz, Allen & Hamilton with the U.S. Navy, for Polaris missile (1958)
Consider precedence relationships and interdependenciesEach uses a different estimate of activity times
Six Steps PERT & CPMSix Steps PERT & CPM
1. Define the project and prepare the work breakdown structure
2. Develop relationships among the ti iti d id hi h ti iti
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activities - decide which activities must precede and which must follow others
3. Draw the network connecting all of the activities
Six Steps PERT & CPMSix Steps PERT & CPM
4. Assign time and/or cost estimates to each activity
5. Compute the longest time path th h th t k thi i ll d
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through the network – this is called the critical path
6. Use the network to help plan, schedule, monitor, and control the project
1. When will the entire project be completed?
2 What are the critical activities or tasks in
Questions PERT & CPM Questions PERT & CPM Can AnswerCan Answer
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2. What are the critical activities or tasks in the project?
3. Which are the noncritical activities?4. What is the probability the project will be
completed by a specific date?
5. Is the project on schedule, behind schedule, or ahead of schedule?
6. Is the money spent equal to, less than, or
Questions PERT & CPM Questions PERT & CPM Can AnswerCan Answer
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y p qgreater than the budget?
7. Are there enough resources available to finish the project on time?
8. If the project must be finished in a shorter time, what is the way to accomplish this at least cost?
A Comparison of AON and A Comparison of AON and AOA Network ConventionsAOA Network Conventions
Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)
A comes before B, which comes b f C
(a) A B CBA C
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before C. BA C
A and B must both be completed before C can start.
(b)A
CCB
A
B
B and C cannot begin until A is completed.
(c)B
AC
AB
CFigure 3.5
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A Comparison of AON and A Comparison of AON and AOA Network ConventionsAOA Network Conventions
Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)
C and D cannot begin until both A C A C
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gA and B are completed.
(d)B D B D
C cannot begin until both A and B are completed; D cannot begin until B is completed. A dummy activity is introduced in AOA.
(e)CA
B D
Dummy activityA
B
C
D
Figure 3.5
A Comparison of AON and A Comparison of AON and AOA Network ConventionsAOA Network Conventions
Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)
B and C cannot begin until A is
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begin until A is completed. D cannot begin until both B and C are completed. A dummy activity is again introduced in AOA.
(f)A
C
DB A B
C
D
Dummy activity
Figure 3.5
AON Example AON Example
Activity DescriptionImmediate
PredecessorsA Build internal components —B Modify roof and floor —
Milwaukee Paper Manufacturing'sMilwaukee Paper Manufacturing'sActivities and PredecessorsActivities and Predecessors
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yC 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
Table 3.1
AON Network for AON Network for Milwaukee PaperMilwaukee Paper
A Activity A(Build Internal Components)
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Start
BStart Activity
Activity B(Modify Roof and Floor)
Figure 3.6
AON Network for AON Network for Milwaukee PaperMilwaukee Paper
CA
Activity A Precedes Activity C
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Figure 3.7
D
Start
B
Activities A and B Precede Activity D
AON Network for AON Network for Milwaukee PaperMilwaukee Paper
FCA
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G
EHStart
DB
Arrows Show Precedence Relationships Figure 3.8
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AOA Network for AOA Network for Milwaukee PaperMilwaukee Paper
4C(Construct
Stack)
2
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H(Inspect/
Test)
7Dummy Activity
6
5D
(Pour Concrete/
Install Frame)
1
3
Figure 3.9
Determining the Project Determining the Project ScheduleSchedule
Perform a Critical Path AnalysisPerform a Critical Path AnalysisThe critical path is the longest path through the network
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The critical path is the shortest time in which the project can be completedAny delay in critical path activities delays the projectCritical path activities have no slack time
Determining the Project Determining the Project ScheduleSchedule
Perform a Critical Path AnalysisPerform a Critical Path AnalysisActivity Description Time (weeks)
A Build internal components 2B Modify roof and floor 3
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Table 3.2
B 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
Determining the Project Determining the Project ScheduleSchedule
Perform a Critical Path AnalysisPerform a Critical Path Analysis
Activity Description Time (weeks)A Build internal components 2
Earliest start (ES) = earliest time at which an activity can start, assuming all predecessors have been completed
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Table 3.2
pB 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
been completedEarliest finish (EF) = earliest time at which an activity can
be finishedLatest start (LS) = latest time at which an activity can
start so as to not delay the completion time of the entire project
Latest finish (LF) = latest time by which an activity has to be finished so as to not delay the completion time of the entire project
Determining the Project Determining the Project ScheduleSchedule
Perform a Critical Path AnalysisPerform a Critical Path Analysis
A
Activity Name or Symbol
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Figure 3.10
AEarliest Start ES
Earliest FinishEF
Latest Start
LS Latest Finish
LF
Activity Duration
2
Forward PassForward Pass
Begin at starting event and work forwardBegin at starting event and work forwardEarliest Start Time Rule:
If an activity has only a single immediate d it ES l th EF f th
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predecessor, its ES equals the EF of the predecessorIf an activity has multiple immediate predecessors, its ES is the maximum of all the EF values of its predecessors
ES = Max {EF of all immediate predecessors}
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Forward PassForward Pass
Begin at starting event and work forwardBegin at starting event and work forwardEarliest Finish Time Rule:
The earliest finish time (EF) of an activity i th f it li t t t ti (ES)
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is the sum of its earliest start time (ES) and its activity time
EF = ES + Activity time
ES/EF Network for ES/EF Network for Milwaukee PaperMilwaukee Paper
Start0
ES
0
EF = ES + Activity time
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0
0 0
ES/EF Network for ES/EF Network for Milwaukee PaperMilwaukee Paper
A2
EF of A = ES of A + 2
0
ESof A
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Start0
0
0
2
20
ES/EF Network for ES/EF Network for Milwaukee PaperMilwaukee Paper
A
2
20
EF of B = ES of B + 3ES
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B
3
Start0
0
0
3
ES of B + 3
0
of B
C
2
2 4
ES/EF Network for ES/EF Network for Milwaukee PaperMilwaukee Paper
A
2
20
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B
3
0 3
Start0
0
0
C
2
2 4
ES/EF Network for ES/EF Network for Milwaukee PaperMilwaukee Paper
A
2
20
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B
3
0 3
Start0
0
0D
4
73= Max (2, 3)
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C
2
2 4
ES/EF Network for ES/EF Network for Milwaukee PaperMilwaukee Paper
A
2
20
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D
4
3 7B
3
0 3
Start0
0
0
F
3
4 7C
2
2 4
ES/EF Network for ES/EF Network for Milwaukee PaperMilwaukee Paper
A
2
20
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E
4
G
5
H
2
4 8 13 15
8 13D
4
3 7B
3
0 3
Start0
0
0
Figure 3.11
Backward PassBackward Pass
Begin with the last event and work backwardsBegin with the last event and work backwards
Latest Finish Time Rule:
If an activity is an immediate predecessor f j t i l ti it it LF l th
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for just a single activity, its LF equals the LS of the activity that immediately follows itIf an activity is an immediate predecessor to more than one activity, its LF is the minimum of all LS values of all activities that immediately follow it
LF = Min {LS of all immediate following activities}
Backward PassBackward Pass
Begin with the last event and work backwardsBegin with the last event and work backwards
Latest Start Time Rule:
The latest start time (LS) of an activity is th diff f it l t t fi i h ti (LF)
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the difference of its latest finish time (LF) and its activity time
LS = LF – Activity time
LS/LF Times for LS/LF Times for Milwaukee PaperMilwaukee Paper
F
3
4 7C
2
2 4A
2
20
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E
4
G
5
H
2
4 8 13 15
8 13D
4
3 7B
3
0 3
Start0
0
0
LF = EF of Project
1513
LS = LF – Activity time
LS/LF Times for LS/LF Times for Milwaukee PaperMilwaukee Paper
F
3
4 7C
2
2 4A
2
20
10 13
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E
4
G
5
H
2
4 8 13 15
8 13
13 15
D
4
3 7B
3
0 3
Start0
0
0 LF = Min(LS of following activity)
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LS/LF Times for LS/LF Times for Milwaukee PaperMilwaukee Paper
F
3
4 7
10 13
C
2
2 4A
2
20
LF = Min(4, 10)
42
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E
4
G
5
H
2
4 8 13 15
8 13
13 15
8 13
4 8
D
4
3 7B
3
0 3
Start0
0
0
LS/LF Times for LS/LF Times for Milwaukee PaperMilwaukee Paper
F
3
4 7
10 13
C
2
2 4A
2
20
4220
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E
4
G
5
H
2
4 8 13 15
8 13
13 15
8 13
4 8
D
4
3 7B
3
0 3
Start0
0
0
8441
00
Computing Slack TimeComputing Slack Time
After computing the ES, EF, LS, and LF times for all activities, compute the slack or free time for each activity
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Slack is the length of time an activity can be delayed without delaying the entire project
Slack = LS – ES or Slack = LF – EF
Computing Slack TimeComputing Slack Time
Earliest Earliest Latest Latest OnStart Finish Start Finish Slack Critical
Activity ES EF LS LF LS – ES Path
A 0 2 0 2 0 YesB 0 3 1 4 1 No
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Table 3.3
C 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
Critical Path for Critical Path for Milwaukee PaperMilwaukee Paper
F
3
4 7
10 13
C
2
2 4A
2
20
4220
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E
4
G
5
H
2
4 8 13 15
8 13
13 15
8 13
4 8
D
4
3 7B
3
0 3
Start0
0
0
8441
00
ES ES –– EF Gantt ChartEF Gantt Chartfor Milwaukee Paperfor Milwaukee Paper
A Build internal components
B Modify roof and floorC Construct collection
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
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C Construct collection stack
D Pour concrete and install frame
E Build high-temperature burner
F Install pollution control system
G Install air pollution device
H Inspect and test
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LS LS –– LF Gantt ChartLF Gantt Chartfor Milwaukee Paperfor Milwaukee Paper
A Build internal components
B Modify roof and floorC Construct collection
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
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C Construct collection stack
D Pour concrete and install frame
E Build high-temperature burner
F Install pollution control system
G Install air pollution device
H Inspect and test
CPM assumes we know a fixed time estimate for each activity and there is no variability in activity times
Variability in Activity TimesVariability in Activity Times
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PERT uses a probability distribution for activity times to allow for variability
Three time estimates are requiredOptimistic time (a) – if everything goes according to plan
Variability in Activity TimesVariability in Activity Times
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g g pPessimistic time (b) – assuming very unfavorable conditionsMost likely time (m) – most realistic estimate
Estimate follows beta distributionEstimate follows beta distribution
Variability in Activity TimesVariability in Activity Times
Expected time:
V i f tit = (a + 4m + b)/6
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Variance of times: v = [(b – a)/6]2
Estimate follows beta distributionEstimate follows beta distribution
Variability in Activity TimesVariability in Activity Times
Expected time: Expected time:
V i f tiV i f tit = t = ((a + a + 44mm + + bb)/6)/6
Figure 3.12
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Variance of times: Variance of times: v = v = [([(b b − − aa)/6]2)/6]2 Probability
of 1 in 100 of > b occurring
Probability of 1 in 100 of < a occurring
Prob
abili
ty
Optimistic Time (a)
Most Likely Time (m)
Pessimistic Time (b)
Activity Time
Computing VarianceComputing Variance
Most ExpectedOptimistic Likely Pessimistic Time Variance
Activity a m b t = (a + 4m + b)/6 [(b – a)/6]2
A 1 2 3 2 .11B 2 3 4 3 .11
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Table 3.4
C 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
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Probability of Project Probability of Project CompletionCompletion
Project variance is computed by Project variance is computed by summing the variances of critical summing the variances of critical activitiesactivities
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σ2 = Project variance
= ∑(variances of activities on critical path)
p
Probability of Project Probability of Project CompletionCompletion
Project variance is computed by Project variance is computed by summing the variances of critical summing the variances of critical activitiesactivitiesProject varianceσ2 = 11 + 11 + 1 00 + 1 78 + 11 = 3 11
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σ2 = .11 + .11 + 1.00 + 1.78 + .11 = 3.11
Project standard deviationσp = Project variance
= 3.11 = 1.76 weeks
p
Probability of Project Probability of Project CompletionCompletion
PERT makes two more assumptions:PERT makes two more assumptions:
Total project completion times follow a
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Total project completion times follow a normal probability distributionActivity times are statistically independent
Probability of Project Probability of Project CompletionCompletion
Standard deviation = 1.76 weeks
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15 Weeks
(Expected Completion Time)Figure 3.13
Probability of Project Probability of Project CompletionCompletion
What is the probability this project can What is the probability this project can be completed on or before the 16 week be completed on or before the 16 week deadline?deadline?
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Z= – /σp
= (16 wks – 15 wks)/1.76
= 0.57
due expected datedate of completion
Where Z is the number of standard deviations the due date or target date lies from the mean or expected date
Probability of Project Probability of Project CompletionCompletion
What is the probability this project can What is the probability this project can be completed on or before the 16 week be completed on or before the 16 week deadline?deadline?
.00 .01 .07 .08.1 .50000 .50399 .52790 .53188.2 .53983 .54380 .56749 .57142
From Appendix I
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Z= − /σp
= (16 wks − 15 wks)/1.76
= 0.57
due expected datedate of completion
Where Z is the number of standard deviations the due date or target date lies from the mean or expected date
.5 .69146 .69497 .71566 .71904
.6 .72575 .72907 .74857 .75175
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Probability of Project Probability of Project CompletionCompletion
Probability(T ≤ 16 weeks)is 71.57%
0.57 Standard deviations
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Time
Figure 3.14
15 16Weeks Weeks
Determining Project Determining Project Completion TimeCompletion Time
Probability
Probability of 0.99
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Probability of 0.01
Z
Figure 3.15
From Appendix I2.33 Standard
deviations0 2.33
Variability of Completion Variability of Completion Time for Noncritical PathsTime for Noncritical Paths
Variability of times for activities on noncritical paths must be considered when finding the
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considered when finding the probability of finishing in a specified timeVariation in noncritical activity may cause change in critical path
What Project Management What Project Management Has Provided So FarHas Provided So Far
1. The project’s expected completion time is 15 weeks
2. There is a 71.57% chance the equipment will be in place by the 16 week deadline
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will be in place by the 16 week deadline3. Five activities (A, C, E, G, and H) are on
the critical path4. Three activities (B, D, F) are not on the
critical path and have slack time 5. A detailed schedule is available
TradeTrade--Offs and Project Offs and Project CrashingCrashing
The project is behind schedule
It is not uncommon to face the It is not uncommon to face the following situations:following situations:
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The project is behind scheduleThe completion time has been moved forward
Shortening the duration of the project is called project crashing
Factors to Consider When Factors to Consider When Crashing a ProjectCrashing a Project
The amount by which an activity is crashed is, in fact, permissible
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Taken together, the shortened activity durations will enable us to finish the project by the due dateThe total cost of crashing is as small as possible
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Steps in Project CrashingSteps in Project Crashing
1. Compute the crash cost per time period. If crash costs are linear over time:
Crash cost (Crash cost – Normal cost)
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Crash costper period = (Normal time – Crash time)
2. Using current activity times, find the critical path and identify the critical activities
Steps in Project CrashingSteps in Project Crashing3. If there is only one critical path, then
select the activity on this critical path that (a) can still be crashed, and (b) has the smallest crash cost per period. If there is more than one critical path, then
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there is more than one critical path, then select one activity from each critical path such that (a) each selected activity can still be crashed, and (b) the total crash cost of all selected activities is the smallest. Note that the same activity may be common to more than one critical path.
Steps in Project CrashingSteps in Project Crashing
4. Update all activity times. If the desired due date has been reached, stop. If not, return to Step 2.
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Crashing The ProjectCrashing The ProjectTime (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 No
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Table 3.5
C 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
Crash and Normal Times Crash and Normal Times and Costs for Activity Band Costs for Activity B
$34,000 —
$33,000 —
Activity Cost Crash
Crash C t
Crash Cost/Wk = Crash Cost – Normal CostNormal Time – Crash Time
= $34,000 – $30,000
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| | |1 2 3 Time (Weeks)
$32,000 —
$31,000 —
$30,000 —
—Normal
Crash Time Normal Time
Cost
Normal Cost
= 3 – 1
= = $2,000/Wk$4,0002 Wks
Figure 3.16
Critical Path and Slack Times Critical Path and Slack Times for Milwaukee Paperfor Milwaukee Paper
F
3
4 7
10 13
C
2
2 4A
2
20
4220
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Figure 3.17
E
4
G
5
H
2
4 8 13 15
8 13
13 15
8 13
4 8
D
4
3 7B
3
0 3
Start0
0
0
8441
00
Slack = 1 Slack = 1
Slack = 0 Slack = 6
Slack = 0
Slack = 0
Slack = 0
Slack = 0
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Advantages of PERT/CPMAdvantages of PERT/CPM
1. Especially useful when scheduling and controlling large projects
2. Straightforward concept and not mathematically complex
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3. Graphical networks help highlight relationships among project activities
4. Critical path and slack time analyses help pinpoint activities that need to be closely watched
Advantages of PERT/CPMAdvantages of PERT/CPM
5. Project documentation and graphics point out who is responsible for various activities
6. Applicable to a wide variety of projects
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pp y p j7. Useful in monitoring not only schedules
but costs as well
1. Project activities have to be clearly defined, independent, and stable in their relationships
2. Precedence relationships must be specified and networked together
Limitations of PERT/CPMLimitations of PERT/CPM
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specified and networked together3. Time estimates tend to be subjective and
are subject to fudging by managers4. There is an inherent danger of too much
emphasis being placed on the longest, or critical, path
Project Management SoftwareProject Management Software
There are several popular packages for managing projects
Primavera M P j t
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MacProjectPertmasterVisiScheduleTime LineMicrosoft Project
Using Microsoft ProjectUsing Microsoft Project
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Program 3.1
Using Microsoft ProjectUsing Microsoft Project
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Program 3.2
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Using Microsoft ProjectUsing Microsoft Project
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Program 3.3
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