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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

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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