485 33 powerpoint-slides ch-7
TRANSCRIPT
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Oxford University Press 2013. All rights reserved. Oxford University Press 2013. All rights reserved.
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8/12/2019 485 33 Powerpoint-slides Ch-7
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Oxford University Press 2013. All rights reserved.
A project can be considered to be the
achievement of a specific objective which
involves a series of activities and tasks which
consume resources. Project managementis defined as The
planning, monitoring and control of all
aspects of a project and the motivation of
all those involved in it to achieve the projectobjectives on time and to the specified cost,
quality, and performance.
Definitions
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Projects by size
1. Major Projects
2. Large Projects
3. Medium Projects
4. Small Projects
Types of Projects
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Type 2
Projects
Product
Development
(Water)Type 1
Projects
Engineering
(Earth)
Type 4
Projects
Research &
Organizational
Change
(Air)Type 3
Projects
Systems
Development
(Fire)
Methods
Well
Defined
Goals Well Defined
Yes
Yes
No
No
Greater
chance ofsuccess
Greater
chance of
failure
Turner & Cochranes Goals & Methods Matrix
Projects by Resource Type
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Construction of the warehouse (a Type 1 building project) Creation of the establishment to run the warehouse
(a Type 2 logistics project)
Writing of the computer systems to operate the warehouse
(a Type 3 IS project)
Redeployment & training of people (a Type 4 personnel project)
Changing the buying function from hospital to region
(a Type 4 organizational change project)
Changing the budget from hospital based to region based
(Type 3, systems project) Implementing in 15 hospitals (Type 4 organizational change project)
Commissioning the warehouse (Type 2 logistics project)
Projects by Resource Type
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Role of Project Management in Other Functional Areas
of Management
Project
Management
Information Systems Management
A project of designing new software.
A project of creating a computer
network in an organization.
A project of implementing software in
an organization.
Human Resources Management
A project of recruiting more
employees in a department.
A project of training a group of
employees in a particular skill.A project of designing a new salary
structure of employees
Marketing Management
A project of launching a new
product in a region.
A project of designing the
promotion campaign of a product.
A marketing research project.
Financial Management
A project of designing a newfinancial instrument.
A project of launching a new
financial instrument in a region.
A project of reviving an old
financial instrument in a region.
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The projects in which the time duration ofvarious activities can be determined up togreat accuracy are the ones which can be
planned with the help of a technique calledthe Critical Path Method (CPM).
Programme Evaluation & Review Technique
(PERT)is applied in projects where the timedurations of various activities are not known.This is especially suitable for Research andDevelopment (R&D) projects.
CPM and PERT
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1
2
3
4
5
6
7 8
A18[0,18]
[0,18]
B3[0,3]
[17,20]D4[7,11]
[20,24]
C1[0,1]
[13,14]
E6[1,7]
[14,20]
F8[1,9]
[16,24]
G6[1,7]
[14,20]
I5[18,23]
[19,24]
J22[18,40]
[18,40]
K7[23,30][24,31]
H11[7,18]
[20,31]
L9[30,39]
[31,40]
M5[40,45]
[40,45]
9
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Time (days)
Total Available Time
Total Float
(15 days)
Performance Time
(8 days)
LF
LS
Total Float
(15 days)
EF
ES
Performance Time
(8 days)
Activity F
Activity F
Activity F Partial TF
(10 days)
Partial TF
(5 days)
Case 1
Case 2
Case 3
5 10 15 20 25
1 24
0
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Time (days)
Free Float
(14 days)
Performance Time
(8 days)
Performance Time
(8 days)
Activity F
Activity F
Case 1
Case 2
5 10 15 20 25
1 24
0
Activity K
If Float
(Head Slack)
Free Float
(14 days)
If Float
(Head Slack)
Activity K
ES=23
LS=24
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Time (days)
Available Time
Performance Time
(8 days)
Activity F
5 10 15 20 250
Activity KActivity C
LS LF ES EF
IndependentFloat
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Programme Evaluation & Review Technique (PERT)
Optimistic Time (a) This time estimate is theshortest possible time estimated to be takenby an activity.
Pessimistic Time (b) - This time estimate is thelongest possible time estimated to be takenby an activity.
Most Likely Time (m) This time estimate hasthe highest chance of occurrence accordingto the past experiences of the projectmanager.
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0 a bm te
P
R
O
B
A
BI
L
I
T
Y
Time Duration of an activity
Beta CurveMaximum Probability
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Crashing of a Project
0 1 2 3 4 5 6 7 8 9 10
Crash Time Normal Time
100
90
80
70
60
50
40
30
20
10
D
I
R
E
C
T
C
O
S
T
Time duration of an
activity (days)
o
o
o
(Rs)
Crash Cost
Normal Cost
Linear Approximation
Actual Curve
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Earned Value Management (EVM) for Tracking
of Projects
Budgeted Cost of Work Scheduled (BCWS) It isthe sum of the cost budget for all the activitiesin the baseline (original) plan of the project atany specific future point in time. Thus, this isthe budgeted (planned) cost as per theproject plan for a part of the project to becompleted in a given time frame.
Budgeted Cost of Work Performed (BCWP)When a project is under implementation, a
certain part of the project is completed at agiven point in time. The budgeted (planned)cost of all the activities performed till thatpoint in time is called BCWP.
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Earned Value Management (EVM) for
Tracking of Projects
Actual Cost of Work Performed (ACWP) It is theactual cost incurred in implementing a part of theproject till a given point in time.
Cost variance (CV) = BCWP ACWP
A negative value of CV indicates being overbudget and is obviously undesirable.
Schedule variance (SV) = BCWP BCWS
A negative value of SV indicates that less workhas been performed compared to what wasscheduled to be performed till a given point intime.
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A Simple Earned Value Management Chart