7. project management

OPERATIONSOPERATIONSMANAGEMENTMANAGEMENT

OO MMPP“PROJECT

MANAGEMENT”By: -By: -

HAKEEM–UR–REHMANHAKEEM–UR–REHMANPCBA–UCPPCBA–UCP

WHAT IS A PROJECT?WHAT IS A PROJECT?““Non – Routine, one time effort, limited by time Non – Routine, one time effort, limited by time and resources, and performance specifications and resources, and performance specifications designed to meet customer needs.”designed to meet customer needs.”

(or)(or)

““Special operations designed to accomplish a set of Special operations designed to accomplish a set of objectives in a limited time frame.”objectives in a limited time frame.”

WHAT IS PROJECT WHAT IS PROJECT MANAGEMENT?MANAGEMENT?

Project management is “the application of Project management is “the application of knowledge, skills, tools, and techniquesknowledge, skills, tools, and techniques to to project activities in order to meet or exceed project activities in order to meet or exceed stakeholder needs and expectations from a stakeholder needs and expectations from a project”.project”.

PROJECT MANAGEMENT TOOLS PROJECT MANAGEMENT TOOLS AND TECHNIQUESAND TECHNIQUES

Good project management deals with Good project management deals with three three factors: time, cost and performance.factors: time, cost and performance.

Some specific ones includeSome specific ones include Gantt charts, PERT charts, critical path analysis Gantt charts, PERT charts, critical path analysis

(time)(time) Cost estimates and Earned Value Analysis (cost)Cost estimates and Earned Value Analysis (cost)

Work Breakdown Structure (WBS)Work Breakdown Structure (WBS) ““A hierarchical method that successively subdivides A hierarchical method that successively subdivides

the work of the project into smaller details.”the work of the project into smaller details.” Such a structure defines tasks that can be Such a structure defines tasks that can be

completed independently of other tasks, facilitating completed independently of other tasks, facilitating resource allocation, assignment of responsibilities, resource allocation, assignment of responsibilities, and measurement and control of the project.and measurement and control of the project.

Work Breakdown Structure Work Breakdown Structure (WBS) DIAGRAM(WBS) DIAGRAM

WORK BREAKDOWN STRUCTURE OUTLINEWORK BREAKDOWN STRUCTURE OUTLINE

Level 1Level 1 Level 2Level 2 Level 3Level 3Task 1Task 1

Subtask 1.1Subtask 1.1

Work Package 1.1.1Work Package 1.1.1







Task 2Task 2





GANTT CHART

Graph or bar chart with a bar for each project activity that shows passage of time Provides visual display of project scheduleProvides visual display of project schedule Slack: amount of time an activity can be delayed without delaying the project

| | | | |Activity

Design house and obtain financing

Lay foundation

Order and receive materials

Build house

Select paint

Select carpet

Finish work

0 2 4 6 80 2 4 6 8 10 10MonthMonth

MonthMonth11 33 55 77 99

Basic Rules: Developing a project Basic Rules: Developing a project networknetwork

Eight Rules Apply:Eight Rules Apply:

1.1. Networks typically flow from left to right.Networks typically flow from left to right.2.2. An Activity cannot begin until all preceding activities have An Activity cannot begin until all preceding activities have

been completed.been completed.3.3. Arrows on networks indicate precedence and flow. Arrows can Arrows on networks indicate precedence and flow. Arrows can

cross over each other.cross over each other.4.4. Each activity should have a unique identification number.Each activity should have a unique identification number.5.5. An activity identification number must be larger than that of An activity identification number must be larger than that of

any activities preceding it.any activities preceding it.6.6. Looping in not allowed (in other words recycling through a set Looping in not allowed (in other words recycling through a set

of activities cannot take place).of activities cannot take place).7.7. Conditional statements are not allowed (i.e. this type of Conditional statements are not allowed (i.e. this type of

statement should not appear: if successful, do something; if statement should not appear: if successful, do something; if not, do nothing)not, do nothing)

8.8. When there are multiple starts, a common start node can be When there are multiple starts, a common start node can be used to indicate a clear project beginning on the network. used to indicate a clear project beginning on the network. Similarly, a single project end, node can be used to indicate a Similarly, a single project end, node can be used to indicate a clear ending. clear ending.

CONSTRUCTING A CONSTRUCTING A PROJECT NETWORKPROJECT NETWORK

ActivityActivity An element of the project that require time; may or may not required resources An element of the project that require time; may or may not required resources Description of activities should use verb/noun format; develop project Description of activities should use verb/noun format; develop project

specificationsspecifications Merge ActivityMerge Activity

More than one activity immediately preceding it ( more than one arrow flowing to More than one activity immediately preceding it ( more than one arrow flowing to it)it)

Parallel ActivitiesParallel Activities Activities that can take place at the same time, if the manager wishes; may or Activities that can take place at the same time, if the manager wishes; may or

may not occur simultaneously may not occur simultaneously PathPath

A sequence of connected, dependent activitiesA sequence of connected, dependent activities Critical PathCritical Path

Longest path (s) through the network; if an activity on the path is delayed, the Longest path (s) through the network; if an activity on the path is delayed, the project is delayed the same amount of time.project is delayed the same amount of time.

EventEvent A point in time when the activity is started or finished; does not consume time A point in time when the activity is started or finished; does not consume time

Burst ActivityBurst Activity More than one activities immediately following it ( more than one dependency More than one activities immediately following it ( more than one dependency

arrow flowing from it)arrow flowing from it) Dummy ActivityDummy Activity

A dummy activity, which is normally depicted by a dashed arrow, consumes no A dummy activity, which is normally depicted by a dashed arrow, consumes no time or resources.time or resources.

Activity–On–Arc Network Activity–On–Arc Network Fundamentals Fundamentals

Predecessor, Successor & Concurrent or Parallel activitiesPredecessor, Successor & Concurrent or Parallel activities

A1 2

B C

A is preceded by nothing

B is preceded by A

C is preceded by B

(A)

X1

Y

Z

Y and Z are preceded by X

Y and Z can begin at the same time, if you wish

(B)

Activity – On – Arc Network Activity – On – Arc Network Fundamentals Fundamentals


J

1K

L

J,K & L can begin at the same time, if you wish (they need not occur simultaneously)

(C)

X

Y

Z

(D)

M

All (J,K,L) must be completed before M can begin

1

AA

Z is preceded by X and Y

‘AA’ is preceded by X and Y

Activity – On – Arc Network Activity – On – Arc Network Fundamentals Fundamentals


Use of Dummy activity:

1. Activity ‘C’ can start immediately after ‘A’ and ‘B’ are completed.

2. Activity ‘E’ can start immediately after only ‘B’ is completed.

1

2

A C

B E

D

Here, ‘D’ is a Dummy Activity.

Example: (AOA Example: (AOA Network)Network)

Consider the following data:Consider the following data:

ActivityActivity Description Description Immediate Immediate Predecessor(s)Predecessor(s)

AA Select administrative and medical staffSelect administrative and medical staff --

BB Select site and do site surveySelect site and do site survey --

CC Select equipmentSelect equipment AA

DD Prepare final construction plans and layoutPrepare final construction plans and layout BB

EE Bring utilities to the site Bring utilities to the site BB

FF Interview applicants and fill positions in Interview applicants and fill positions in nursing, support staff, maintenance, & nursing, support staff, maintenance, & securitysecurity

AA

GG Purchase and take delivery of equipmentPurchase and take delivery of equipment CC

HH Construct the hospitalConstruct the hospital DD

II Develop an information systemDevelop an information system AA

JJ Install the equipmentInstall the equipment E, G, HE, G, H

KK Train nurses and support staffTrain nurses and support staff F, I, JF, I, JDraw the AOA network Diagram.

AOA Network:AOA Network:

1

2

4

3

5 6

7

8

9

A

B

C

D

H

E

I

G

F

K

Dummy

J

QUESTIONQUESTION

ActivityActivity Description Description Immediate Immediate Predecessor(s)Predecessor(s)

AA Procurement of parts for sub – assembly ‘1’Procurement of parts for sub – assembly ‘1’ NoneNone

BB Procurement of parts for sub – assembly ‘2’Procurement of parts for sub – assembly ‘2’ NoneNone

CC Procurement of parts for sub – assembly ‘3’Procurement of parts for sub – assembly ‘3’ None None

DD Building sub – assembly ‘1’ Building sub – assembly ‘1’ AA

EE Building sub – assembly ‘2’Building sub – assembly ‘2’ BB

FF Building sub – assembly ‘4’Building sub – assembly ‘4’ D,ED,E

GG Building sub – assembly ‘3’Building sub – assembly ‘3’ B,CB,C

HH Building the final product Building the final product F,GF,G

II Final TestFinal Test HH

Develop the network by yourself.

In 1957 the In 1957 the Critical Path Method (CPM)Critical Path Method (CPM) was developed as a was developed as a network model for project management. network model for project management. CPM is a CPM is a deterministic method that uses a fixed time estimate for deterministic method that uses a fixed time estimate for each activity. each activity. While CPM is easy to understand and use, it While CPM is easy to understand and use, it does not consider the time variations that can have a does not consider the time variations that can have a great impact on the completion time of a complex project.great impact on the completion time of a complex project.

The The Program Evaluation and Review Technique (PERT)Program Evaluation and Review Technique (PERT) is a is a network model that allows for randomness in activity network model that allows for randomness in activity completion timescompletion times.. PERT was developed in the late 1950's PERT was developed in the late 1950's for the U.S. Navy's Polaris project having thousands of for the U.S. Navy's Polaris project having thousands of

contractors. It has the potential to reduce both the time contractors. It has the potential to reduce both the time and cost required to complete a project.and cost required to complete a project.

PROGRAM/PROJECT EVALUATION & PROGRAM/PROJECT EVALUATION & REVIEW TECHNIQUE (REVIEW TECHNIQUE (PERTPERT)) & &CRITICAL PATH METHOD (CRITICAL PATH METHOD (CPMCPM))

CPM: EXAMPLECPM: EXAMPLECPM NetworkCPM Network

11 88

22

66

44

33

77

a, 6a, 6

f, 15f, 15

b, 8b, 8

c, 5c, 5e, 9e, 9

d, 13d, 13

g, 17g, 17 h, 9h, 9

i, 6i, 6

j, 12j, 12

55

Activity-on-Arc Network Activity-on-Arc Network FundamentalsFundamentals

Performing few simple computations allows PM to Performing few simple computations allows PM to

complete a process know as complete a process know as Forward and Backward Forward and Backward

PassPass

FORWARD PASS – EARLIEST TIMESFORWARD PASS – EARLIEST TIMES

1.1. How soon can the activity start? (early start – ES)How soon can the activity start? (early start – ES)

2.2. How soon can the activity finish? (early finish – EF)How soon can the activity finish? (early finish – EF)

3.3. How soon can the project be finished? (expected time – ET)How soon can the project be finished? (expected time – ET)

BACKWARD PASS – LATEST TIMESBACKWARD PASS – LATEST TIMES

1.1. How late can the activity start? (late start – LS)How late can the activity start? (late start – LS)

2.2. How late can the activity finish? (late finish – LF)How late can the activity finish? (late finish – LF)

3.3. Which activities represent critical path (CP)? This is the longest Which activities represent critical path (CP)? This is the longest

path in the network which, when delayed, will delay the projectpath in the network which, when delayed, will delay the project

4.4. How long can the activity be delayed? (slack or float – SL)How long can the activity be delayed? (slack or float – SL)

CPM ExampleCPM ExampleES and EF TimesES and EF Times

11 88

22

66

44

33

77

a, 6a, 6a, 6a, 6

f, 15f, 15f, 15f, 15

b, 8b, 8b, 8b, 8

c, 5c, 5c, 5c, 5

e, 9e, 9e, 9e, 9

d, 13d, 13d, 13d, 13

g, 17g, 17g, 17g, 17 h, 9h, 9h, 9h, 9

i, 6i, 6i, 6i, 6

j, 12j, 12j, 12j, 12

55

0 6

0 8

0 5

5 14

8 21 21 33

6 23 21 30

23 29

6 21

Project’s EF = 33Project’s EF = 33


Backward Pass – Latest Times; similar to Backward Pass – Latest Times; similar to

Forward Pass; remember three things:Forward Pass; remember three things:

1.1.SubtractSubtract activity times along each path activity times along each path

starting with the project end activity (LF – Dur. starting with the project end activity (LF – Dur.

= LS)= LS)

2.2.CarryCarry the LS to the next preceding activity to the LS to the next preceding activity to

establish its LF, establish its LF, unlessunless

3.3.Next preceding activity is a Next preceding activity is a burstburst activity; activity;

select the smallest LS of all its immediate select the smallest LS of all its immediate

successor activities to establish its LFsuccessor activities to establish its LF

CPM ExampleCPM ExampleCPM ExampleCPM Example LS and LF TimesLS and LF Times

11 88

22

66

44

33

77

a, 6a, 6a, 6a, 6

f, 15f, 15f, 15f, 15

b, 8b, 8b, 8b, 8

c, 5c, 5c, 5c, 5

e, 9e, 9e, 9e, 9

d, 13d, 13d, 13d, 13

g, 17g, 17g, 17g, 17

h, 9h, 9h, 9h, 9

i, 6i, 6i, 6i, 6

j, 12j, 12j, 12j, 12

55

0 6

0 8

0 5

5 14

8 21 21 33

6 23

21 30

23 29

6 21

3 9

0 8

7 12

12 21

21 33

27 33

8 21

10 27

24 33

9 24


Slack or Float – SLSlack or Float – SL

Forward & Backward Passes ComputedForward & Backward Passes Computed

Possible to determine which activities can Possible to determine which activities can

be delayed by computing “Slack” or “Float”be delayed by computing “Slack” or “Float”

LS – ES = SLLS – ES = SL

LF – EF = SLLF – EF = SL

Total Slack: tells us the amount of time an Total Slack: tells us the amount of time an

activity can be delayed; not delay projectactivity can be delayed; not delay project

CPM ExampleCPM ExampleCPM ExampleCPM ExampleSLACKSLACK

11 88

22

66

44

33

77

a, 6a, 6a, 6a, 6

f, 15f, 15f, 15f, 15

b, 8b, 8b, 8b, 8

c, 5c, 5c, 5c, 5e, 9e, 9e, 9e, 9

d, 13d, 13d, 13d, 13

g, 17g, 17g, 17g, 17

h, 9h, 9h, 9h, 9

i, 6i, 6i, 6i, 6

j, 12j, 12j, 12j, 12

55

0 6

0 8

0 5 5 14

8 21 21 33

6 23

21 30

23 29

6 21

3 9

0 8

7 12 12 21

21 33

27 33

8 21

10 27

24 33

9 24

3 4

3

3

4

0

0

7 7

0

CPMCPM ExampleExampleCRITICAL PATHCRITICAL PATH

11 88

22

66

44

33

77

a, 6a, 6a, 6a, 6

f, 15f, 15f, 15f, 15

b, 8b, 8b, 8b, 8

c, 5c, 5c, 5c, 5

e, 9e, 9e, 9e, 9

d, 13d, 13d, 13d, 13

g, 17g, 17g, 17g, 17 h, 9h, 9h, 9h, 9

i, 6i, 6i, 6i, 6

j, 12j, 12j, 12j, 12

55

CPM ExampleCPM ExampleCritical Path:Critical Path:

1 1 3 3 7 7 8 8

Activities on the Critical Path:Activities on the Critical Path:

bb d d j j

Total Project Time:Total Project Time:

8+13+12 = 8+13+12 = 3333

PRACTICE QUESTIONPRACTICE QUESTION

Network InformationNetwork Information

Country Engineers Design DepartmentCountry Engineers Design Department

ACTIVITYACTIVITY DESCRIPTIONDESCRIPTION PROCEDING PROCEDING ACTIVITYACTIVITY

ACTIVITY TIMEACTIVITY TIME

(Duration)(Duration)

AA Application Application ApprovalApproval

NoneNone 55

BB Construction Construction PlansPlans

AA 1515

CC Traffic StudyTraffic Study AA 1010

DD Service Service Availability Availability CheckCheck

AA 55

EE Staff ReportStaff Report B,CB,C 1515

FF Commission Commission ApprovalApproval

B,C,DB,C,D 1010

GG Wait for Wait for ConstructionConstruction

FF 170170

HH OccupancyOccupancy E,GE,G 3535

Program/Project Program/Project Evaluation & Review Evaluation & Review Technique (PERT)Technique (PERT)

The technique is based on the The technique is based on the assumption that an activity’s duration assumption that an activity’s duration follows a probability distribution instead follows a probability distribution instead of being a single value.of being a single value.

The probabilistic information about the The probabilistic information about the activities is translated into probabilistic activities is translated into probabilistic information about the project.information about the project.

PERTPERTThree time estimates are required to compute the Three time estimates are required to compute the

parameters of an activity’s duration distribution:parameters of an activity’s duration distribution:

Pessimistic TimePessimistic Time (t (tp p )) - the - the longest time that an activity might longest time that an activity might requirerequire. Three standard deviations from the mean is commonly . Three standard deviations from the mean is commonly used for the pessimistic time.used for the pessimistic time.

Most Likely TimeMost Likely Time (t (tm m ) -) - the the completion time having the highest completion time having the highest probabilityprobability. Note that this time is different from the expected time. Note that this time is different from the expected time

Optimistic TimeOptimistic Time (t (to o )) - - generally the shortest time in which the generally the shortest time in which the activity can be completedactivity can be completed. It is common practice to specify . It is common practice to specify optimistic times to be three standard deviations from the mean optimistic times to be three standard deviations from the mean so that there is approximately a 1% chance that the activity will so that there is approximately a 1% chance that the activity will be completed within the optimistic time.be completed within the optimistic time.

BETA PROBABILITY BETA PROBABILITY DISTRIBUTION WITH THREE DISTRIBUTION WITH THREE

TIME ESTIMATESTIME ESTIMATES

PERTPERT

PERT assumes a beta probability distribution for the time PERT assumes a beta probability distribution for the time estimates. For a beta distribution, the expected time and estimates. For a beta distribution, the expected time and variance for each activity can be:variance for each activity can be:

Expected time = ( Optimistic + 4 x Most likely + Pessimistic Expected time = ( Optimistic + 4 x Most likely + Pessimistic ) / 6) / 6

ttee = ( t = ( too + 4t + 4tmm + t + tp p ) / 6) / 6

Variance = [ (Pessimistic – Optimistic) / 6 ] Variance = [ (Pessimistic – Optimistic) / 6 ] 22

VVtt = [ ( t = [ ( tpp - t - to o ) / 6 ] ) / 6 ] 22

PERT : EXAMPLE PERT : EXAMPLE

Immed. Optimistic Most Likely Immed. Optimistic Most Likely PessimisticPessimistic

ActivityActivity Predec.Predec. Time (Hr.Time (Hr.) ) Time (Hr.)Time (Hr.) Time (Hr.)Time (Hr.) A -- 4 6 8A -- 4 6 8B -- 1 4.5 5B -- 1 4.5 5C A 3 3 3C A 3 3 3

D A 4 5 6 D A 4 5 6 E A 0.5 1 1.5E A 0.5 1 1.5 F B,C 3 4 5F B,C 3 4 5 G B,C 1 1.5 5G B,C 1 1.5 5 H E,F 5 6 7H E,F 5 6 7 I E,F 2 5 8I E,F 2 5 8 J D,H 2.5 2.75 4.5J D,H 2.5 2.75 4.5 K G,I 3 5 7K G,I 3 5 7

PERT : EXAMPLEPERT : EXAMPLEPERT NETWORKPERT NETWORK

AA

DD

CC

BBFF

EE

GG

II

HH

KK

JJ

PERT : EXAMPLEPERT : EXAMPLE ActivityActivity Expected TimeExpected Time VarianceVariance

A A 6 6 4/9 4/9 B B 4 4 4/9 4/9 C C 3 0 3 0 D D 5 5 1/9 1/9 E E 1 1 1/36 1/36 F F 4 4 1/9 1/9 G G 2 2 4/9 4/9 H H 6 6 1/9 1/9 I I 5 1 5 1 J J 3 3 1/9 1/9 K K 5 5 4/9 4/9

SOLUTIONSOLUTION EARLIEST/LATEST TIMES:EARLIEST/LATEST TIMES:

ActivityActivity ESES EFEF LSLS LFLF SlackSlack A 0 6 0 6 0 *criticalA 0 6 0 6 0 *critical B 0 4 5 9 5 B 0 4 5 9 5

C 6 9 6 9 0 *C 6 9 6 9 0 * D 6 11 D 6 11 15 20 915 20 9 E E 6 7 6 7 12 13 6 12 13 6

F 9 F 9 13 9 13 9 13 0 *13 0 *

G 9 G 9 11 11 16 18 716 18 7 H 13 H 13 19 19 14 20 114 20 1 I I 13 13 18 18 13 18 0 *13 18 0 * J J 19 19 22 22 20 23 120 23 1 K K 18 18 23 23 18 23 0 *18 23 0 *

PERT : EXAMPLEPERT : EXAMPLE

Activities on the Critical Path:Activities on the Critical Path:

AA C C F F I I K K

Total Project Time:Total Project Time:

6+3+4+5+5 = 6+3+4+5+5 = 2323

PERT : EXAMPLEPERT : EXAMPLE ActivityActivity Expected TimeExpected Time VarianceVariance

A A 6 6 4/9* 4/9* B B 4 4 4/9 4/9 C C 3 0* 3 0* D D 5 5 1/9 1/9 E E 1 1 1/36 1/36 F F 4 4 1/9* 1/9* G G 2 2 4/9 4/9 H H 6 6 1/9 1/9 I I 5 1* 5 1* J J 3 3 1/9 1/9 K K 5 5 4/9* 4/9*

PERT : EXAMPLEPERT : EXAMPLEProbability the project will be completed within Probability the project will be completed within

24 hours24 hoursVVpathpath = V = VAA + V + VCC + V + VFF + V + VII + V + VKK

= 4/9 + 0 + 1/9 + 1 + 4/9 = 4/9 + 0 + 1/9 + 1 + 4/9 = 2= 2pathpath = 1.414 = 1.414

Expected Time = EExpected Time = EAA + E + ECC + E + EFF + E + EII + E + EKK

= 6 + 3 + 4 + 5 + 5= 6 + 3 + 4 + 5 + 5 = 23= 23What is the probability that the project will be What is the probability that the project will be

completed within the 24 hours?completed within the 24 hours?

zz = (24 - 23)/ = (24 - 23)/(24-23)/1.414 = .71(24-23)/1.414 = .71

PERT : EXAMPLEPERT : EXAMPLE

Probability the project will be completed within 24 hoursProbability the project will be completed within 24 hours

From the Standard Normal Distribution table: From the Standard Normal Distribution table: P(z P(z << .71) = .5 + .2612 = .7612 .71) = .5 + .2612 = .7612

2323 2424

..50005000

..26122612

PRACTICE QUESTIONPRACTICE QUESTIONA medical institute is planning to hold an annual conference on A medical institute is planning to hold an annual conference on

eradication of cancer. In order to coordinate the project, it was eradication of cancer. In order to coordinate the project, it was decided to use PERT network. The major activities and time decided to use PERT network. The major activities and time estimates a, m, and b for each activity are carefully computed and estimates a, m, and b for each activity are carefully computed and gives as follows.gives as follows.ActivitiesActivities PredecessorsPredecessors EstimatesEstimates

aa mm bb

AA -- 22 44 1212

BB -- 1010 1212 2626

CC AA 88 99 1010

DD AA 1010 1515 2020

EE AA 77 7.57.5 1111

FF B, CB, C 99 99 99

GG DD 33 3.53.5 77

HH E, F, GE, F, G 55 55 551) Draw the PERT diagram for the project. 2) Compute Expected Time and

Variance for each activity. 3) Compute ES, EF, LS, LF and Slack time.

4) Identify the critical path and find its length and variance. 5) What is the probability that the project will be completed within 30 days?

QUESTIONQUESTIONSS

7. project management

Documents