Chapter Project Management © 2007 Pearson Education Project Management • Used to manage large complex projects • Has three phases: Project planning Project scheduling Project controlling Phase 1: Project Planning What is the project goal or objective? What are the activities (or tasks) involved? How are activities linked? How much time required for each activity? What resources are required for each activity? Phase 2: Project Scheduling When will the entire project be completed? What is the scheduled start and end time for each activity? Which are the “critical” activities? Which are the noncritical activities? Phase 2: Project Scheduling (cont.) How late can noncritical activities be w/o delaying the project? After accounting for uncertainty, what is the probability of completing the project by a specific deadline? Phase 3: Project Controlling At regular intervals during the project the following questions should be considered: • • • • Is the project on schedule? Early? Late? Are costs equal to the budget? Over budget? Under budget? Are there adequate resources? What is the best way to reduce project duration at minimum cost? Identifying Activities • Subdivides a large project into smaller units • Each activity should have a clearly defined starting point and ending point • Each activity is clearly distinguishable from every other activity • Each activity can be a project in itself Work Breakdown Structure (WBS) Divides the project into its various subcomponents and defines hierarchical levels of detail Level Project Major tasks in project Subtasks in major tasks Activities to be completed Example Work Breakdown Structure Identify for Each Activity: • Which other activities must be completed previously (predecessors) • Time required for completion • Resources required This completes the project planning phase Probability Based on Standard Normal Table Prob (proj completion < 16 weeks) = 0.7158 Project Duration for a Given Probability • What project duration does General Foundry have a 99% chance of completing the project within? i.e Prob (proj duration < ? ) = 0.99 • From Std Normal Table, this corresponds to Z = 2.33 Z = (? - 15) = 2.33 1.76 So ? = 15 + 2.33 x 1.76 = 19.1 weeks Scheduling Project Costs Estimate total cost for each activity Identify when cost will actually be spent (we will assume costs are spread evenly) Use EST and LST for each activity to determine how costs are spread over project Monitoring and Controlling Project Costs • While the project is underway, costs are tracked and compared to the budget • What is the value of work completed? Value of work completed = (% of work completed) x (total activity budget) • Are there any cost overruns? Cost difference = (Actual cost) – (Value of work completed) Project Crashing • Reducing a project’s duration is called crashing • Some activities’ times can be shortened (by adding more resources, working overtime, etc.) • The crash time of an activity is the shortest possible duration, and has an associated crash cost Steps in Project Crashing Compute the crash cost per time period Find the current critical path (CP) Find the lowest cost way to crash the CP by time period Update all activity times If further crashing is needed, go to step Crashing Using Linear Programming Decision: How many time periods to crash each activity? Objective: Minimize the total crash cost Decision Variables Ti = time at which activity i starts Ci = number of periods to crash activity i Constraints • An activity cannot begin before all immediate predecessors are complete • There is a maximum amount that each activity can be crashed Go to file 7-2.xls ... Path(s) • Slack is the length of time an activity can be delayed without delaying the project Slack = LST – EST • Activities with slack are Critical Activities • The Critical Path is a continuous... Time • Total slack time is shared by more than activity Example: A week delay in activity B will leave slack for activity D • Free slack time is associated with only activity Example: Activity... the project? After accounting for uncertainty, what is the probability of completing the project by a specific deadline? Phase 3: Project Controlling At regular intervals during the project the