In this chapter we will discuss: What is a “project”? objectives and tradeoffs, planning and control in projects, scheduling methods, constant-time networks, PERT method, CPM method, use of project management concepts.
Operations Management Contemporary Concepts and Cases Chapter Fourteen Project Planning and Scheduling McGrawHill/Irwin Copyright © 2011 by The McGrawHill Companies, Inc. All rights reserved Chapter 14 Outline What is a “Project”? Objectives and Tradeoffs Planning and Control in Projects Scheduling Methods ConstantTime Networks PERT Method CPM Method Use of Project Management Concepts 142 What is a “Project”? Unique item or event often a single unit Often located on one place. The unit does not move during production Resources are brought to the project May be of any size, although we focus on large projects 143 Examples of Projects A wedding A divorce Building construction Bridge construction Aircraft carrier R&D project Audit New product introduction Open or close a facility Make a movie Fundraising campaign Ad campaign Software installation 144 Objectives and Tradeoffs Due Date! Meet the deadlineschedule Stay within the budget Meet the specifications 145 Project Management Activities & Decisions Planning Control Scheduling Closing 146 Planning Activities & Decisions Identify the project customer Establish the end product or service Set project objectives Estimate total resources and time required Decide on the form of project organization Make key personnel appointments Define major tasks required Establish a budget 147 Scheduling Activities & Decisions Develop a detailed workbreakdown structure Estimated time required for each task Sequence tasks in proper order Develop a start/stop time for each task Develop detailed budget for each task Assign people to tasks 148 Control Monitor actual time, cost, and performance Compare planned to actual figures Determine whether corrective action is needed Evaluate alternative corrective actions Take appropriate corrective actions 149 Closing Finish all work Close contracts Pay all accounts payable Turn the project over to the owners Reassign personnel and equipment 1410 Calculating ES, EF, LS, LF, and Completion Time Forward Pass: ES (a) = 0 for the starting activity EF (a) = ES (a) + t (a)* ES (a) = max [EF (all predecessors of a)] Project completion time = max [EF(all ending activities)] Backward pass: LF (a) = min [LS (all successors of a)] LS (a) = LF t(a)* * t (a) denotes the duration of activity a 1418 Backward Pass for ‘Write a Business Plan’ (Figure 14.5) B ES EF 4 A D C LS LF 1419 Critical Path Critical Path = longest path in the network – – All activities for which ES=LS and EF=LF Length of critical path is equal to the project completion time – If there is any delay on the critical path, the project will be delayed (unless one takes ‘corrective actions’) – Critical path in example is ACD 1420 Slack Times Slack time equals amount of time a path may be delayed without delaying the project – Paths not on the critical path have slack – Slack = LSES or LFEF 1421 Precedence and Times for Opening a New Office (Table 14.5) Immediate Activity Description Activity Computed Predecessors Time Slack None 1 Lease the site Hire the workers Arrange for the furnishings 1 Install the furnishings Arrange for the phones 1 Install the phones 4,5 1 Move into the office 2,6,4 1422 Network for ‘Open a New Office’ (Figure 14.6) 6 5 5 2 4 3 ES EF LS LF 1423 PERT Program Evaluation Review Technique Developed in 1950’s for missile firing nuclear submarine project Used under conditions of uncertainty in activity times Requires three time estimates for each activity – – – Optimistic Most likely Pessimistic Time estimates have beta distribution 1424 PERT Activity Times Estimate three times for each activity Compute mean completion time for each activity: Te To 4Tm Tp 1425 PERT Activity Times Compute the variance for each activity: vari Tp To Assumes pessimistic and optimistic times cover six standard deviations 1426 PERT Activity Times If T = total completion time of the project, then ET Te critical path and var T vari critical path 1427 CPM Critical Path Method Developed in 1950’s in private sector Used under conditions of certainty in activity times Requires one time estimate for each activity Looks at time/cost tradeoffs – – – – Normal activity time Normal cost Crash time Crash cost 1428 Time-Cost Relationship in CPM (Fig 14.9) Crash Cost Cost Normal Cost Crash Time Time Normal Time 1429 Use of Project Management Concepts Scheduling is only part of a complete approach to project management Tradeoff between sophistication and cost of methods Choice between constant time, PERT, CPM or more advanced techniques Choice of project management software packages, e.g., Microsoft Project 1430 Summary What is a “Project”? Objectives and Tradeoffs Planning and Control in Projects Scheduling Methods ConstantTime Networks PERT Method CPM Method Use of Project Management Concepts 1431 End of Chapter Fourteen 1432 .. .Chapter 14 Outline What is a ? ?Project? ??? Objectives? ?and? ?Tradeoffs Planning? ?and? ?Control in Projects Scheduling? ?Methods ConstantTime Networks PERT Method CPM Method Use of? ?Project? ?Management? ?Concepts... packages, e.g., Microsoft? ?Project 1430 Summary What is a ? ?Project? ??? Objectives? ?and? ?Tradeoffs Planning? ?and? ?Control in Projects Scheduling? ?Methods ConstantTime Networks PERT Method CPM Method Use of? ?Project? ?Management? ?Concepts... & Decisions Identify the? ?project? ?customer Establish the end product or service Set? ?project? ?objectives Estimate total resources? ?and? ?time required Decide on the form of? ?project? ?organization Make key personnel appointments