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Managing Projects
3-1
O u t l in e
O u t l i n e - Co n t i n u e d
Project Controlling
Project Management Techniques: PERT
and CPM
The Framework of PERT and CPM
Network Diagrams and Approaches
Activity-on-Node Example
Activity-on-Arrow Example
3-3
1
O u t l i n e - Co n t i n u e d
O u t l i n e - Co n t i n u e d
3-5
1
L e ar n i ng O b j e c ti v e s
Wh en y o u c o mp l et e t h i s c h ap t er y o u
s h o u l d b e ab l e t o :
1. Use a Gantt chart for scheduling
2. Draw AOA and AON networks
3. Complete forward and backward
passes for a project
4. Determine a critical path
3-6
1
L e ar n i ng O b j e c ti v e s
Wh en y o u c o mp l et e t h i s c h ap t er y o u
s h o u l d b e ab l e t o :
5. Calculate the variance of activity
times
6. Crash a project
3-7
1
A r a b te c P ro j e c t s
u Burj Khalifa. The tallest building in the world, with 160 floors,
located in the heart of Dubai
s downtown area, which aims to
be the world
s most prestigious square kilometer. ($1.5 billion)
u Jumeirah Beach Residences 01 and 03. A huge residential
project that is part of the landmark Dubai Marine area. There
are 13 towers providing 2,693 apartments, a shopping mall to
house 350 retail outlets and 45 restaurants, and all the
luxurious facilities that science can provide. ($500 million)
u Ocean Heights. An architectural freehold residential
masterpiece, based in Dubai, with a twisting structure, making
each floor unique in its design and plan. It will include 83
floors with 564 apartments, totally serviced by state-of-the-art
amenities. ($175 million)
3-8
1
B e c ht e l P r o j e c ts
u Mubarraz Island. This structural work in Abu Dhabi included gas
installations and oil facilities, such as laboratories, control rooms, gas
process plants, and pipelines. The project also included building offices,
residences, mosques, roads, and supporting services in the island.
($200 million)
u Princess Nora Bint Abdulrahman University. In this Saudi Arabian
educational project, Arabtec will construct the married junior staff
housing, composed of 46 buildings with a total area of 240,000 square
meters. ($350 million)
3-9
1
St r a t e g i c I m p o r t a n c e o f
P r oj e ct M a n a g e m e n t
u When Arabtec Construction LLC won the contract for
Burj Khalifa, it quickly had to mobilize an international
force of manual workers, construction professionals,
cooks, and even medical personnel. Its project
management team had to access millions of tons of
supplies and equipment to complete the project.
3 - 10
1
P r o j e c t Ch a r a c t e r i s t i c s
u Single unit
u Many related activities
u Difficult production planning and
inventory control
u General purpose equipment
u High labor skills
3 - 11
1
Ex a m p l e s o f P r o j e c t s
u Building Construction
u Research Project
3 - 12
1
M an ag e m e nt o f P r o j e c ts
P r o je c t M a n a g e m e n t A c t i v it i e s
u Planning
u Objectives
u Resources
u Work break-down
structure
u Organization
u Scheduling
u Project activities
u Start & end times
u Network
u Controlling
u Monitor, compare, revise, action
3 - 14
1
P r o j e c t P l a n n i n g , Sc h e d u l i n g , a n d
Co n t r o l l i n g
Figure 3.1
Before
project
Start of project
Timeline
During
project
3 - 15
1
P r o j e c t P l a n n i n g , Sc h e d u l i n g , a n d
Co n t r o l l i n g
Figure 3.1
Before
project
Start of project
Timeline
During
project
3 - 16
1
P r o j e c t P l a n n i n g , Sc h e d u l i n g , a n d
Co n t r o l l i n g
Figure 3.1
Before
project
Start of project
Timeline
During
project
3 - 17
1
P r o j e c t P l a n n i n g , Sc h e d u l i n g , a n d
Co n t r o l l i n g
Figure 3.1
Before
project
Start of project
Timeline
During
project
3 - 18
1
P r o je c t P l a n n in g ,
Sc h e d u l i n g , a n d
Co n t r o l l i n g
Time/cost estimates
Budgets
Engineering diagrams
Cash flow charts
Material availability details
Budgets
Delayed activities report
Slack activities report
Figure 3.1
CPM/PERT
Gantt charts
Milestone charts
Cash flow schedules
Before
project
Start of project
Timeline
During
project
3 - 19
1
P r o je c t P l a n n in g
u Establishing objectives
u Defining project
u Creating work breakdown structure
u Determining
resources
u Forming organization
3 - 20
1
P r o je c t O r g a n i z a t io n
P r o je c t O r g a n i z a t io n
W or k s B es t W h en
A Sa m p l e P r o j e c t O r g a n i z a ti o n
President
Human
Resources
Marketing
Project 1
Project 2
Finance
Design
Quality
Mgt
Production
Mechanical
Engineer
Test
Engineer
Technician
Electrical
Engineer
Computer
Engineer
Technician
Project
Manager
Project
Manager
Figure 3.2
3 - 23
1
T h e R ol e o f
t h e P r oj e ct M a n a g e r
Hi g h l y v i s i b l e
Res p o n s i b l e f o r m ak i n g s u r e t h at :
1. All necessary activities are finished in order
and on time
2. The project comes in within budget
3. The project meets quality goals
4. The people assigned to the project receive
motivation, direction, and information
3 - 24
1
T h e R ol e o f
t h e P r oj e ct M a n a g e r
3 - 25
1
Et h i c a l I s s u e s
W o r k B re a k d o w n Str u ct u re
Level
1.
Project
3 - 27
1
W o r k B re a k d o w n Str u ct u re
Develop Windows 7
Operating System
Level 1
Level 2
Level 3
Software
Design
Develop GUIs
1.1.1
Ensure Compatibility
with Earlier Versions
Level 4
Project
Management
1.1
1.1.2
Compatible with
Windows ME
1.1.2.1
Compatible with
Windows Vista
1.1.2.2
Compatible with
Windows XP
1.1.2.3
Planning
Cost/Schedule
Management
1.0
1.2
System
Testing
1.3
1.2.1
Module
Testing
1.3.1
Defect
Testing
1.3.2
1.2.2
(Work packages)
Figure 3.3
3 - 28
1
P r o j e c t Sc h e d u l i n g
3 - 29
1
P u r p o s e s o f P r o j e c t Sc h e d u l i n g
Sc h e d u l i n g T e c h n i q u e s
3 - 31
1
P r o je c t M a n a g e m e n t T e c h n i q u e s
u Gantt chart
u Critical Path Method (CPM)
u Program Evaluation and Review
Technique (PERT)
3 - 32
1
A S i m p l e Ga n t t C h a r t
Time
A M J
Design
Prototype
Test
Revise
Production
3 - 33
1
Se r v i c e F o r a n A i r c r a f t a t l a y o v e r t o r e d u c e t h e t u r n a r o u n d t i m e
Passengers
Baggage
Fueling
Cargo and mail
Galley servicing
Lavatory servicing
Drinking water
Cabin cleaning
Cargo and mail
Flight services
Operating crew
Baggage
Passengers
Deplaning
Baggage claim
Container offload
Pumping
Engine injection water
Container offload
Main cabin door
Aft cabin door
Aft, center, forward
Loading
First-class section
Economy section
Container/bulk loading
Galley/cabin check
Receive passengers
Aircraft check
Loading
Boarding
10
20
30
Time, Minutes
40
Figure 3.4
3 - 34
1
P r o j e c t Co n t r o l R e p o r t s
u Detailed cost breakdowns for each task
u Total program labor curves
u Cost distribution tables
u Functional cost and hour summaries
u Raw materials and expenditure forecasts
u Variance reports
u Time analysis reports
u Work status reports
3 - 35
1
P E R T a n d CP M
u Network techniques
u Developed in 1950s
u Consider precedence
relationships and
interdependencies
u Each uses a different estimate of
activity times
3 - 36
1
Si x Ste p s o f P E R T & C P M
Si x Ste p s P E R T & C P M
Q u e s t i o n s P E R T & CP M
Ca n A n s w e r
Q u e s t i o n s P E R T & CP M
Ca n A n s w e r
A Co m p a r i s o n o f A O N a n d A O A N e t w o r k
Co n v e n t i o n s
Activity on
Node (AON)
(a) A
B
A
(b)
C
B
B
(c)
A
C
Activity
Meaning
A comes before
B, which comes
before C.
A and B must both
be completed
before C can start.
B and C cannot
begin until A is
completed.
Activity on
Arrow (AOA)
A
B
B
A
Figure 3.5
C
3 - 41
1
A Co m p a r i s o n o f A O N a n d A O A N e t w o r k
Co n v e n t i o n s
Figure 3.5
Activity on
Node (AON)
A
(d)
(e)
B
Activity
Meaning
C and D cannot
begin until both
A and B are
completed.
C cannot begin
until both A and B
are completed; D
cannot begin until
B is completed. A
dummy activity is
introduced in AOA.
Activity on
Arrow (AOA)
A
C
Dummy activity
D
3 - 42
1
A Co m p a r i s o n o f A O N a n d A O A N e t w o r k
Co n v e n t i o n s
Activity on
Node (AON)
(f)
C
Activity
Meaning
B and C cannot
begin until A is
completed. D
cannot begin
until both B and
C are completed.
A dummy
activity is again
introduced in
AOA.
Activity on
Arrow (AOA)
A
Dummy
activity
Figure 3.5
D
C
3 - 43
1
A O N E xa m p l e
Description
Build internal components
Table 3.1
Immediate
Predecessors
A, B
D, E
F, G
3 - 44
1
AON N et w o r k fo r
Ca i r o F i n e s t
Activity A
(Build Internal Components)
Activity B
(Modify Roof and Floor)
Start
Start
Activity
Figure 3.6
3 - 45
1
AON N et w o r k fo r
Ca i r o F i n e s t
Activity A Precedes Activity C
A
Start
Activities A and B
Precede Activity D
Figure 3.7
3 - 46
1
AON N et w o r k fo r
Ca i r o F i n e s t
F
A
C
E
Start
H
B
Figure 3.8
3 - 47
1
A O A N e t w o rk fo r
Ca i r o F i n e s t
Ro (M B
o f od
/F i f y
lo
or
)
Dummy
Activity
4
F
Co (In
n t s ta
ro ll
ls
)
E
(B uild Burner)
(B
C ui
om l d A
p o In t
ne er n
nt a
s) l
C
2
(Construct
Stack)
D
3
5
(Pour
Concrete/
Install Frame)
H
(Inspect/
Test)
G al l
t ion
s
t
(In l l u i ce)
PoDev
Figure 3.9
3 - 48
1
D e t e r m i n i n g t h e P r o j e c t Sc h e d u l e
Per f o r m a Cr i t i c al Pat h A n al y s i s
u The critical path is the longest path
through the network
u The critical path is the shortest time in
which the project can be completed
u Any delay in critical path activities
delays the project
u Critical path activities have no slack
time
3 - 49
1
D e t e r m i n i n g t h e P r o j e c t Sc h e d u l e
Per f o r m a Cr i t i c al Pat h A n al y s i s
Activity
A
B
C
D
E
F
G
H
Description
Time (weeks)
Build internal components
2
Modify roof and floor
3
Construct collection stack
2
Pour concrete and install frame
4
Build high-temperature burner
4
Install pollution control system
3
Install air pollution device
5
Inspect and test
2
Total Time (weeks)
25
Table 3.2
3 - 50
1
D e t e r m i n i n g t h e P r o j e c t Sc h e d u l e
Per f o r m a Cr i t i c al Pat h A n al y s i s
Earliest start (ES) = earliest time at which an activity can
Activity Description
Time (weeks)
start, assuming all predecessors
have
A
Build internal
components
2
been completed
Modify
roof and
floor
3
EarliestBfinish (EF)
= earliest
time
at which an activity can
be finished
C
Construct
collection stack
2
D start (LS)
Pour=concrete
and
4
Latest
latest time
atinstall
which frame
an activity can
start so as to not delay
E
Build high-temperature
burnerthe completion
4
of thecontrol
entire project
F
Install time
pollution
system
3
LatestGfinish (LF)
= latest
time bydevice
which an activity has
Install
air pollution
5 to
be finished so as to not delay the
H
Inspectcompletion
and test time of the entire project
2
Total Time (weeks)
25
Table 3.2
3 - 51
1
D e t e r m i n i n g t h e P r o j e c t Sc h e d u l e
Per f o r m a Cr i t i c al Pat h A n al y s i s
Activity Name
or Symbol
A
Earliest
Start
ES
EF
Latest
Start
LS
LF
Figure 3.10
Earliest
Finish
Latest
Finish
Activity Duration
3 - 52
1
Fo r w ar d P as s
B eg i n at s t ar t i n g ev en t an d w o r k f o r w ar d
Earliest Start Time Rule:
u If an activity has only a single immediate
predecessor, its ES equals the EF of the
predecessor
u If an activity has multiple immediate
predecessors, its ES is the maximum of
all the EF values of its predecessors
ES = Max {EF of all immediate predecessors}
3 - 53
1
Fo r w ar d P as s
B eg i n at s t ar t i n g ev en t an d w o r k f o r w ar d
Earliest Finish Time Rule:
u The earliest finish time (EF) of an activity
is the sum of its earliest start time (ES)
and its activity time
EF = ES + Activity time
3 - 54
1
ES / E F N e t w o r k f o r Ca i r o F i n e s t P a p e r M i l l s
ES
EF = ES + Activity time
Start
3 - 55
1
ES / E F N e t w o r k f o r Ca i r o F i n e s t P a p e r M i l l s
EF of A =
ES of A + 2
ES
of A
Start
A
0
3 - 56
1
ES / E F N e t w o r k f o r Ca i r o F i n e s t P a p e r M i l l s
2
Start
0
0
ES
of B
EF of B =
ES of B + 3
B
0
3
3
3 - 57
1
ES / E F N e t w o r k f o r Ca i r o F i n e s t P a p e r M i l l s
2
Start
0
0
3 - 58
1
ES / E F N e t w o r k f o r Ca i r o F i n e s t P a p e r M i l l s
2
Start
= Max (2, 3)
0
D
3
4
3 - 59
1
ES / E F N e t w o r k f o r Ca i r o F i n e s t P a p e r M i l l s
P ap er
Start
0
0
3 - 60
1
ES / E F N e t w o r k f o r Ca i r o F i n e s t P a p e r M i l l s
2
Start
13
4
0
15
2
G
8
13
5
Figure 3.11
3 - 61
1
Bac kw ar d P a s s
B eg i n w i t h t h e l as t ev en t an d w o r k b ac k w ar d s
Latest Finish Time Rule:
u If an activity is an immediate predecessor
for just a single activity, its LF equals the
LS of the activity that immediately follows it
u If an activity is an immediate predecessor
to more than one activity, its LF is the
minimum of all LS values of all activities
that immediately follow it
LF = Min {LS of all immediate following activities}
3 - 62
1
Bac kw ar d P a s s
B eg i n w i t h t h e l as t ev en t an d w o r k b ac k w ar d s
Latest Start Time Rule:
u The latest start time (LS) of an activity is
the difference of its latest finish time (LF)
and its activity time
LS = LF Activity time
3 - 63
1
L S/ L F T i m e s f o r
Cai r o F i ne s t P a per M i l l s
2
Start
13
13
15
15
LS = LF Activity time
G
8
13
5
LF = EF
of Project
3 - 64
1
L S/ L F T i m e s f o r
Ca i r o F i n e s t P a p e r M i l l s
2
Start
10
7
13
13
13
4
0
15
15
G
8
13
5
3 - 65
1
L S/ L F T i m e s f o r
M ilw au kee P ap er
LF = Min(4,
10)
2
2
2
2
Start
10
4
4
0
0
7
13
13
13
15
15
G
8
13
13
3 - 66
1
L S/ L F T i m e s f o r
Ca i r o F i n e s t
0
0
Start
10
0
1
7
13
13
13
15
15
13
13
3 - 67
1
Cr i t i c a l P a t h f o r
Ca i r o F i n e s t
0
0
Start
10
0
1
7
13
13
13
15
15
13
13
3 - 68
1
Co m p u t i n g S l a c k T i m e
or
Slack = LF EF
3 - 69
1
Co m p u t i n g S l a c k T i m e
Earliest
Start
Activity
ES
A
B
C
D
E
F
G
H
0
0
2
3
4
4
8
13
Earliest
Finish
EF
Latest
Start
LS
Latest
Finish
LF
2
3
4
7
8
7
13
15
0
1
2
4
4
10
8
13
2
4
4
8
8
13
13
15
On
Slack
Critical
LS ES
Path
0
1
0
1
0
6
0
0
Yes
No
Yes
No
Yes
No
Yes
Yes
Table 3.3
3 - 70
1
ES EF G a n t t Ch a r t
f o r Ca i r o F i n e s t
1 2 3 4
13 14 15 16
10
11
12
A Build internal
components
B Modify roof and floor
C Construct collection
stack
D Pour concrete and
install frame
E Build hightemperature burner
F Install pollution
control system
G Install air pollution
device
H Inspect and test
3 - 71
1
L S L F G a n t t C h a r t
f o r Ca i r o F i n e s t
1 2 3 4
13 14 15 16
10
11
12
A Build internal
components
B Modify roof and floor
C Construct collection
stack
D Pour concrete and
install frame
E Build hightemperature burner
F Install pollution
control system
G Install air pollution
device
H Inspect and test
3 - 72
1
V a r i a b il i t y i n A c t iv i ty T i m e s
3 - 73
1
V a r i a b il i t y i n A c t iv i ty T i m e s
V a r i a b il i t y i n A c t iv i ty T i m e s
Expected time:
t = (a + 4m + b)/6
Variance of times:
2
v = [(b a)/6]
3 - 75
1
V a r i a b il i t y i n A c t iv i ty T i m e s
Probability
Ex p ec t ed t i m e:
t
=
(
a
+
4
m
+
b
)
/
6
Probability of
1 in 100 of
Probability of
Var i a<na coccurring
e o f t i m es :
1 in 100 of >
v = [ (b a)/6] 2 b occurring
Activity
Time
Optimistic
Time (a)
Most Likely
Time (m)
Pessimistic
Time (b)
3 - 76
1
Co m p u t i n g V a r i a n c e
Activity
A
B
C
D
E
F
G
H
Optimistic
Most
Likely
Pessimistic
Expected
Time
Variance
t = (a + 4m + b)/6
[(b a)/6] 2
1
2
1
2
1
1
3
1
2
3
2
4
4
2
4
2
3
4
3
6
7
9
11
3
2
3
2
4
4
3
5
2
.11
.11
.11
.44
1.00
1.78
1.78
.11
Table 3.4
3 - 77
1
P r o b a b il i t y o f P ro j e c t C om p le ti o n
Pr o j ec t v ar i an c e i s c o m p u t ed b y
s u m m i n g t h e v ar i an c es o f c r i t i c al
ac t i v i t i es
s
= Project variance
= (variances of activities
on critical path)
3 - 78
1
P r o b a b il i t y o f P ro j e c t C om p le ti o n
Pr o j ec t v ar i an c e i s c o m p u t ed b y
s u m m i n g t h e v ar i an c es o f c r i t i c al
ac t i v i t i es
s
Project variance
2
Project variance
P r o b a b il i t y o f P ro j e c t C om p le ti o n
PERT mak es t w o m o r e as s u m p t i o n s :
uTotal project
completion times
follow a normal
probability
distribution
uActivity times are
statistically
independent
3 - 80
1
P r o b a b il i t y o f P ro j e c t C om p le ti o n
15 Weeks
Figure 3.13
P r o b a b il i t y o f P ro j e c t C om p le ti o n
Wh at i s t h e p r o b ab i l i t y t h i s p r o j ec t c an
b e c o m p l et ed o n o r b ef o r e t h e 16 w eek
d ead l i n e?
due
expected date
Z = date of completion /s
3 - 82
1
P r o b a b il i t y o f P ro j e c t C om p le ti o n
Wh at i s t h e p r o b ab i l i t y t h i s p r o j ec t c an b e
c o m p l et ed o n o r b ef o r e t h e 16 w eek d ead l i n e?
From Appendix I
.1
.2
.00
.50000
.53983
.01
.50399
.54380
.07
.52790
.56749
.08
.53188
.57142
due
expected date
.5 .69146
.69497
.71566 .71904
date
of
completion
Z=
/s p
.6
.72575
.72907
.74857
.75175
P r o b a b il i t y o f P ro j e c t C om p le ti o n
Probability
(T 16 weeks)
is 71.57%
15
Weeks
16
Weeks
Time
Figure 3.14
3 - 84
1
D e t e r m i n i n g P r o j e c t Co m p l e t i o n T i m e
Probability
of 0.99
Probability
of 0.01
2.33 Standard
deviations
From Appendix I
Figure 3.15
2.33
3 - 85
1
V a r i a b i l i t y o f Co m p l e t i o n T i m e f o r
N on c r it i c a l P a t h s
W h a t P r o j e c t M a n a g e m e n t H a s P r o v i d e d So
Fa r
1. The project
s expected completion time is
15 weeks
2. There is a 71.57% chance the equipment
will be in place by the 16 week deadline
3. Five activities (A, C, E, G, and H) are on
the critical path
4. Three activities (B, D, F) are not on the
critical path and have slack time
5. A detailed schedule is available
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T r a d e -O f f s a n d P r o j e c t C r a s h i n g
It i s n o t u n c om m o n t o f ac e t h e
f o l l o w i n g s i t u at i o n s :
u The project is behind schedule
u The completion time has been
moved forward
Shortening the duration of the
project is called
project crashing
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F a c t o r s t o Co n s i d e r W h e n Cr a s h i n g a
P r o je c t
St e p s i n P r o j e c t C r a s h i n g
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St e p s i n P r o j e c t C r a s h i n g
St e p s i n P r o j e c t C r a s h i n g
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Cr a s h i n g T h e P r o j e c t
Time (Wks)
Activity Normal Crash
A
B
C
D
E
F
G
H
2
3
2
4
4
3
5
2
1
1
1
2
2
2
2
1
Cost ($)
Normal
22,000
30,000
26,000
48,000
56,000
30,000
80,000
16,000
22,750
34,000
27,000
49,000
58,000
30,500
84,500
19,000
750
2,000
1,000
1,000
1,000
500
1,500
3,000
Yes
No
Yes
No
Yes
No
Yes
Yes
Table 3.5
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Cr a s h a n d N o r m a l T i m e s a n d Co s t s f o r
A c t iv i t y B
Activity
Cost
Crash
Crash Cost/Wk = Crash Cost Normal Cost
Normal Time Crash Time
$34,000
Crash $33,000
Cost
$34,000 $30,000
=
3 1
$4,000
=
= $2,000/Wk
2 Wks
$32,000
$31,000
$30,000
Normal
Cost
Figure 3.16
2013 Pears on Educat ion
Normal
|
1
Crash Time
|
2
|
3
Normal Time
Time (Weeks)
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Cr i t i c a l P a t h a n d S l a c k T i m e s f o r Ca i r o F i n e s t
0
0
Start
Slack = 0
10
Slack = 0
4
4
0
1
Slack = 1
7
13
Slack = 6
8
13
13
Slack = 0
7
13
13
Slack = 1
15
15
Slack = 0
Slack = 0
Figure 3.17
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A d v a n t a g e s o f P E R T / CP M
A d v a n t a g e s o f P E R T / CP M
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L i m i t a t io n s of P E R T/ C P M
P r o j e c t M a n a g e m e n t So f t w a r e
Us i n g M i c r o so f t P r o j e c t
Program 3.1
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Us i n g M i c r o so f t P r o j e c t
Program 3.2
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Us i n g M i c r o so f t P r o j e c t
Program 3.3
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