Project Management

Defining Project and Project Management

• A Project is a series of related jobs usually directed

toward some major output and requiring a significant
period of time to perform
• Project Management are the management activities
of planning, directing, and controlling resources
(people, equipment, material) to meet the technical,
cost, and time constraints of a project
PROJECT

Combination of interrelated activities

Executed in logical sequence

Accomplishment of a desired objective

 Various Structures of Project

I. Pure Project
II. Functional Project
III. Matrix Project
 Pure Project

 In a pure project, a self-contained team works full

time on the project.
 Work is done by semipermanant networks of small
project-oriented teams
 E.g. Ship building
 Advantages of Pure Project
 The project manager has full authority over the
project
 Team members report to one boss
 Shortened communication lines
 Decisions are made quickly
 Team pride, motivation, and commitment are high
 Disadvantages of Pure Project
 Duplication of resources since resources are not
shared across projects
 Organizational goals and policies are ignored
 Lack of technology transfer
 Team members have no functional area or “home” so
they often have to worry about life-after-project
 Project termination is delayed
 3-8

Functional Project

A functional project is housed within a functional division

President

Research and
Engineering Manufacturing
Development

Project Project Project Project Project Project Project Project Project

A B C D E F G H I
 Advantages of Functional Project

 A team member can work on several projects

 Technical expertise is maintained within the
functional area even if individuals leave the project or
the organization
 The functional area is a “home” after the project is
completed
 Critical mass of specialized knowledge
 Disadvantages of Functional Project

 Aspects of the project that are not directly related to

the functional area get short-changed
 Motivation of team members is often weak
 Needs of the client are secondary and are responded
to slowly
 Matrix Structure
 The ‘Matrix Project’ tries to blend properties of
functional and pure project structures
 Each project utilizes people from different functional
areas
 The Project Manager decides what tasks and when
they will be performed but the functional managers
control which people and technologies are used
 Different projects borrow resources from functional
arrears
 3-12

Matrix Structure

President

Research and
Engineering Manufacturing Marketing
Development

Manager
Project A
Manager
Project B
Manager
Project C
 Advantages of Matrix structure
 Enhanced communications between functional areas
 Project manager is held responsible for the
completion of the project
 Duplication of resources is minimized
 Functional “home” for team members
 Policies of the parent organization are followed
 Disadvantages of Matrix structure

 Too many bosses

 Depends on project manager’s negotiating skills
 Potential for sub-optimization as PMs hoard
resources for their own projects, thus harming other
projects
 Work Breakdown Structure
A work breakdown structure defines the hierarchy
of project tasks, subtasks, and work packages

Level Program

1 Project 1 Project 2

2 Task 1.1 Task 1.2

3 Subtask 1.1.1 Subtask 1.1.2

4 Work Package 1.1.1.1 Work Package 1.1.1.2

 Work Breakdown Structure
 Task: It is a further sub-division of a project, not
longer than several months in duration and is
performed by one group
 Subtask: Further division of task into meaningful
pieces of work
 Work Package: A group of activities combined to be
assignable to a single organizational unit. It gives
description of what is to be done, when it is to be
started and completed, the budget, measures of
performance and specific events to be reached at
points in time
 Work Breakdown Structure
 Milestone: A specific event in a project E.g. the
completion of the design, the production of the
prototype, the completed testing of a prototype, etc.
 Activities: Pieces of work that consume time. E.g.
waiting for paint to dry may be an activity in a
project. Activities needed to be defined in such a way
that when they are all completed, the project is done.
 Gantt Chart
 Gantt Chart shows the amount of time involved and
the sequence in which activities are to be performed.
 Named after Henry L. Gantt who applied this type
of chart to shipbuilding during World War I
 3-19

Gantt Chart
Vertical Axis: Always
Activities or Jobs Horizontal bars used to denote length of time
for each activity or job.

Activity 1

Activity 2

Activity 3

Activity 4

Activity 5

Activity 6
Time
Horizontal Axis: Always Time
 Network Planning Models
 Critical Path Method (CPM)
– Developed for scheduling maintenance shutdowns at Du
Pont.
– Based on the assumption that activity time can be
estimated accurately and they do not vary
 Program Evaluation & Review Technique (PERT)
– Developed for the U.S. Navy’s Polaris missile project
– It was developed to handle uncertain time estimates
 Network Planning Models
 A project is made up of a sequence of activities that
form a network representing a project
 The path taking longest time through this network of
activities is called the “Critical Path”
 If any activity on the critical Path Critical Path is
delayed, then the entire project will be delayed
 CPM helps to identify the critical path(s) in the
project networks
 HISTORY OF PERT/CPM
Developed by the
US Navy for the
planning and
Developed by Du
Pont to solve
project
control of the
scheduling
Polaris missile
problems
program

The emphasis was

The emphasis was
on the trade-off
on completing the
between the cost
program in the
of the project and
shortest possible
PERT its overall CPM
time.
completion time
 Why PERT/CPM?
• Prediction of deliverables
• Planning resource requirements
• Controlling resource allocation
• Internal program review
• External program review
• Performance evaluation
• Uniform wide acceptance
APPLICATIONS OF PERT/CPM TECHNIQUES

•Construction of a Dam or Canal

•Construction of a building or highway

•Maintenance or Overhaul of aircrafts

•Space Flights

•Designing a Prototype of a Machine

•Development of Supersonic Planes
 Prerequisites for Critical Path
Methodology

1) Well-defined jobs or tasks whose completion marks

the end of the project
2) Independent jobs or task
3) Tasks that follow a given sequence
 Types of Critical Path Methods
CPM with a Single Time Estimate
– Used when activity times are known with certainty
– Used to determine timing estimates for the project, each
activity in the project, and slack time for activities
CPM with Three Activity Time Estimates
– Used when activity times are uncertain
– Used to obtain the same information as the Single Time
Estimate model and probability information
Time-Cost Models
– Used when cost trade-off information is a major
consideration in planning
– Used to determine the least cost in reducing total project
time
Steps in PERT/CPM
 Framework for PERT and CPM
• Define the Project. The Project should have only a
single start activity and a single finish activity.
• Develop the relationships among the activities.
• Draw the "Network" connecting all the activities.
• Assign time and/or cost estimates to each activity
• Compute the critical path.
• Use the Network to help plan, schedule, monitor
and control the project.
Steps in the CPM with Single Time Estimate

1. Activity Identification
2. Activity Sequencing and Network Construction
 Activity on Node (AON)
 Activity on arrow (AOA)
3. Determine the critical path
– From the critical path all of the project and activity timing
information can be obtained
CPM - Critical Path Method

Drafting the design of Program or Project

Evaluation of drafted Program or Project

Review of evaluated Program or Project

 PERT -
Project Evaluation & Review Techniques

To analyze and represent the tasks involved in

completing a given project

Accommodates the variation in event completion time

Event-oriented technique rather than start- and

completion-oriented

Commonly used in conjunction with the critical path

method
Basic Terms In Network Analysis

Activity

Event

Constraints

Network Diagram

Critical Path
Comparison Between PERT & CPM
Both are Quantitative Techniques of Network Analysis

Both are used as tools for Decision Making

Both involve drawing & analysis of Network Diagram on

various scores
Difference Between PERT & CPM
PERT CPM
Probabilistic Model

Deterministic Model
Non-repetitive Jobs like planning & scheduling of programmes

Repetitive Jobs like residential construction

Results calculated on basis of Events

Related with activities of uncertain time Results calculated on basis of activities

Related with activities of Well Known time

 Advantages of PERT/CPM

Reduction in cost

• Elimination of Risk in Complex activity

Flexibility

• Optimisation of Resources

Reduction of Uncertainties
 Disadvantages of PERT/CPM

Network charts tend to be large

Lack of a timeframe on most PERT/CPM charts makes it harder to show status

When PERT/CPM charts become unwieldy, they are no longer used to manage the
project

Planning & Implementation required skillful personnel

 3-37

CPM with Single Time Estimate

Consider the following consulting project:
Activity Designation Immed. Pred. Time (Weeks)
Assess customer's needs A None 2
Write and submit proposal B A 1
Obtain approval C B 1
Develop service vision and goals D C 2
Train employees E C 5
Quality improvement pilot groups F D, E 5
Write assessment report G F 1

Develop a critical path diagram and determine the duration

of the critical path and slack times for all activities.
 CPM with Single Time Estimate
AOA Network
Nodes Activity Time
1-2 A 4
1-3 B 3
2-4 C 2
3-5 D 6
4-5 E 4

Develop a critical path diagram and determine the duration

of the critical path and slack times for all activities.
Problem 1 (AON Network)
Activity Time (Weeks) Immediate Predecessor
A 6 -
B 3 A
C 7 A
D 2 C
E 4 B, D
F 3 D
G 7 E, F

a) Draw Critical Path Diagram and find the critical path.

b) How many weeks will it take to complete the project?
c) How much slack does each activity have?
Problem 2 (AOA Network)
Nodes Activity Time (Weeks) Precedence
1-2 A 3 -
1-3 B 7 -
1-4 C 6 -
2-5 D 4 A
2-7 E 5 A
2-3 F 4 A
3-4 G 5 B, F
3-7 H 4 B, F
4-7 I 2 C, G
4-6 J 4 C, G

a) Draw Critical Path Diagram and find the critical path

b) How many weeks will it take to complete the project?
c) Find out slack for each activity.
Problem 3
Activity Time (Weeks) Immediate Predecessor
A 3 -
B 3 A
C 4 A
D 4 A
E 6 B
F 6 C, D
G 2 D, F
H 3 D
I 3 E, G, H

a) Draw Critical Path Diagram and find the critical path

b) Suppose you want to shorten the completion time as much as possible and
you have the option of shortening any or all of B, C, D and G each one
week. Which one would you shorten?
c) Which is the new critical path and earliest completion time?
 Problem 4
Activity Immediate Predecessor Time (Weeks)
1 - 4
2 1 2
3 1 4
4 1 3
5 2, 3 5
6 3 6
7 4 2
8 5 3
9 6, 7 5
10 8, 9 7

a) Draw the network Diagram and find the critical path

b) If activity 1 and 10 cannot be shortened, but activities 2-9 can be shortened to a
minimum of one week each at a cost of $10,000 per week, which activities
would you shorten to cut the project by 4 weeks?
 CPM with Three Time Estimate
Opt. Time + 4(Most Likely Time) + Pess. Time
Expected Time =
6

ET(A)= a+4(m)+b D - TE
Z =
6  cp
 2

2 P essim . - O p tim . 2
A c tiv ity v arian c e,  = ( )
6
 Problem 5
Predecessor Time (Days)
a m b
1-2 2 5 8
1-4 4 19 28
1-5 5 11 17
2-3 3 9 27
2-6 3 6 15
3-6 2 5 14
4-6 3 6 15
5-7 1 4 7
5-8 2 5 14
6-8 6 12 30
7-8 2 5 8

Draw network diagram, find out critical path and slack for each activity.
What is the probability of completing the project within 40 days?
Problem 6
• A project has an expected duration of 34
weeks with critical path variance of 6. What is
the probability that the project can be
completed in 32 weeks or less? What is the
probability that the project will take more than
38 weeks to complete?
Problem 7
Activity Immediate Time (Days)
Predecessor
a m b

A - 1 3 5
B - 1 2 3
C A 1 2 3
D A 2 3 4
E B 3 4 11
F C, D 3 4 5
G D, E 1 4 6
H F, G 2 4 5

a) Draw the network diagram and find the critical path.

b) What is the expected project completion time?
c) What is the probability of completing this project within 16
days?
Problem 8
Job Predecessor Time (Days)
a m b
1 - 2 3 4
2 1 1 2 3
3 1 4 5 12
4 1 3 4 11
5 2 1 3 5
6 3 1 2 3
7 4 1 8 9
8 5, 6 2 4 6
9 8 2 4 12
10 7 3 4 5
11 9, 10 6 7 8
Problem 8
1) Construct appropriate network diagram and find out the
critical path
2) What is the expected completion time for the project?
3) You can accomplish any one of the following at an
additional cost of Rs. 1,500:
a. Reduce Job 5 by two days
b. Reduce Job 3 by two days
c. Reduce Job 7 by two days
If you will save Rs. 1,000 for each day that the earliest completion
time is reduced, which action, if any, would you choose?
4) What is the probability that the project will take more
than 30 days to complete?
 Time-Cost Models
• Following are the step for solving time-cost sums:
Step1: Draw the critical path and find out the
critical time
Step 2: Calculate the cost slope for each activity.
Cost Slope = (C.C-N.C)/(N.T-C.T)
Step 3: Replace normal time with crash time on
the critical path considering the cost of each
 Problem 9
Activity Immediate Normal Normal Crash Time Crash Cost
Pred. Time Cost
A - 5 7,000 3 13,000
B A 10 12,000 7 18,000
C A 8 5,000 7 7,000
D B 6 4,000 5 5,000
E C 7 3,000 6 6,000
F C 4 6,000 3 7,000
G D, E, F 4 7,000 3 9,000

a) Determine the critical path and the early completion time for the project.
b) For the data shown, reduce the project completion time by 3 weeks.
Assume a linear cost per week shortened and show, step by step, how
you arrived at your schedule.
Problem 10
Activity Normal Time Crash Time Normal Cost Crash Cost
(Weeks) (Weeks)
1-2 6 4 10,000 14,000
1-3 4 3 5,000 8,000
2-4 3 2 4,000 5,000
3-5 8 6 9,000 12,000
4-5 7 4 7,000 8,000

a) Draw a CPM network diagram for normal time estimates. Calculate

earliest finish, latest start and slack for each activity.
b) Determine the critical path and the duration of completion of project.
c) Develop a cost-time trade-off analysis. Crash the project to its
minimum duration at the lowest cost.
Problem 11
Activity Normal Time Crash Time Normal Cost Crash Cost
A 7 6 7,000 8,000
B 2 1 5,000 7,000
C 4 3 9,000 10,200
D 5 4 3,000 4,500
E 2 1 2,000 3,000
F 4 2 4,000 7,000
G 5 4 5,000 8,000

a) Identify the critical path and project completion time.

b) Which activities would you shorten to cut 2 weeks from the
schedule in a rational fashion? What would be the incremental
cost? Is the critical path changed after crashing?
Problem 12
Bragg’s Bakery is building a new automated bakery. Here are the
activities that need to be completed to get the new bakery built and the
equipment installed.
Activity Predecessor Normal Time Crash Time Cost/Week
A - 9 6 3,000
B A 8 5 3,500
C A 15 10 4,000
D B, C 5 3 2,000
E C 10 6 2,500
F D, E 2 1 5,000

a) Find the critical path and the project completion time.

b) What is the project length if all the activities are crashed to their minimum?
c) Bragg’s loses $3,500 in profit per week for every week the bakery is not
completed. How many weeks will the project take if we are willing to pay
crashing cost as long as it is less than $ 3,500?