3

Managing Projects

PowerPoint presentation to accompany

Heizer, Render, and Al-Zu
bi
Operations Management, Arab World Edition
Original PowerPoint slides by Jeff Heyl
Adapted by Zu
bi Al-Zu
bi

3-1

O u t l in e

Company Profile: Arabtec Construction

LLC
The Importance of Project Management
Project Planning
The Project Manager
Work Breakdown Structure
Project Scheduling
3-2
1

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

Determining the Project Schedule

- Forward Pass
- Backward Pass
- Calculating Slack Time and Identifying the
Critical Path(s)
- Variability in Activity Times
- Three Time Estimates in PERT
- Probability of Project Completion
3-4
1

O u t l i n e - Co n t i n u e d

Cost-Time Trade-Offs and Project

Crashing
A Critique of PERT and CPM
Using Microsoft Project to Manage
Projects

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

1. Planning - goal setting, defining

the project, team organization
2. Scheduling - relates people,
money, and supplies to specific
activities and activities to each
other
3. Controlling - monitors resources,
costs, quality, and budgets;
revises plans and shifts resources
to meet time and cost demands
3 - 13
1

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

u Often temporary structure

u Uses specialists from entire company
u Headed by project manager
uCoordinates activities
uMonitors schedule and costs
u Permanent structure called
matrix
organization
3 - 21
1

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

1. Work can be defined with a specific goal

and deadline
2. The job is unique or somewhat unfamiliar
to the existing organization
3. The work contains complex interrelated
tasks requiring specialized skills
4. The project is temporary but critical to the
organization
5. The project cuts across organizational
lines
3 - 22
1

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

Project managers should be:

u Good coaches
u Good communicators
u Able to organize activities from a variety of
disciplines

3 - 25
1

Et h i c a l I s s u e s

u Project managers face many ethical

decisions on a daily basis
u The Project Management Institute has
established an ethical code to deal with
problems such as:
1. Offers of gifts from contractors
2. Pressure to alter status reports to mask delays
3. False reports for charges of time and expenses
4. Pressure to compromise quality to meet
schedules
3 - 26
1

W o r k B re a k d o w n Str u ct u re

Level
1.

Project

2. Major tasks in the project

3. Subtasks in the major tasks
4. Activities (or work packages)
to be completed

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

u Identifying precedence relationships

u Sequencing activities
u Determining activity times & costs
u Estimating material & worker
requirements
u Determining
u critical activities

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

1. Shows the relationship of each activity

to others and to the whole project
2. Identifies the precedence relationships
among activities
3. Encourages the setting of realistic time
and cost estimates for each activity
4. Helps make better use of people,
money, and material resources by
identifying critical bottlenecks in the
project
3 - 30
1

Sc h e d u l i n g T e c h n i q u e s

1. All activities are planned for

2. Their order of performance is
accounted for
3. The activity time estimates are
recorded
4. The overall project time is
developed

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

1. Define the project and prepare

the work breakdown structure
2. Develop relationships among the
activities - decide which activities
must precede and which must
follow others
3. Draw the network connecting all
of the activities
3 - 37
1

Si x Ste p s P E R T & C P M

4. Assign time and/or cost estimates

to each activity
5. Compute the longest time path
through the network this is
called the critical path
6. Use the network to help plan,
schedule, monitor, and control the
project
3 - 38
1

Q u e s t i o n s P E R T & CP M
Ca n A n s w e r

1. When will the entire project be

completed?
2. What are the critical activities or tasks
in the project?
3. Which are the noncritical activities?
4. What is the probability the project will
be completed by a specific date?
3 - 39
1

Q u e s t i o n s P E R T & CP M
Ca n A n s w e r

5. Is the project on schedule, behind

schedule, or ahead of schedule?
6. Is the money spent equal to, less than,
or greater than the budget?
7. Are there enough resources available
to finish the project on time?
8. If the project must be finished in a
shorter time, what is the way to
accomplish this at least cost?
3 - 40
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)
(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

Cai r o Fi n es t Pap er Mil l s '

A c t i v i t i es an d Pr ed ec es s o r s
Activity
A

Description
Build internal components

Table 3.1

Immediate
Predecessors

Modify roof and floor

Construct collection stack

Pour concrete and install frame

A, B

Build high-temperature burner

Install pollution control system

Install air pollution device

D, E

Inspect and test

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

Arrows Show Precedence

Relationships

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

LF = Min(LS of following activity)

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

After computing the ES, EF, LS, and LF times

for all activities, compute the slack or free
time for each activity
u Slack is the length of time an activity can
be delayed without delaying the entire
project
Slack = LS ES

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

u CPM assumes we know a fixed time

estimate for each activity and there
is no variability in activity times
u PERT uses a probability distribution
for activity times to allow for
variability

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

u Three time estimates are required

u Optimistic time (a) if everything
goes according to plan
u Pessimistic time (b) assuming
very
unfavorable conditions
u Most likely time (m) most
realistic estimate
3 - 74
1

V a r i a b il i t y i n A c t iv i ty T i m e s

Estimate follows beta distribution

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

Estimate follows beta distribution

Figure 3.12

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

= .11 + .11 + 1.00 + 1.78 + .11 = 3.11

Project standard deviation

p

Project variance

3.11 = 1.76 weeks

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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

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

Standard deviation = 1.76 weeks

15 Weeks
Figure 3.13

(Expected Completion Time)

3 - 81
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?
due
expected date
Z = date of completion /s

= (16 wks 15 wks)/1.76

= 0.57

Where Z is the number of

standard deviations the due
date or target date lies from
the mean or expected date

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

= (16 wks 15 wks)/1.76

= 0.57

2013 Pears on Educat ion

Where Z is the number of

standard deviations the due
date or target date lies from
the mean or expected date
3 - 83
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

Probability
(T 16 weeks)
is 71.57%

0.57 Standard deviations

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
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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

u Variability of times for activities

on noncritical paths must be
considered when finding the
probability of finishing in a
specified time
u Variation in noncritical activity
may cause change in critical
path
3 - 86
1

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
3 - 87
1

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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1

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

u The amount by which an activity

is crashed is, in fact, possible
u Taken together, the shortened
activity durations will make it
possible to finish the project by
the due date
u The total cost of crashing is as
small as possible
3 - 89
1

St e p s i n P r o j e c t C r a s h i n g

1. Compute the crash cost per time period.

If crash costs are linear over time:
(Crash cost Normal cost)
Crash cost
per period =
(Normal time Crash time)
1. Using current activity times, find the
critical path and identify the critical
activities

3 - 90
1

St e p s i n P r o j e c t C r a s h i n g

2. If there is only one critical path, then

select the activity on this critical path that
(a) can still be crashed, and (b) has the
smallest crash cost per period. If there is
more than one critical path, then select
one activity from each critical path such
that (a) each selected activity can still be
crashed, and (b) the total crash cost of all
selected activities is the smallest. Note
that the same activity may be common to
more than one critical path.
3 - 91
1

St e p s i n P r o j e c t C r a s h i n g

3. Update all activity times. If the desired

due date has been reached, stop. If not,
return to Step 2.

3 - 92
1

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

Crash Cost Critical

Crash Per Wk ($) Path?

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
3 - 93
1

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)
3 - 94
1

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
3 - 95
1

A d v a n t a g e s o f P E R T / CP M

1. Especially useful when scheduling

and controlling large projects
2. Straightforward concept and not
mathematically complex
3. Graphical networks help highlight
relationships among project
activities
4. Critical path and slack time
analyses help pinpoint activities
that need to be closely watched
3 - 96
1

A d v a n t a g e s o f P E R T / CP M

5. Project documentation and graphics

point out who is responsible for various
activities
6. Applicable to a wide variety of projects
7. Useful in monitoring not only schedules
but costs as well

3 - 97
1

L i m i t a t io n s of P E R T/ C P M

1. Project activities have to be clearly defined,

independent, and stable in their
relationships
2. Precedence relationships must be specified
and networked together
3. Time estimates tend to be subjective and
are subject to fudging by managers
4. There is an inherent danger of too much
emphasis being placed on the longest, or
critical, path
3 - 98
1

P r o j e c t M a n a g e m e n t So f t w a r e

uThere are several popular packages

for managing projects
u Primavera
u MacProject
u Pertmaster
u VisiSchedule
u Time Line
u Microsoft Project
3 - 99
1

Us i n g M i c r o so f t P r o j e c t

Program 3.1
3 - 100
1

Us i n g M i c r o so f t P r o j e c t

Program 3.2
3 - 101
1

Us i n g M i c r o so f t P r o j e c t

Program 3.3
3 - 102
1