1. 1
Project Management

2. 2
OBJECTIVES
 Definition of Project Management
 Work Breakdown Structure
 Project Control Charts
 Structuring Projects
 Critical Path Scheduling

3. 3
Project Management
Defined
 Project is a series of related jobs usually
directed towards 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

4. 4
Introduction to Project
Management
 Definition of Project Management
– A project can be defined as a group of tasks – which helps in
achieving an objective
– A Project : undertaken to solve a problem.
– Project Management – the process of planning, directing and
controlling resources to meet the technical, cost and time
considerations of a project.
– Project Management – as a Conversion Process.

5. 5
The Definition of a “PROJECT”
• Purpose – Usually a one-time activity with a well-defined
set of desired end result.
• Life Cycle- From a slow beginning they progress to a
buildup of size, then peak, finally terminate.
• Interdependencies- Projects always interact with the
parent organization’s standard, ongoing operations.
• Uniqueness - Every Project has some elements that
are unique. (No two Construction or R & D projects are
precisely alike.)

6. 6
Project Vs. Routine Activities
 Project is a one time activity
 It involves large investments
 No revenue till the project is completed
 High degree & Wide variety of skills are used.
 Involves experts from various divisions of the company,
consultants & a number of contractors.
 A systematic approach to problem solving – special
techniques used.
 Usage of special purpose equipments – in some cases
 Deals with planning, scheduling, controlling
simuttaneously with the objective of timely completion of
the project.

7. 7
Pure Project
A pure project is where a self-contained team
works full-time on the project
Structuring Projects / Pure
Project: Advantages
 The project manager has full authority
over the project
 Team members report to one boss
 Shortened communication lines
 Team pride, motivation, and commitment
are high

8. 8
Structuring Projects / Pure
Project: Disadvantages
 Duplication of resources
 Organizational goals and policies
are ignored
 Lack of technology transfer
 Team members have no functional
area "home"

9. 9
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
Example, Project “B” is in the functional
area of Research and Development.

10. 10
Structuring Projects
Functional Project :
Advantages
 A team member can work on
several projects
 Technical expertise is maintained
within the functional area
 The functional area is a “home”
after the project is completed
 Critical mass of specialized
knowledge

11. Structuring Projects 11
Functional Project:
Disadvantages
 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

12. 12
Matrix Project / Organisation
Structure
President
Research and
Engineering Manufacturing Marketing
Development
Manager
Project A
Manager
Project B
Manager
Project C

13. 13
Structuring Projects /
Matrix: Advantages
 Enhanced communications between functional
areas
 Pinpointed responsibility
 Duplication of resources is minimized
 Functional “home” for team members
 Policies of the parent organization are followed

14. 14
Structuring Projects /
Matrix: Disadvantages
 Too many bosses
 Depends on project manager’s
negotiating skills
 Potential for sub-optimization

15. 15
Gantt Chart
Vertical Axis:
Always Activities Horizontal bars used to denote length
or Jobs of time for each activity or job.
Activity 1
Activity 2
Activity 3
Activity 4
Activity 5
Activity 6
Time Horizontal Axis: Always Time

16. 16
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

17. 17
Networ k Dia g rams
1/2/3/4/5 are Events
A/B/C/D/E are Activities.

18. 18
Networ k Dia g rams

19. 19
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”
 The critical path provides a wide range of scheduling
information useful in managing a project
 Critical Path Method (CPM) helps to identify the
critical path(s) in the project networks

20. 20
Prerequisites for Critical
Path Methodology
A project must have:
well-defined jobs or tasks whose
completion marks the end of the project;
independent jobs or tasks;
and tasks that follow a given sequence.

21. Types of Critical Path
21
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

22. 22
Steps in the CPM with
Single Time Estimate
 1. Activity Identification
 2. Activity Sequencing and Network
Construction
 3. Determine the critical path
– From the critical path all of the project
and activity timing information can be
obtained

23. 23
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.

24. 24
First draw the network
Act. Imed. Pred. Time
A None 2
B A 1
C B 1
D C 2
E C 5
F D,E 5
D(2)
G F 1
A(2) B(1) C(1) F(5) G(1)
E(5)

25. 25
Determine early starts and early
finish times
ES=4
EF=6
ES=0 ES=2 ES=3 D(2)
ES=9 ES=14
EF=2 EF=3 EF=4 EF=14 EF=15
A(2) B(1) C(1) F(5) G(1)
ES=4
EF=9
Hint: Start with ES=0
and go forward in the E(5)
network from A to G.

26. Determine 26
late starts Hint: Start with LF=15
and late or the total time of the
project and go
finish times ES=4
backward in the
EF=6
network from G to A.
ES=0 ES=2 ES=3 D(2)
ES=9 ES=14
EF=2 EF=3 EF=4 LS=7 EF=14 EF=15
LF=9
A(2) B(1) C(1) F(5) G(1)
ES=4
LS=0 LS=2 LS=3 EF=9 LS=9 LS=14
LF=2 LF=3 LF=4 LF=14 LF=15
E(5)
LS=4
LF=9

27. 27
Critical Path & Slack
ES=4
Slack=(7-4)=(9-6)= 3 Wks
EF=6
ES=0 ES=2 ES=3 D(2)
ES=9 ES=14
EF=2 EF=3 EF=4 LS=7 EF=14 EF=15
LF=9
A(2) B(1) C(1) F(5) G(1)
ES=4
LS=0 LS=2 LS=3 EF=9 LS=9 LS=14
LF=2 LF=3 LF=4 LF=14 LF=15
E(5)
LS=4 Duration=15 weeks
LF=9

28. 28
Program Evaluation & Review
Technique (PERT)
 PERT is Event oriented & CPM is Activity oriented.
 PERT is used to deal unit uncertainty.
 PERT has 3 time estimates – Optimistic time
– Most likely time.
– Pessimistic time.
 PERT has one or more activities follow a probability
distribution – taking into account the uncertainty of the
situation.
 PERT network provides a measure of the probability of
project completion by the scheduled date.
 The probability concept – Only associated with PERT
and not CPM.
(time estimates in CPM are deterministic & not
probabilistic)

29. 29
Example 2. CPM with Three
Activity Time Estimates
Immediate
Task Predecesors Optimistic Most Likely Pessimistic
A None 3 6 15
B None 2 4 14
C A 6 12 30
D A 2 5 8
E C 5 11 17
F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28

30. 30
Example 2. Expected
Time Calculations
ET(A)= 3+4(6)+15
Immediate Expected 6
Task Predecesors Time
A None 7 ET(A)=42/6=7
B None 5.333
C A 14 Immediate
Task Predecesors Optimistic Most Likely Pessimistic
D A 5 A None 3 6 15
E C 11 B
C
None
A
2
6
4
12
14
30
F D 7 D A 2 5 8
E C 5 11 17
G B 11 F D 3 6 15
H E,F 4 G B 3 9 27
H E,F 1 4 7
I G,H 18 I G,H 4 19 28
Opt. Time + 4(Most Likely Time) + Pess. Time
Expected Time =
6

31. 31
Ex. 2. Expected Time
Calculations
Immediate Expected ET(B)= 2+4(4)+14
Task Predecesors Time 6
A None 7
B None 5.333 ET(B)=32/6=5.333
C A 14
D A 5 Immediate
E C 11 Task Predecesors Optimistic Most Likely Pessimistic
A None 3 6 15
F D 7 B None 2 4 14
G B 11 C
D
A
A
6
2
12
5
30
8
H E,F 4 E C 5 11 17
F D 3 6 15
I G,H 18 G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28
Opt. Time + 4(Most Likely Time) + Pess. Time
Expected Time =
6

32. Ex 2. Expected Time 32
Calculations
Immediate Expected ET(C)= 6+4(12)+30
Task Predecesors Time
A None 7 6
B None 5.333
C A 14 ET(C)=84/6=14
D A 5
E C 11 Immediate
Task Predecesors Optimistic Most Likely Pessimistic
F D 7 A None 3 6 15
G B 11 B
C
None
A
2
6
4
12
14
30
H E,F 4 D A 2 5 8
E C 5 11 17
I G,H 18 F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28
Opt. Time + 4(Most Likely Time) + Pess. Time
Expected Time =
6

33. 33
Example 2. Network
Duration = 54 Days
C(14) E(11)
A(7) H(4)
D(5) F(7)
I(18)
B G(11)
(5.333)

34. 34
Example 2. Probability
Exercise
What is the probability of finishing this project in
less than 53 days?
p(t < D)
D=53
t
TE = 54
D - TE
Z =
∑ σ cp 2

35. 35
Pessim. - Optim. 2
Activity variance, σ = (
2
)
6
Task Optimistic Most Likely Pessimistic Variance
A 3 6 15 4
B 2 4 14
C 6 12 30 16
D 2 5 8
E 5 11 17 4
F 3 6 15
G 3 9 27
H 1 4 7 1
I 4 19 28 16
(Sum the variance along the critical ∑ σ 2 = 41
path.)

36. 36
p(t < D)
t
D=53 TE = 54
D - TE 53- 54
Z = = = -.156
∑σ cp
2 41
p(Z < -.156) = .438, or 43.8 % (NORMSDIST(-.156)
There is a 43.8% probability that this project will be
completed in less than 53 weeks.

37. 37
Ex 2. Additional Probability
Exercise
 What is the probability that the
project duration will exceed 56
weeks?

38. 38
Example 2. Additional
Exercise Solution
p(t < D)
t
TE = 54
D=56
D - TE 56 - 54
Z = = = .312
∑σ cp
2 41
p(Z > .312) = .378, or 37.8 % (1-NORMSDIST(.312))

39. 39
Time-Cost Models
 Basic Assumption: Relationship
between activity completion time
and project cost
 Time Cost Models: Determine the
optimum point in time-cost
tradeoffs
– Activity direct costs
– Project indirect costs
– Activity completion times

40. 40
Networ k Crashing (Project
 Determine the timeCrashing) each activity in the
– cost ratio for
network – this ratio represents the increase in cost for a
unit decrease in time.
Time – Cost Ratio = crash cost – normal cost
normal time – crash time
 Identify the activities on critical path & select that activity
which has smallest time cost ratio – crash that activity to
the extent possible.
 Observe any change in the critical path – any other path
becomes critical – calculate time cost ratio in the new
critical path.
 Repeat above steps – till the activities are crashed to
reduce the present duration to the desired time period.

41. CPM Assumptions / 41
Limitations
 Project activities can be identified as entities
(There is a clear beginning and ending point
for each activity.)
 Project activity sequence relationships can be
specified and networked
 Project control should focus on the critical
path
 The activity times follow the beta distribution,
with the variance of the project assumed to
equal the sum of the variances along the
critical path

42. 42
Question Bowl
Which of the following are examples
of Graphic Project Charts?
b. Gantt
c. Bar
d. Milestone
e. All of the above
f. None of the above
Answer: d. All of the above

43. 43
Question Bowl
Which of the following are one of the
three organizational structures of
projects?
b. Pure
c. Functional
d. Matrix
e. All of the above
f. None of the above
Answer: d. All of the above

44. 44
Question Bowl
A project starts with a written description of the
objectives to be achieved, with a brief statement
of the work to be done and a proposed schedule
all contained in which of the following?
b. SOW
c. WBS
d. Early Start Schedule
e. Late Start Schedule
f. None of the above
Answer: a. SOW (or Statement of Work)

45. 45
Question Bowl
For some activities in a project there may
be some leeway from when an activity can
start and when it must finish. What is this
period of time called when using the Critical
Path Method?
b. Early start time
c. Late start time
d. Slack time
e. All of the above
f. None of the above
Answer: c. Slack time

46. 46
Question Bowl
How much “slack time” is permitted in the “critical
path” activity times?
b. Only one unit of time per activity
c. No slack time is permitted
d. As much as the maximum activity time in the
network
e. As much as is necessary to add up to the total
time of the project
f. None of the above
Answer: b. No slack time is permitted (All
critical path activities must have zero slack
time, otherwise they would not be critical to
the project completion time.)

47. 47
Question Bowl
When looking at the Time-Cost Trade Offs in the
Minimum-Cost Scheduling time-cost model,
we seek to reduce the total time of a project
by doing what to the least-cost activity
choices? Answer: a. Crashing
b. Crashing them them (We “crash” the
c. Adding slack time least-cost activity
d. Subtracting slack time times to seek a reduced
e. Adding project time total time for the
f. None of the above entire project and we
do it step-wise as
inexpensively as
possible.)