Chapter 3 – Project

Management

Characteristics, tools, Pert/CPM,

critical path, slack calculation,
crashing

Rev. 11/08/01 SJSU Bus. 140 - David Bentley 1

 Project Characteristics
 Definite beginning
 Definite end
 Long duration (often months or years)
 Very low product quantity
 Very high variety of tasks
 Multiple tasks often being performed
concurrently
Rev. 11/27/01 SJSU Bus. 140 - David Bentley 2
 Project Management Tools
 Work Breakdown Structure
 Network diagramming
 CPM (Catalytic Construction & Dupont 1957)
 PERT (Booz Allen & Hamilton and U.S. Navy
1958)
 PERT/CPM combined over time
 Gantt Charts (Henry Gantt early 1900s)

Rev. 11/12/03 SJSU Bus. 140 - David Bentley 3

Operations Management, Seventh Edition, by William J. Stevenson
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Planning Complex Projects

- Work Breakdown Structure
Project
Project X
X

Level 1

Level 2

Level 3

Level 4

Rev. 12/06/04 SJSU Bus. 140 - David Bentley 4

 Network Diagram (PERT Chart)
C
E
6
3
D
B
12 5
End

Start 15 I
K
7
F 6

8
G
8
H J

9 14

11/28/05 SJSU Bus. 140 - David Bentley 5

Operations Management, Seventh Edition, by William J. Stevenson (Mod. 11/11/02 DAB)
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Planning Simple Projects

- Gantt Chart
Facility Move MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Locate new
facilities

Interview staff

Hire and train staff

Select and order

furniture

Remodel and install

phones

Move in/startup

Rev. 12/06/04 SJSU Bus. 140 - David Bentley 6

 PERT/CPM Conventions
 One starting point
 One ending point
 No looping back
 Activities and events
 Activity on arrows vs. activity on nodes
 “Dummy” activity used to preserve integrity
 Zero time and zero resources
 All activities entering a node must be complete
before starting the next activity
Rev. 09/06/01 SJSU Bus. 140 - David Bentley 7
Operations Management, Seventh Edition, by William J. Stevenson (Mod. 11/11/02 DAB)
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Activity-on-arrow Pert chart

Order
furniture 4
Furniture
Locate 2 setup
facilities
Remodel
1 5 6
Move
in
Interview
Hire and
train
3

11/11/02 SJSU Bus. 140 - David Bentley 8

Operations Management, Seventh Edition, by William J. Stevenson (Mod. 11/11/02 DAB)
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Activity-on-node Pert chart

Order
furniture
Locate Furniture
2 setup
facilities

1 6
Move
Remodel
in
S 5 7

Hire and
Interview
train

3 4

11/11/02 SJSU Bus. 140 - David Bentley 9

Operations Management, Seventh Edition, by William J. Stevenson
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Network Conventions
a
b
c a

c
b

a c
a c

b Dummy
activity
b d

Rev. 11/14/02 SJSU Bus. 140 - David Bentley 10

 PERT/CPM Steps - 1
 Develop the work breakdown structure
 Identify all tasks from the WBS; identify
resources
 Sequence tasks, determining dependency
 Estimate time duration of each task
 Single estimate vs. three estimates (O,P,M)
 Create the network (PERT) diagram

Rev. 11/27/05 SJSU Bus. 140 - David Bentley 11

 PERT/CPM Steps – 2a
 Identify critical path (see next slide)
 Determine ES, EF, LS, LF dates
 Calculate slack
 LS – ES or
 LF – EF
(Let’ define “critical
path” first)

Rev. 11/27/05 SJSU Bus. 140 - David Bentley 12

 Critical Path
 Longest duration path in project
 Determines the length of the overall project
 Slippage on critical path will delay project
completion
 Focus on shortening the critical path to
shorten the project
 “Crashing” may result in creation of new
critical path
Rev. 09/06/01 SJSU Bus. 140 - David Bentley 13
 Calculate path lengths and
Determine critical path
C
E
6
3
D
B
12 5
End

Start 15 I
K
7
F 6

8
G
8
H J

9 14

11/27/05 SJSU Bus. 140 - David Bentley 14

 Path Lengths (+ critical path)
Path Length

11/27/05 SJSU Bus. 140 - David Bentley 15

 PERT/CPM Steps – 2b
 After we identify the critical path…
 Determine ES, EF, LS, LF dates
 Calculate slack
 LS – ES or
 LF – EF

Rev. 11/27/05 SJSU Bus. 140 - David Bentley 16

 Calculate ES, LS, EF, LF and
Determine slack
C
E
6
3
D
B
12 5
End

Start 15 I
K
7
F 6

8
G
8
H J

9 14

11/27/05 SJSU Bus. 140 - David Bentley 17

 ES, LS, EF, LF, and Slack - 1
Activity ES EF LS LF Slack
F
H
J
K

11/27/05 SJSU Bus. 140 - David Bentley 18

 ES, LS, EF, LF, and Slack - 2
Activity ES EF LS LF Slack
A
B
C
E
D

11/27/05 SJSU Bus. 140 - David Bentley 19

 ES, LS, EF, LF, and Slack - 3
Activity ES EF LS LF Slack
G
I

11/27/05 SJSU Bus. 140 - David Bentley 20

 Crashing
 The compression of one or more tasks on the
critical path
 Why crash?
 Avoid penalties
 Earn incentives
 Cost-benefit trade-off analysis
 How crash?
 Additional resources
 Overtime
 Alternative processes
Rev. 11/12/03 SJSU Bus. 140 - David Bentley 21
 Controlling the Project
 PERT/CPM charts little use for control
 Gantt charts widely used
 Project cost reporting also useful
 Tools
 Microsoft Project
 Others

Rev. 11/12/03 SJSU Bus. 140 - David Bentley 22

Operations Management, Seventh Edition, by William J. Stevenson (Mod. 11/11/02 DAB)
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Controlling the Schedule

- Gantt Chart
Facility Move MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Locate new
facilities

Interview staff

Hire and train staff

Select and order

furniture

Remodel and install

phones

Move in/startup

12/06/04 SJSU Bus. 140 - David Bentley 23

What are the characteristics and qualities
of a good project manager?

11/28/05 SJSU Bus. 140 - David Bentley 24

 Characteristics/Qualities of a
Good Project Manager
 ______________
 ______________
 ______________
 ______________
 ________
 ________
 ________________
 ______________
 ______________
 ____________
 ____________
 ________
 ________

11/28/05 SJSU Bus. 140 - David Bentley 25