CH 17 Project Management

Chapter 17
Project Management
Sam Lampropoulos
George Brown College
Learning Objectives
• Discuss what a project is, its performance goals, and phases, and the nature of a
project manager’s job.
• Explain what is involved in project planning, how to plan to manage project risks,
and what work breakdown structure is.
• Explain what project scheduling is, how schedule Gantt charts are used in project
scheduling, and what PERT/CPM and a precedence network are.
• Use PERT/CPM technique with deterministic durations to schedule projects, and

solve typical problems.
• Determine path probabilities when durations are probabilistic, and solve typical
problems.
• Explain how to plan and manage project risks.
• Discuss project “crashing” and solve typical problems.
• Discuss project execution and control, and earned value analysis.
• Use Microsoft Project.
© 2021 McGraw-Hill Education Limited. 2

© 2018 McGraw-Hill Education Limited. All rights reserved.
Chapter Outline
▪ Introduction To Project
Management
▪ Project Planning
▪ Project Scheduling
▪ Deterministic Activity
Durations
▪ Probabilistic Activity
Durations
▪ Project Risks
▪ Cost Crashing
▪ Project Execution and
Control
▪ Project Management
Software
Projects
▪ Unique, multi-person, one-time operation
▪ Specific set of objectives
▪ Limited time frame
JAN FEB MAR APR MAY JUN
Build A
A Done
Program: A set Build B
of projects. B Done
Build C
C Done
On time!
Build D
Ship
© 2021 McGraw-Hill Education Limited.

4
Examples of Projects
❖ Building Construction
❖ Research Project
❖ System, software, new
product development
❖ Event

5
https://www.sitecproject.com/overview
Project Life Cycle

Project Phases
Project Initiation
Conception Feasibility Study Selection
Planning and Scheduling

Determine
Activity breakdown Schedule/subcontract
resources/costs/risks
Execution and control

Purchase Monitor Adjust
Closeout
Ensure completion Paperwork Review

8
Project Management
▪ Project scope: The work that needs to be
accomplished to deliver a good or service, the
specific objective of the project.
▪ Project portfolio selection: Deciding which
projects to implement.
▪ Work breakdown structure (WBS): A
hierarchical listing of components of a project.

9
▪ Saskatoon Police Station Headquarters
▪ Page 684

10
Project Management Organizational
Structure
▪ Project-based organizational structure
• Organizational structure where a company’s
departments and personnel are organized
around each particular project
▪ Matrix organization
• Organizational structure that temporarily groups
together specialists from different departments
to work on special projects

11
Organizational Structures

Project Based Structure
Project Team of people,

Initiator/Sponsor with diverse
• Creates project scope knowledge and
skills, contributing
as needed
Influenced by
strategy, policy, Output (deliverable)
culture, etc.

13
Matrix Organization Structure
Top Mgmt
Accounting Engineering Operations Marketing
Manager
Project A
Manager
Project B
Manager
Project C

14
▪ Pacific Blues Cross
▪ Page 688

15
Performance Goals
Complete
the project
within
Time/ schedule Performance/

quality guidelines
Cost/ budget

16
Project Management Triangle

17
Project Manager
Responsible for:
Work Quality
Human Resources Time
Communications Costs

18
Project Manager’s Abilities
handle
failure
lead and fear solve
monitor
details problems
deal with
make trade- expedite obstacles
off decisions work
manage
conflict
build a
team
motivate

19
Ethical Issues
Temptation to
understate
costs
Approving Withhold
substandard information
work
Comprising
Misleading
workers’
status reports
safety
Falsifying
records
20
Project Planning
Project
Planning
involves further
Risk Schedules
elaboration of Management
the project
scope.
HR and
Quality Resource
Planning
Communica-
tions

21
▪ Tim Hortons
▪ Page 690

22
Project Planning
▪ Project planning
• Analyzing the project into work packages and activities,
estimating resources, durations, scheduling, etc.
▪ Quality planning
• How project and product quality is to be assured and
controlled
▪ Communications planning
• Determining the nature of information needed by
stakeholders and how to satisfy these needs
▪ Purchase planning
• What to purchase, specifications, supplier evaluation
and selection, awarding contracts
23
Project Management Tools
 Work Breakdown Structure (WBS)
 Gantt chart
 CPM/PERT
 Software
(e.g., Microsoft Project)

24
Work Breakdown Structure (WBS)
WBS
▪ A hierarchical listing of what must be done , components of
a project.
• Establishes a logical framework for identifying the
required activities for the project
1. Identify the major components of the project
2. Identify the major subcomponents
3. Break down subcomponents into work
packages
4. Break down each work package into a list of the
activities that will be needed to accomplish it

25
WBS
Activity:
Another
name for a
work package
in a project.
Figure 17-1
Work Package
• A group of related tasks within a project.
• The smallest unit of work that a project can be broken
down to when creating your work breakdown structure.
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Introduction to Project Scheduling
Determining the start and end times of activities/work
packages in the work breakdown structure.
List Activities List activities defined in WBS
Sequence Identify logical sequential activities
Resources Identify resources needed for each activity
Duration Identify duration of each activity
Schedule Develop schedule using PERT/CPM
Modify Modify as needed (level, compress, etc.)

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Gantt Chart
Figure 17-2
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PERT and CPM
PERT (program evaluation and review technique) and CPM (critical
path method).
• Techniques used to schedule and control large projects
Which activities
Estimate of most critical to
project length timely
completion
Graphical
How long any
display of
activity can
activities in
be delayed
sequence
Provides:

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The Precedence Network Diagram
▪ Precedence Network:
• Diagram of project activities that shows sequential
relationships by use of arrows and nodes
▪ Activity on arrow (AOA):
• Network in which arrows designate activities
▪ Activity on node (AON):
• Network in which nodes designate activities
▪ Path:
• A sequence of activities that leads from the starting
node to the finishing node
Figure 17-3
32
Network Conventions
Figure 17-4

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Precedence Network
▪ Critical path:
• The longest path from start to end
• Determines expected project duration
▪ Critical activities:
• Activities on the critical path
▪ Path slack time:
• Allowable slippage for a path
• Difference between length of a path -- length of
critical path

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Example: Precedence Network
Critical Path
Path Length (weeks) Path Slack (weeks)

S-1-2-6-7 8 + 6 + 3 + 1 = 18 20 − 18 = 2
S-1-5-7 8 + 11 + 1 + 20 20 − 20 = 0
S-3-4-7 4 + 9 + 1 = 14 20 − 14 = 6
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Deterministic Activity Durations
▪ Deterministic:
• Time estimates that are fairly certain
▪ Probabilistic:
• Time estimates that allow for random variation

36
Solution Technique
▪ Network activities:
• ES: earliest time the activity can start
• EF: earliest time the activity can finish
• LS: latest time the activity can start
• LF: latest time the activity can finish
▪ Used to determine:
• Expected project duration
• Activity slack times
• Critical path

39
PERT/CPM Solution Technique
Figure 17-2

40
Forward Pass: Earliest Start and Finish
▪ Start at the left side of the precedence network (the
start node) and work toward the right side
▪ For the start activity: ES = 0
▪ If an activity has a unique immediately preceding
activity:
• ES = EF of the immediately preceding activity
• If an activity has multiple immediately preceding
activities:
• ES = largest EF of immediate predecessors
• For each activity:
• EF= ES + Activity duration

41
Backward Pass: Latest Start and
Finish
▪ Start at the right side of the precedence network
(the end node) and work toward the left side.
• For the end activity: LF = EF
▪ If an activity has a unique immediate follower:
• LF = LS of the immediately follower
▪ If an activity has multiple immediate followers:
• LF = smallest LS of immediate followers
▪ For each activity:
• LS = LF - Activity duration

42
Slack and the Critical Path
▪ Activity slack time: The amount of time that an
activity can be delayed without causing a delay to
project completion date.
▪ Slack can be computed one of two ways:
• Slack = LS – ES
• Slack = LF – EF
▪ Critical path:
• The critical path is indicated by the activities
with zero slack

43
Using Slack Times
▪ Helps planning of allocation of scarce resources
• Efforts directed toward activities that might
delay project
• Assumption that activities will be started as
early as possible and not exceed their expected
time
▪ Slack is SHARED
• If two activities on the same path have the
same slack, this is total slack available to both

44
▪ Warner Robins Air Logistics Complex
▪ Page 710

45
▪ McGill University Health Centre
▪ Page 712

46
▪ New Champlain Bridge
▪ Page 712

47
Probabilistic Time Estimates
Optimistic Most likely Pessimistic
time time time

48
Project Crashing
Crashing
• Reducing the length of a project by using
additional resources
• Shortening activity durations
• Motivations:
• Avoid late penalties
• Monetary incentives for early completion
• Free resources for other projects
• Reduce indirect costs
• Options:
• Add more personnel
• More (or more efficient) equipment
• Relax specifications
49
Project Execution and Control
Project Project
Execution Control
Performance PM manages, Assessing

Controlling
of activities funds spent, progress
changes
planned resources used against plans
Taking Scope creep =

problem of
Scope creep: The corrective
uncontrolled
actions as
problem of needed
changes to
project scope
uncontrolled changes
to a project’s scope.
Trend analysis generates forecasts
of costs, completion time, etc.,

50
Project Execution
▪ Eli Goldratt considered two psychological
principles:
a) Student’s Syndrome = a student tends to delay the
start of an assignment until the last possible time, and
b) Parkinson’s law = work expands to fill the time
available for its completion.
▪ Therefore: the critical chain
• Do not disclose due dates of activities to workers
• Prioritize, schedule accordingly, and do activities asap
• Eliminate padding in activity time estimates
• Add buffer time to end of critical chain (= longest path
considering constraints)
4 Eliyahu M. Goldratt, Critical Chain, Great Barrington, MA: North River Press, 1997, pp. 246
51
Project Control
Suppliers
Costs and
and
Risks
Contracts
Project Quality
Team
Communica-
tions

52
Microsoft Project Management Software

✓ Thank You!
Learning Checklist

58

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Chapter 17

• Use PERT/CPM technique with deterministic durations to schedule projects, and

• Explain how to plan and manage project risks.

• Discuss project “crashing” and solve typical problems.

• Discuss project execution and control, and earned value analysis.

• Use Microsoft Project.

© 2021 McGraw-Hill Education Limited. 2

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited. 7

Planning and Scheduling

Execution and control

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited. 12

Project Team of people,

© 2021 McGraw-Hill Education Limited.

Accounting Engineering Operations Marketing

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

Time/ schedule Performance/

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

List Activities List activities defined in WBS

Sequence Identify logical sequential activities

Resources Identify resources needed for each activity

Duration Identify duration of each activity

Schedule Develop schedule using PERT/CPM

Modify Modify as needed (level, compress, etc.)

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

Path Length (weeks) Path Slack (weeks)

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

Performance PM manages, Assessing

Taking Scope creep =

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited.

© 2021 McGraw-Hill Education Limited. 53

© 2021 McGraw-Hill Education Limited.

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