• Wherever your career takes you, one of the most useful tools you can have, as a

manager, is the ability to manage a project.

• Modern global phenomenon is of growing project complexity and collapsing
product/service life cycles.
• The management of projects involves three phases-
1. Planning: This phase includes goal setting, defining the project, and team
organization.
2. Scheduling: This phase relates people, money, and supplies to specific
activities and relates activities to each other.
3. Controlling: Here the firm monitors resources, costs, quality, and budgets. It
also revises or changes plans and shifts resources to meet time and cost
demands.
• Projects can be defined as a series of related tasks directed toward a major output.
• In some firms a project organization is developed to make sure existing programs
continue to run smoothly on a day-to-day basis while new projects are successfully
completed.
• It provides an effective way to allocate manpower & resources to large projects of a
company.
• The project organization may be most helpful when:
1. Work tasks 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.
• Project organizations can be temporary or permanent. A permanent organization is
usually called a matrix organization.
• The Project manager heading the project coordinates activities with other
departments and reports directly to top management.
• Project managers receive high visibility in a firm and are responsible for making sure
that
1. all necessary activities are finished in proper sequence and on time;
2. the project comes in within budget;
3. the project meets its quality goals;
4. the people assigned to the project receive the motivation, direction, and
information needed to do their jobs.
• As a result, the project manager needs to bea good coach and communicator.
• Project managers often deal with ethical issues like -
1. offers of gifts from contractors,
2. pressure to alter status reports to mask the reality of delays,
3. false reports for charges of time and expenses,
4. pressures to compromise quality to meet bonuses or avoid penalties related to
schedules.
• Work breakdown structure (WBS) - A hierarchical description of a project into
more and more detailed components. While planning , One of the first steps is to
carefully establish the project’s objectives, then break the project down into
manageable parts.
• This work breakdown structure (WBS) defines the project by dividing it into its major
subcomponents (or tasks), which are then subdivided into more detailed components,
and finally into a set of activities and their related costs.
Learning Objective 3.1 - Use a Gantt chart for scheduling

• Project scheduling involves sequencing and allotting time to all project activities.
• Two main factors are considered in scheduling . First is time duration and second is
resources required.
• Scheduling is analysed as well as categorised along these two factors.
• Project scheduling serves several purposes:
1. It shows the relationship of each activity to others and to the whole project.
2. It identifies the precedence relationships among activities.
3. It encourages the setting of realistic time and cost estimates for each activity.
4. It helps make better use of people, money, and material resources by
identifying critical bottlenecks in the project.
• One popular project scheduling approach is the Gantt chart. The help managers in
making sure that -
1. activities are planned
2. order of performance is documented
3. activity time estimates are recorded
4. overall project time is developed
• Gantt charts are easy to understand. Horizontal bars are drawn for each project
activity along a time line

• Their simplicity makes them widely used.

• Their one major disadvantage is that they do not adequately illustrate the
interrelationships between the activities and the resources.
• PERT and CPM, the two widely used network techniques do have the ability to
consider precedence relationships and interdependency of activities.
• Even on huge projects, though, Gantt charts can be used as summaries of project
status and
Project Controlling -

• The control of projects, like the control of any management system, involves close
monitoring of resources, costs, quality, and budgets.
• Control also means using a feedback loop to revise the project plan and having the
ability to shift resources to where they are needed most.
• Computerized PERT/CPM reports and charts are widely available today from scores
of competing software firms.
• These programs produce a broad variety of reports, including
1. detailed cost breakdowns
2. labor requirements
3. cost and hour summaries
4. raw material and expenditure forecasts
5. variance reports
6. time analysis reports
7. work status reports.
• Some projects are “well-defined,” whereas others may be “ill-defined.”
• Projects typically only become well-defined after detailed extensive initial planning
and careful definition of required inputs, resources, processes, and outputs.
• They use what is called a waterfall approach, where the project progresses smoothly,
in a step-by-step manner, through each phase to completion.
• But most projects are ill-defined. These projects require what is known as an agile
style of management with collaboration and constant feedback to adjust to the many
unknowns of the evolving technology and project specifications.
• Most projects fall somewhere between waterfall and agile.

PERT and CPM -

• Program evaluation and review technique (PERT) and the critical path method
(CPM) were both developed in the 1950s to help managers schedule, monitor, and
control large and complex projects.
• PERT and CPM both follow six basic steps:
1. Define the project and prepare the work breakdown structure
2. Develop the relationships among the activities. Decide which activities must
precede and which must follow others
3. Draw the network connecting all the activities
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.
• Step 5, finding the critical path, is a major part of controlling a project. The activities
on the critical path represent tasks that will delay the entire project if they are not
completed on time.
• The major difference among the 2 techniques is that PERT employs three time
estimates for each activity. These time estimates are used to compute expected values
and standard deviations for the activity. CPM makes the assumption that activity
times are known with certainty and hence requires only one time factor for each
activity.
Learning Objective 3.2 - Draw AOA and AON networks

• The first step in a PERT or CPM network is to divide the entire project into
significant activities in accordance with the work breakdown structure.
• There are two approaches for drawing a project network:
1. Activity On Node (AON) - nodes denote the activity.
2. Activity On Arrow (AOA)- arrows denote the activity.
• The basic difference between AON and AOA is that the nodes in an AON diagram
represent activities. In an AOA network, the nodes represent the starting and finishing
times of an activity and are also called events . So nodes in AOA consume neither
time nor resources
• Many of the project management software packages, including Microsoft Project, use
AON networks
• Sample of how CPM/PERT is implemented →
• Note that we only list the immediate predecessors for each activity.
• A project network is a diagram of all the activities and the precedence relationships
that exist between these activities in a project.
• It is convenient to have the project network start and finish with a unique node.
• In situations in which a project has multiple ending activities, we include a “dummy”
ending activity.
Learning Objective 3.3 - Complete forward and backward
passes for a project

• To find out just how long the project will take, we perform the critical path analysis
for the network. Critical path is the longest path through the project network .
• To find
• the critical path, we calculate two distinct starting and ending times for each activity.
These are defined as follows:
1. Earliest start (ES) = earliest time at which an activity can start, assuming all
predecessors have been completed
2. Earliest finish (EF) = earliest time at which an activity can be finished
3. Latest start (LS) = latest time at which an activity can start so as to not delay
the completion time of the entire project
4. Latest finish (LF) = latest time by which an activity has to finish so as to not
delay the completion time of the entire project
• We use a two-pass process, consisting of a forward pass and a backward pass, to
determine these time schedules for each activity. The early start and finish times (ES
and EF) are determined during the forward pass . The late start and finish times (LS
and LF) are determined during the backward pass.
• To clearly show the activity schedules on the project network, we use the notation
shown in Figure
• Earliest Start Time Rule: Before an activity can start, all its immediate predecessors
must be finished

• Earliest Finish Time Rule: The earliest finish time (EF) of an activity is the sum of
its earliest start time (ES) and its activity time. That is
• The backward pass begins with the last activity in the project. It is an activity that
finds all the late start and late finish times.
• Latest Finish Time Rule - If an activity is an immediate predecessor for just a single
activity, its LF equals the LS of the activity that immediately follows it.

LF = Min{LS of all immediate following activities}

• Latest Start Time Rule - Rule 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

• Slack is the length of time an activity can be delayed without delaying the entire
project. Free time for an activity. Also referred to as free float or free slack.

Slack = LS − ES or Slack = LF − EF

• Slack is also referred as free float or free slack.

Learning Objective 3.4 - Determine a critical path

• The activities with zero slack are called critical activities and are said to be on the
critical path.
• The critical path is a continuous path through the project network that:
1. Starts at the first activity in the project
2. Terminates at the last activity in the project
3. Includes only critical activities
• In the above table we can see that activity A, C, E, G & H are having zero slack and
hence they are critical activities. Hence the critical path of the process will be A-C-E-
G-H
 • In related (connected) activities, Delaying either activity by 1 week causes not only
that activity, but also the other activity, to lose its slack. This type of a slack time is
referred to as total slack .
• Typically, when two or more noncritical activities appear successively in a path, they
share total slack.

Variability in Activity Times -

• Till now, we have adopted the CPM approach of assuming that all activity times are
known and fixed constants. However, in practice, it is likely that activity completion
times vary depending on various factors.
• Although some activities may be relatively less prone to delays, others could be
extremely susceptible to delays.
• This means that we cannot ignore the impact of variability in activity times when
deciding the schedule for a project. PERT addresses this issue.
• In PERT, we employ a probability distribution based on three time estimates for each
activity, as follows:
1. Optimistic time ( a ) = time an activity will take if everything goes as
planned. In estimating this value, there should be only a small probability (say,
1/100) that the activity time will be < a .
2. Pessimistic time ( b ) = time an activity will take assuming very unfavorable
conditions. In estimating this value, there should also be only a small
probability (also 1/100) that the activity time will be > b .
3. Most likely time ( m ) = most realistic estimate of the time required to
complete an activity.
• PERT’s ability to handle three time estimates for each activity enables us to compute
the probability that we can complete the project by a target date.
• When using PERT, we often assume that activity time estimates follow the beta
probability distribution (see Figure below ). This continuous distribution is often
appropriate for determining the expected value and variance for activity completion
times.
 • To find the expected activity time , t , the beta distribution weights the three time
estimates as follows:

t=(a+4m+b)∕6

• To compute the dispersion or variance of activity completion time , we use the

formula:

Variance = [( b − a ) ∕ 6] 2

Learning Objective 3.5 - Calculate the variance of activity

times
• Value of variance and difference (spread) between optimistic (a) & pessimistic (b)
times are important factors for analysis.
• Although projects can be of different, they are all managed using these few techniques
only.
• Variation in activities that are on the critical path can affect the overall project
completion time
• PERT uses the variance of critical path activities to help determine the variance of the
overall project. Project variance is computed by summing variances of critical
activities:

sigma2p = Project variance = Σ(variances of activities on critical path)

Project standard deviation = (Project variance)0.5

• For this standard dev. and mean (15 weeks of expected time) we can create a Normal
Distribution curve to calculate its other characteristic probabilities.
• PERT makes two more assumptions:
1. total project completion times follow a normal probability distribution
2. activity times are statistically independent
• Following are two calculation on statistical concepts of a normal distribution which
help here in calculating certain types of completion types
• When there is variability in activity times, it is important that we also investigate the
variability in the completion times of activities on noncritical paths.
• Some research has suggested that expending project resources to reduce the
variability of activities not on the critical path can be an effective element in project
management. We may need also to compute these probabilities for noncritical paths,
especially those that have relatively large variances.
• project manager is faced with either (or both) of the following situations:
1. the project is behind schedule
2. the scheduled project completion time has been moved forward
• The process by which we shorten the duration of a project in the cheapest manner
possible is called project crashing. It usually constitutes of diverting resources from
non critical to critical activities.
• CPM is a technique in which each activity has a normal or standard time that we use
in our computations. Associated with this normal time is the normal cost of the
activity. However, another time in project management is the crash time , which is
defined as the shortest duration required to complete an activity. Associated with this
crash time is the crash cost of the activity.
• We may not be able to shorten some activities at all. It depends on the nature of
activity.
• when choosing which activities to crash, and by how much, we need to ensure the
following:
1. The amount by which an activity is crashed is, in fact, permissible
2. Taken together, the shortened activity durations will enable us to finish the
project by the due date
3. The total cost of crashing is as small as possible