Chapter 9 – p.

366

Project
Management
Vo Thi Xuan Hanh
 Lecture outline
In this chapter, you will learn about:
1. Project Planning
2. Global and Diversity Issues in Project Management
3. Project Scheduling
a) Gantt chart
b) CPM/PERT: AOA and AON network
c) Critical path
4. Activity scheduling
2
 Project planning Project management
work 2 work 4
work 1 work 3 work n
Activity:
individual job or work effort
requiring labor, resources and
time, and is subject to
management control.
Make change Make innovation

Project:
a unique, one-time
operational activity or effort.

Project management:
based on
 Plan the project
resource and
 Control project activities
budget
Existing operations
3
 Project planning
Planning
Scheduling
“What will we do?” Control
“How can we do?”
“How to make it
right?”
Basic elements of a project plan:
1. Objectives 5. Resources
2. Project scope 6. Personnel
3. Contract requirements 7. Control
4. Schedules 8. Risk and problem analysis

5
Project planning
Project team: Scope statement:
made up of individuals from various a document that provides an
areas and departments within a company understanding, justification,
Matrix organization: and expected result of a project
a team structure with members from Statement of work:
functional areas, depending on skills written description of
required objectives of a project
Project manager:
most important member of project team

7
 Project planning
General
Matrix organization manager

Production Finance Marketing R&D

manager manager manager manager

Production Finance Marketing R&D

Project A manager group A group A group A group A

Production Finance Marketing R&D

Project B manager group B group B group B group B

8
 Project planning Scope statement template
Project name Name of project
Project sponsor Name of sponsor Project manager Name of project
manager
Date of project Date of approval Last revision Last updated date
approval date
Scope description List at a high level what is in the scope of the project as
well as what is out of scope of the project
Project deliverables List the top level deliverables of the project
Acceptance criteria List the project acceptance criteria
Constraints List any constraints that affect the project
Assumptions List any assumptions that the project is being based upon
9
 Project planning
Work breakdown
structure (WBS):
breaks a project into
components,
subcomponents,
activities, and tasks

figure 9.2, page 372

10
 Organizational Breakdown Structure
 a chart that shows which organizational units are responsible for work
items
 Responsibility Assignment Matrix
 shows who is responsible for work in a project

Copyright 2006 John Wiley & Sons, Inc. 9-11

 Global and Diversity
Issues in Project Management
 Global project teams are formed from
different genders, cultures, ethnicities,
etc.
 Diversity among team members can add
an extra dimension to project planning
 Cultural research and communication
are important elements in the planning
process
Read the case study “Project Management
Diversity in China” and determine the differences
of management between these 2 countries.
12
Project scheduling
Develop  Techniques
Estimate schedule
 Gantt chart
Sequence time
activities  CPM/PERT
Define
activities
Gantt chart: Precedence relationship:
a graph or bar chart with a the sequential relationship of project activities to
bar for each project each other.
activity that shows the
passage of time. Slack:
the amount of time an activity can be delayed
without delaying the project.

13
 9-14

Gantt Chart

 Graph or bar chart with a bar for each project

activity that shows passage of time
 Provides visual display of project schedule
 Slack
 amount of time an activity can be delayed without
delaying the project
Project scheduling: Gantt chart
Month 0 2 4 6 8 10
Activity
Design house
and obtain
financing
Lay foundation
Order and
receive materials
Build house

Select paint

Select carpet

Finish work

Month 1 3 5 7 9
15
 Project scheduling: Gantt chart practice
9-1/408. Construct a Gantt chart for the project described by the
following set of activities, and indicate the project completion time:
Activity Activity predecessor Time (week)
1 - 5
2 - 4
3 1 3
4 2 6

16
 Project scheduling: Gantt chart practice
The following table shows the tasks, dependencies, and estimated times a project manager
might input to a basic GANTT chart for a software development project.
Project start date: 12 June 2018
Task Identifier Task Description Predecessor Task(s) Time (days)
1 Establish project - 2
2 Establish customer requirements 1 3
Produce software specification
3 2 4
documents
4 Write test plans 3 1
5 Write code 3 2
6 Developer testing 5 2
7 System testing 4, 6 4
8 Write customer documentation 3 3 18
 Project scheduling: Gantt chart practice
9-2/408. Construct a Gantt chart for the project described by the
following set of activities, and indicate the project completion time and
the available slack for each activity:
Activity Activity predecessor Time (week)
1 - 3
2 - 7
3 1 2
4 2 5
5 2 6
6 4 1
7 5 4
20
Project control
Time

Cost

Quality
Project control
Performance

Communication

Enterprise project management

22
CPM/PERT
Both CPM and PERT  CriticalPath Method (CPM)
are derivatives of the  DuPont & Remington-Rand
Gantt chart and, as a
 Deterministic task times
result, are very
similar.  Activity-on-node network construction
 Project Evaluation and Review Technique
CPM/PERT uses a
network to depict the (PERT)
precedence  US Navy and Booz, Allen & Hamilton
relationships among  Probabilistic task time estimates
activities.
 Activity-on-arrow network construction

23
CPM/PERT
Activity-on-arrow (AOA):
Branch Node
arrows represent
activities and nodes are
events for points in time 1 2 3

Activity-on-node (AON):
Dummy: nodes represent
two or more activities activities, and arrows
cannot share the same show precedence
start and end nodes. relationships

24
CPM/PERT: AOA network
AOA Project Network for a House – figure 9.6

Lay
3 Dummy
foundation
2 0 Build Finish
3 1 house work
1 2 4 3
6 1
7
Design house Order and
and obtain receive Select 1 1 Select
financing materials paint carpet
5
A dummy activity is inserted into the network to show a
precedence relationship, but it does not represent any 2 3
actual passage of time.
25
 Figure 9.7
Concurrent Activities

3
Lay foundation Lay
Dummy
foundation
2 0
2 3
1
Order material 2 4
Order material

(a) Incorrect precedence (b) Correct precedence

relationship relationship

Copyright 2006 John Wiley & Sons, Inc. 9-26

CPM/PERT: AOA network practice
Job Predecessors Duration
A -- 6
B -- 4
C A 3
D A,B 5
E D 2
F D,E 8
G D,E,F 5
H F,G 4
I E,F 2
J H,I 6
K I,J 3
28
CPM/PERT: AON network
Lay Build
foundation house
Activity Number
2 4 Activity Time
2 3

1 7
Start 3 1
Design house Finish work
3 5 6
and obtain
1 1 1
financing
Order &receive Select Select
materials paint carpet

30
 Critical path
2 4
2 3

1 7
Start 3 1
3 5 6
1 1 1

Critical path: A: 1-2-4-7 C: 1-3-4-7

3 + 2 + 3 + 1 = 9 months 3 + 1 + 3 + 1 = 8 months
the longest path
through a network; it is
the minimum project B: 1-2-5-6-7 D: 1-3-5-6-7
completion time. 3 + 2 + 1 + 1 + 1 = 8 months 3 + 1 + 1 + 1 + 1 = 7 months

31
 Critical path - Activity Start Times
Start at 5 months
2 4
2 3
Finish at 9 months
1 7
Start 3 1
Finish

3 5 6
1 1 1
Start at 3 months Start at 6 months

32
 Mode Configuration
Activity number Earliest start

Earliest finish
1 0 3

3 0 3
Latest finish

Activity duration Latest start

9-34
 9-35

Forward Pass
 Start at the beginning of CPM/PERT network to determine
the earliest activity times
 Earliest Start Time (ES)
 earliest time an activity can start
 ES = maximum EF of immediate predecessors
 Earliest finish time (EF)
 earliest time an activity can finish
 earliest start time plus activity time
EF= ES + t
 Earliest Activity Start and
Finish Times
Lay foundations
Build house
2 3 5
Start
4 5 8
2
3

1 0 3 7 8 9
1 1
Design
Finish work
house and 6 6 7
obtain 3 3 4
financing 1
1 5 5 6
Select carpet
Order and receive 1
materials Select pain

Copyright 2006 John Wiley & Sons, Inc. 9-36

 9-37

Backward Pass
 Determines latest activity times by starting at the end of
CPM/PERT network and working forward
 Latest Start Time (LS)
 Latest time an activity can start without delaying critical
path time
LS= LF - t
 Latest finish time (LF)
 latest time an activity can be completed without delaying
critical path time
 LS = minimum LS of immediate predecessors
 Latest Activity Start and
Finish Times
Lay foundations
Build house
2 3 5
Start
4 5 8
2 3 5
3 5 8

1 0 3 7 8 9
1 0 3 1 8 9
Design
Finish work
house and 6 6 7
obtain 3 3 4
financing 1 7 8
1 4 5 5 5 6
Select carpet
Order and receive 1 6 7
materials Select pain

Copyright 2006 John Wiley & Sons, Inc. 9-39

 Activity Slack
Activity LS ES LF EF Slack S
*1 0 0 3 3 0
*2 3 3 5 5 0
3 4 3 5 4 1
*4 5 5 8 8 0
5 6 5 7 6 1
6 7 6 8 7 1
*7 8 8 9 9 0
*Critical path

40
 9-43

Project Crashing
 Crashing
 reducing project time by expending additional resources
 Crash time
 an amount of time an activity is reduced
 Crash cost
 cost of reducing activity time
 Goal
 reduce project duration at minimum cost

Copyright 2006 John Wiley &

 Project Crashing: Example

2 4
1
8 2
7
1 4
1
2

3 6
4 5 4
4

Copyright 2006 John Wiley & Sons, Inc. 9-46

 9-47

Project Crashing: Example (cont.)

$7,000 –

$6,000 –
Crash cost

$5,000 – Crashed activity

Slope = crash cost per week

$4,000 –

$3,000 – Normal activity

Normal cost
$2,000 –

$1,000 –
Crash time Normal time

– | | | | | | |
0 2 4 6 8 10 12 14 Weeks
Copyright 2006 John Wiley &
 Normal Activity and Crash Data

TOTAL
NORMAL CRASH ALLOWABLE CRASH
TIME TIME NORMAL CRASH CRASH TIME COST PER
ACTIVITY (WEEKS) (WEEKS) COST COST (WEEKS) WEEK

1 12 7 $3,000 $5,000 5 $400

2 8 5 2,000 3,500 3 500
3 4 3 4,000 7,000 1 3,000
4 12 9 50,000 71,000 3 7,000
5 4 1 500 1,100 3 200
6 4 1 500 1,100 3 200
7 4 3 15,000 22,000 1 7,000
$75,000 $110,700

Copyright 2006 John Wiley & Sons, Inc. 9-48

 $500 $7000
Project Duration:
2 4
$700
36 weeks
8 12
7
1
12
4 FROM …

$400 3 6
4 5 4
4 $200
$3000
$200

$500 $7000

2 4
8 12 $700
7
1
TO… 7
4

Project Duration: $400 3 6

31 weeks 4 5 4
Additional Cost: 4 $200
$3000
$2000 $200

Copyright 2006 John Wiley & Sons, Inc. 9-49

 Copyright 2006 John Wiley & Sons, Inc.

Time-Cost Relationship

 Crashing costs increase as project

duration decreases
 Indirect costs increase as project
duration increases
 Reduce project length as long as
crashing costs are less than indirect
costs

9-50
 Time-Cost Tradeoff
Minimum cost = optimal project time
Total project cost

Indirect cost
Cost ($)

Direct cost

Crashing Time
Project duration
Copyright 2006 John Wiley & Sons, Inc. 9-51