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Time, Cost and Quality

Planning
Unit-3
Time Planning Process
• The benefits of plans are only realised when they are communicated.
• Estimating is a key part of project planning
• Having the estimates of times and resources required is one part of
compiling the plans.
• Estimating is identified as an important activity, ‘closely related to
budgeting and cost management’.
Gantt Charts
• The purpose of the Gantt Chart is to illustrate the relationships
between the activities and time.
.
.

• In moving from the WBS to the Gantt Chart, there is:


● a level of logic established; and
● conventions used (time goes from left to right, activities are arranged
top to bottom in order of their occurrence).
In addition, the student has had to undertake two critical activities:
● forward schedule – started the activities at a given date and followed
them forwards in time to determine the end date;
● backward schedule – looked at the time by which the project needed to
be
completed and worked the logic of activities backwards.
Gantt Chart
.
Good points
● simple to draw and read
● good for static environments
● useful for providing overview of project activities
● very widely used
● the basis of the graphical interface for most project planning software.
Limitations
● difficult to update manually where there are many changes – charts
can quickly become obsolete and therefore discredited
● does not equate time with cost
● does not help in optimising resource allocation
● can lead to false sense of certainty about the project.
Activity-on-node Diagram

• Using the A-o-N technique, the construction of the project plan


combines the work breakdown structure to identify all the constituent
activities, the sequence in which they need to be performed, and the
estimated duration for each activity.
Consider a simple example.
Figure 6.5 shows two activities, A and B, represented by simple boxes.
B cannot start until A has finished and the times for A and B are 6 and 7
days respectively. This logic is known as dependency. This dependency
means that the total duration of the two tasks is 13 days.
.
The four ways in which activities therefore
can link are:
● finish-to-start – the second activity cannot start until the first has
finished;
● start-to-start – the second activity cannot start until the first has
started;
● finish-to-finish – the second activity cannot finish until the first has
finished;
● start-to-finish – the second activity cannot finish until the first has
started.
Critical Path Method(CPM)
• earliest start time (EST) – determined by the activities preceding the
event and is the earliest time at which the activity on this node can
start;
• latest start time (LST) – is the same or later than the EST and is the
latest time at which all the previous activities need to have been
completed to prevent the whole project being held up;
• total float – the difference between the LST and the EST.
critical path is B + D + H + K + N = 4 + 3 + 5 + 6 + 9 = 27.
Scheduling
• Knowing the sequence and duration of activities is a major step. This
does not, however, answer the question of ‘When will activities need
to be carried out?’ The schedule provides this.
• the necessary resources need to be in place in time for the critical
activity.
Resource capability refers to the ability of a resource to perform a
specific activity or the qualities required to do something.
Resource capacity is the total amount of work that an organization's
resources can complete within a specific time frame.
Computer-assisted project planning
• Microsoft Project
• method that uses computer software and technology to help with
complex planning processes.
Fast-track projects
• Fast-tracking projects is a project management strategy that involves
completing parts of a project simultaneously to shorten the overall schedule
and reduce costs. It's often used when a project is behind schedule or when a
client requests an earlier target date.
• Here are some tips for fast-tracking projects:
Identify fast-tracking opportunities
Schedule tasks concurrently
Assess potential risks
Only use experienced contractors
• Fast-tracking can be risky because it involves starting some tasks before others
are finished. However, it can often shorten a schedule without increasing cost.
Cost planning process
• cost = price − profit
• There are two basic approaches to the preparation of costing information:
● ground-up costing – the estimates of each level in the work breakdown
structure are compiled and added together by each level of supervision in
the project hierarchy, as would be the case for reimbursable contracts;
● top-down costing – you are allocated a certain amount of money to
complete the project activities and this has to be split between the sub-
projects. The allocation is based on either senior management’s estimates
or the use of target costing.
Elements of cost
time – the direct input of labour into activities;
materials – consumables and other items used in the process;
capital equipment – the purchase of the means of providing the
conversion process, or part of its cost, maintenance, running and
depreciation offset against activities;
indirect expenses – e.g. transportation, training;
overheads – provision of an office, financial and legal support,
managers and other non-direct staff;
contingency margin/allowance.
Cost estimating techniques
parametric estimating;
as . . . but . . . s;
forecasts;
synthetic estimation;
using learning curve effects;
wishful thinking.
Parametric estimating
• This type of estimating works well where there is considerable
experience of a particular type of project.
• The project is broken down into a unit that can be readily estimated –
for instance, this could be lines of code in a computer program, hours
of contact for a training programme or cost per mile of resurfacing a
road, or relaying track in the rail sector.
• Parametrics provide a means to estimate costs from knowledge of the
work being undertaken and can be used at different levels in the
product breakdown.
As . . . but . . . s
• As . . . but . . . s are where you or your organisation has experience of
doing a similar job previously. The use of previous costs as a baseline
for future estimation assumes that these were in some way validated
by the previous experience.
Forecasts
• there will be a degree of uncertainty in cost elements and these can
only be forecast
Synthetic estimation
• Where there are considerable items of repetitive work in a project the
times for people to carry out certain activities can be analysed to
provide a generic set of actions and consequent timings.
• New activities can be deconstructed into these generic actions and the
timings added accordingly.
Time estimation – learning curve effects
Yx = Kxn
where
x = the number of times the task has been carried out
Yx = time taken to carry out the task the xth time
K = time taken to carry out the task the first time
n = log b/log 2 where b = learning rate
Wishful thinking
The prime causes for ‘costing by wishful thinking’ are:
• optimism bias
• politics
• improper use of estimates
• failure to be systematic about planning
Cost build-up
Cost management – budgets
• At the outset of the project initial cost plans will provide a rough idea
as to whether the project is viable – that is, the returns will justify the
investment.
• As the project progresses to detail planning, these estimates will have
to be revised to show the increased level of consideration that has
gone into compiling the estimates.
• If approved, this spend becomes the budget, though often not without
being ‘trimmed’.
Quality planning process
Quality conformance planning
• quality conformance planning – otherwise referred to as quality
assurance has been used to ensure that minimum standards are
maintained in a wide array of activities.
• the use of a project manual as a means of not only planning for
achieving what you have set out to do in quality terms but also
demonstrating that you have planned to achieve what you set out to
do in quality terms.
Quality performance planning

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