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Project Management
To accompany
Quantitative Analysis for Management, Tenth Edition,
by Render, Stair, and Hanna
Power Point slides created by Jeff Heyl
Learning Objectives
After completing this chapter, students will be able to:
1. Understand how to plan, monitor, and control
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Chapter Outline
13.1
13.2
13.3
13.4
13.5
Introduction
PERT/CPM
PERT/Cost
Project Crashing
Other Topics in Project
Management
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Introduction
Most realistic projects are large and complex
Tens of thousands of steps and millions of dollars
may be involved
Managing large-scale, complicated projects
effectively is a difficult problem and the stakes are
high
The first step in planning and scheduling a project
is to develop the work breakdown structure
Time, cost, resource requirements, predecessors,
and people required are identified for each activity
Then a schedule for the project can be developed
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Introduction
The program evaluation and review technique
(PERT)
PERT and the critical path method (CPM)
CPM are two
popular quantitative analysis techniques to help
plan, schedule, monitor, and control projects
Originally the approaches differed in how they
estimated activity times
PERT used three time estimates to develop a
probabilistic estimate of completion time
CPM was a more deterministic technique
They have become so similar they are commonly
considered one technique, PERT/CPM
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or tasks
Develop the relationships among the activities and
decide which activities must precede others
Draw the network connecting all of the activities
Assign time and/or cost estimates to each activity
Compute the longest time path through the
network; this is called the critical path
Use the network to help plan, schedule, monitor,
and control the project
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PERT/CPM
Given the large number of tasks in a project, it is
1.
2.
3.
4.
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PERT/CPM
5. At any particular date, is the project on schedule,
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General Foundry
ACTIVITY
DESCRIPTION
IMMEDIATE
PREDECESSORS
D, E
F, G
Table 13.1
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PERT networks
Activity-on-node (AON)
AON where the nodes represent
activities
Activity-on-arc (AOA)
AOA where the arcs are used to
represent the activities
The AON approach is easier and more commonly
found in software packages
One node represents the start of the project, one
node for the end of the project, and nodes for
each of the activities
The arcs are used to show the predecessors for
each activity
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Build Internal
Components
Construct
Collection Stack
Install Control
System
Start
Build Burner
Inspect
and Test
Modify Roof
and Floor
Pour Concrete
and Install Frame
Install Pollution
Device
Finish
Figure 13.1
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Activity Times
In some situations, activity times are known with
certainty
CPM assigns just one time estimate to each
activity and this is used to find the critical path
In many projects there is uncertainty about
activity times
PERT employs a probability distribution based on
three time estimates for each activity
A weighted average of these estimates is used for
the time estimate and this is used to determine
the critical path
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Activity Times
The time estimates in PERT are
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Activity Times
PERT often assumes time estimates follow a beta
probability distribution
Probability
Probability of 1 in 100
of a Occurring
Figure 13.2
Probability of 1 in 100
of b Occurring
Most
Optimistic
Time
(a)
Most
Likely
Time
(m)
Activity Time
Most
Pessimistic
Time
(b)
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Activity Times
To find the expected activity time (t), the beta
completion time,
time we use the formula
ba
Variance
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Activity Times
Time estimates (weeks) for General Foundry
ACTIVITY
OPTIMISTIC,
a
MOST
PROBABLE,
m
PESSIMISTIC,
b
4/36
4/36
4/36
16/36
36/36
64/36
11
64/36
4/36
EXPECTED
TIME,
VARIANCE,
t = [(a + 4m + b)/6]
[(b a)/6]2
25
Table 13.2
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times
A
Start
2
Finish
Figure 13.3
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1.
2.
3.
4.
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t
EF
LF
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A
ES = 0
t=2
EF = 0 + 2 = 2
B
ES = 0
t=3
EF = 0 + 3 = 3
Start
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2
2
C
2
2
4
F
4
E
4
Start
B
0
3
3
D
3
4
7
3
7
4
8
H
13
G
8
2
15
Finish
5
13
Figure 13.4
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LS = LF t = 15 2 = 13 weeks
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2
2
2
C
2
2
2
4
4
F
4
10
E
4
4
Start
B
0
1
3
3
4
D
3
4
4
7
8
3
7
13
4
8
8
H
13
13
G
8
8
2
15
15
Finish
5
13
13
Figure 13.5
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ACTIVITY
EARLIEST
START,
ES
EARLIEST
FINISH,
EF
LATEST
START,
LS
LATEST
FINISH,
LF
Yes
No
Yes
No
Yes
10
13
No
13
13
Yes
13
15
13
15
Yes
SLACK,
LS ES
ON
CRITICAL
PATH?
Table 13.3
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2
2
2
C
2
2
2
4
4
F
4
10
E
4
4
Start
B
0
1
3
3
4
D
3
4
4
7
8
3
7
13
4
8
8
H
13
13
G
8
8
2
15
15
Finish
5
13
13
Figure 13.6
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variances of activities
on the critical path
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VARIANCE
4/36
4/36
4/36
16/36
36/36
64/36
64/36
4/36
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times
Figure 13.7
15 Weeks
(Expected Completion Time)
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