Project

Management
 Learning Objectives
• Describe project management objectives
• Describe the project life cycle
• Diagram networks of project activities
• Estimate the completion time of a project
• Compute the probability of completing a
project by a specific time
• Determine how to reduce the length of a
project effectively
 Project Management Applications
• What is a project?
“A project is a series of activities directed to accomplishment
of a desired objective.”
– Any unique endeavor with specific objectives
– With multiple activities
– With defined precedent relationships
– With a specific time period for completion
• Examples?
– A major event like a wedding
– Any construction project
– Designing a political campaign
 Definitions
A project is a temporary endeavour undertaken to
create a unique product or service.

It is
• performed by people
• constrained by limited resources
• planned, executed and controlled
 Project Life Cycle

• Conception: identify the need

• Feasibility analysis or study: costs
benefits, and risks
• Planning: who, how long, what to do?
• Execution: doing the project
• Termination: ending the project
 Project Life Cycle
Cost and
Intermediate
Staffing
Phases (one
level
or more) Final
Initial
Phase Phase

Time
Start Finish

Milestones :
• defined state of the project
• decision point
 CPM - Critical Path Method
• Definition: In CPM activities are shown as a network of
precedence relationships using activity-on-node network
construction
o Single estimate of activity time
o Deterministic activity times

USED IN : Production management - for the jobs of

repetitive in nature where the activity time estimates
can be predicted with considerable certainty due to the
existence of past experience.
 PERT -
Project Evaluation & Review Techniques
• Definition: In PERT activities are shown as a network of
precedence relationships using activity-on-arrow network
construction
o Multiple time estimates
o Probabilistic activity times

USED IN : Project management - for non-repetitive jobs

(research and development work), where the time and cost
estimates tend to be quite uncertain. This technique uses
probabilistic time estimates.
 Gantt chart

Originated by H.L.Gantt in
1918
Advantages Limitations
- Gantt charts are quite commonly - Do not clearly indicate details
used. They provide an easy regarding the progress of activities
graphical representation of when
- Do not give a clear indication of
activities (might) take place.
interrelation ship between the
separate activities
 CPM/PERT
These deficiencies can be eliminated to a large extent by
showing the interdependence of various activities by
means of connecting arrows called network technique.

• Overtime CPM and PERT became one technique

• ADVANTAGES:
o Precedence relationships
o large projects
o more efficient
 Network Diagram
• Network (precedence) diagram – diagram of project
activities that shows sequential relationships by the
use of arrows and nodes.
• Activity-on-arrow (AOA) – a network diagram
convention in which arrows designate activities.
• Activity-on-node (AON) – a network diagram
convention in which nodes designate activities.
• Activities – steps in the project that consume
resources and/or time.
• Events – the starting and finishing of activities,
designated by nodes in the AOA convention.
 Drawing the project network (AOA)

 An activity carries the arrow symbol, . This

represent a task or subproject that uses time or
resources
 A node (an event), denoted by a circle , marks the
start and completion of an activity, which contain a
number that helps to identify its location. For example
activity A can be drawn as:
A
1 2
3 days

This means activity A starts at node 1 and finishes at node

2 and it will takes three days

Slide
12
 The Project Network
• Use of nodes and arrows
Arrows An arrow leads from tail to head directionally
• Indicate ACTIVITY,
• a time consuming effort that is required to perform a part of the work.

Nodes A node is represented by a circle

- Indicate EVENT,
- a point in time where one or more activities start and/or
finish.
 The Network Diagram
• Path
(cont’d)
o Sequence of activities that leads from the starting node
to the finishing node
• Critical path
o The longest path; determines expected project duration
• Critical activities
o Activities on the critical path
• Slack
o Allowable slippage for path; the difference the length
of path and the length of critical path
Project Network – Activity on
Arrow
Order
AOA furniture 4
Furniture
Locate 2 setup
facilities
Remodel
1 5 6
Move
in
Interview
Hire and
train
3
Project Network – Activity on
Node
Order
furniture
Locate Furniture
2 setup
facilities
AON
1 6
Move
Remodel
in

S 5 7

Hire and
Interview
train

3 4
 Network Diagrams
• Activity-on-Node (AON):
– Uses nodes to represent the activity
– Uses arrows to represent precedence relationships
 Network Conventions
a
b
c a

c
b

a c
a c

b Dummy
activity
b d
 Example 1- A simple network
Consider the list of four activities for making a
simple product:
Activity Description Immediate
predecessors
A Buy Plastic Body -
B Design Component -
C Make Component B
D Assemble product A,C

Immediate predecessors for a particular activity

are the activities that, when completed, enable
the start of the activity in question.
 SEQUENCE OF ACTIVITIES

• Can start work on activities A and B anytime,

since neither of these activities depends upon
the completion of prior activities.
• Activity C cannot be started until activity B
has been completed
• Activity D cannot be started until both
activities A and C have been completed.
• The graphical representation (next slide) is
referred to as the PERT/CPM network
 Network of Four Activities
Indicate project activities

A D
1 3 4

B C

Nodes correspond to the beginning

and ending of activities
 Example 2
Develop the network for a project with following activities and
immediate predecessors:
Activity Immediate predecessors
A -
B -
C B
D A, C
E C
F C
G D,E,F

Try to do for the first five (A,B,C,D,E) activities

Network of first five activities

A D
1 3 4

E
B

C 5

2
We need to introduce
a dummy activity
 Network of Seven Activities
1 A 3 D 4 G
7

dummy
E

my
B

dum
C 5 F
2 6
• Note how the network correctly identifies D, E, and F as the
immediate predecessors for activity G.
• Dummy activities is used to identify precedence relationships
correctly and to eliminate possible confusion of two or more
activities having the same starting and ending nodes
• Dummy activities have no resources (time, labor, machinery, etc.) –
purpose is to PRESERVE LOGIC of the network
 EXAMPLES OF THE USE OF DUMMYACTIVITY
Network concurrent activities
a
a 2

1 2 1 Dummy

b 3
b
WRONG!!! RIGHT 

Activity c not WRONG !

required for e
a
a e
d
1
b b
1 e
d
c
2
c
WRONG
RIGHT
!!!

RIGHT 
 WRONG!!! RIGHT!!!

a d a d
1 1

b e b
2 2 4
e

c f c f
3 3

a precedes d.
a and b precede e,
b and c precede f (a does not precede f)
 Scheduling with activity time
Activity Immediate Completion
predecessors Time (week)
A - 5
B - 6
C A 4
D A 3
E A 1
F E 4
G D,F 14
H B,C 12
I G,H 2
Total …… 51

This information indicates that the total time required to complete

activities is 51 weeks. However, we can see from the network that several
of the activities can be conducted simultaneously (A and B, for example).
 Determining the Critical Path
• Step 1: Make a forward pass through the network as
follows: For each activity i beginning at the Start
node, compute:
– Earliest Start Time (ES) = the maximum of the earliest finish
times of all activities immediately preceding activity i.
– Zero for an activity with no predecessors
– The earliest time an activity can begin without violation of
immediate predecessor requirements
– Earliest Finish Time (EF) = (Earliest Start Time) + (Time to
complete activity i.
– Represents the earliest time at which an activity can end.
The project completion time is the maximum of the
Earliest Finish Times at the Finish node.
 Determining the Critical Path
• Step 2: Make a backwards pass through the network as
follows: Move sequentially backwards from the Finish node
to the Start node. At a given node, j, consider all activities
ending at node j. For each of these activities, (i,j), compute:
o Latest Finish Time (LF) = the minimum of the latest start
times beginning at node j. (For node N, this is the project
completion time.).
o The latest time an activity can end without delaying the
entire project.
o Latest Start Time (LS) = (Latest Finish Time) - (Time to
complete activity (i,j)).
o Latest time an activity can begin without delaying the
entire project.
 Determining the Critical Path
• Step 3: Calculate the slack time for each activity by:
Slack = (Latest Start) - (Earliest Start), or
= (Latest Finish) - (Earliest Finish).
A critical path is a path of activities, from the Start node to
the Finish node, with 0 slack times.
 Earliest start & earliest finish time

• We are interested in the longest path through the

network, i.e., the critical path.

• Starting at the network’s origin (node 1) and using a

starting time of 0, we compute an earliest start (ES) and
earliest finish (EF) time for each activity in the network.

• The expression EF = ES + t can be used to find the earliest

finish time for a given activity.
For example, for activity A, ES = 0 and t = 5; thus the
earliest finish time for activity A is
EF = 0 + 5 = 5
 Arrow with ES & EF time
EF = earliest finish time

ES = earliest start time

Activity

2
5]
A [0,
5
1
t = expected activity
time
 Network with ES & EF
time
D[5,8] 5
2 3
0]

G[1 4
E[ 1
5,6 [ 6,
F
5 0,5]

0,2
1
1 ] 4
7
[

4]
A

C[5,9]

6]
4 24,2
4

I[
2
1 6
B[0
,6] [ 9, 21]
6 H
12
3

Earliest start time rule:

The earliest start time for an activity leaving a particular node is equal to
the largest of the earliest finish times for all activities entering the node.
 Activity, duration, ES, EF, LS, LF

EF = earliest finish time

ES = earliest start time

Activity

3
9]
C [5, ]
2
4 [8,1
2
LF = latest finish time
LS = latest start time
 Latest start & latest finish time
• To find the critical path we need a backward pass calculation.

• Starting at the completion point (node 7) and using a latest

finish time (LF) of 26 for activity I, we trace back through the
network computing a latest start (LS) and latest finish time
for each activity

• The expression LS = LF – t can be used to calculate latest start

time for each activity. For example, for activity I, LF = 26 and t
= 2, thus the latest start time for activity I is
LS = 26 – 2 = 24
 Network with LS & LF time
D[5,8] 5
2 3[7,10]
E[ 1 0]
6, 10]

G[1 10,24
1[5 5,6] [

14[
0, ]

F 6,
5[ 0,5

,6]

0,2 ]
4[
5]

7
[
A

26]

4]
4 4 ,
C[5,9]

2
4[8,12]

I[ 26]
24 ,
1 6 2[
B[0
6[6 ,6] [ 9,21]
H ,24]
,12 [ 12
] 12
3

Latest finish time rule:

The latest finish time for an activity entering a particular node is equal to
the smallest of the latest start times for all activities leaving the node.
 Slack or Free Time or Float
Slack is the length of time an activity can be delayed without affecting the
completion date for the entire project.
For example, slack for C = 3 weeks, i.e Activity C can be delayed up to 3
weeks
3
(start anywhere between weeks 5 and 8). , 9]
C [5 ]
4 [ 8,12
2
ES LS EF EF
5 8 9 12

LF-EF = 12 –9 =3

LS-ES = 8 – 5 = 3

LF-ES-t = 12-5-4 = 3
 Activity schedule for our example
Activity Earliest Latest Earliest Latest Slack Critical
start (ES) start (LS) finish (EF) finish (LF) (LS-ES) path

A 0 0 5 5 0 Yes
B 0 6 6 12 6
C 5 8 9 12 3
D 5 7 8 10 2
E 5 5 6 6 0 Yes
F 6 6 10 10 0 Yes
G 10 10 24 24 0 Yes
H 9 12 21 24 3
I 24 24 26 26 0 Yes
 Example: ABC Associates

• Consider the following project:

Immediate
Activity Predecessor time (days)
A -- 6
B -- 4
C A 3
D A 5
E A 1
F B,C 4
G B,C 2
H E,F 6
I E,F 5
J D,H 3
K G,I 5
 Example: network
Backward LF
ES
6 20
Forwar
6 19 d
D
2 5 5
J
1 6
0 A
6 E H 3 23
13
1 C 3
4 7
0 4 F 5
13 5
B 4 I 23
K
2
3 6
G
9 18

9 18
 Example: ABC Associates
• Earliest/Latest Times
Activity time ES EF LS LF Slack
A 6 0 6 0 6 0 *critical
B 4 0 4 5 9 5
EF = ES + t
C 3 6 9 6 9 0*
LS = LF – t D 5 6 11 15 20 9
Where t is the E 1 6 7 12 13 6
Activity time F 4 9 13 9 13 0*
G 2 9 11 16 18 7
Slack = LF – EF H 6 13 19 14 20 1
= LS - ES
I 5 13 18 13 18 0*
J 3 19 22 20 23 1
K 5 18 23 18 23 0*
o The estimated project completion time is the Max EF at node 7 = 23.
 IMPORTANT QUESTIONS
• What is the total time to complete the project?
o 26 weeks if the individual activities are completed on schedule.

• What are the scheduled start and completion times for each activity?
o ES, EF, LS, LF are given for each activity.

• What activities are critical and must be completed as scheduled in order to

keep the project on time?
o Critical path activities: A, E, F, G, and I.

• How long can non-critical activities be delayed before they cause a delay
in the project’s completion time
o Slack time available for all activities are given.
 Time Estimates
• Deterministic
o Time estimates that are fairly certain

• Probabilistic
o Estimates of times that allow for variation

17-43
 Example 1
6 weeks
Deterministic 4
time estimates rd er e
O tu r

Fur p
n i 3 weeks

setu
8 weeks 2 fur

n itu
Rem
a te s ode

re
c
Lo ilitie 11 weeks
l Move
fac in
1 5 6
In 1 week
te ra in
rv
ie dt
4 weeks w e an
r
Hi 9 weeks

17-44
 Example 1 Solution
Critical Path

Path Length Slack

(weeks)
1-2-3-4-5-6 18 2
1-2-5-6 20 0
1-3-5-6 14 6

17-45
 Computing Algorithm
• Network activities
o ES: early start
o EF: early finish
o LS: late start
o LF: late finish
• Used to determine
o Expected project duration
o Slack time
o Critical path

17-46
Probabilistic Time Estimates
• Optimistic time
o Time required under optimal conditions

• Pessimistic time
o Time required under worst conditions

• Most likely time

o Most probable length of time that will be required

17-47
 Probabilistic Estimates
Figure 17.8

Beta Distribution

to tm te tp

Activity Optimistic Most likely Pessimistic

start time time (mode) time

17-48
Expected Time

te = to + 4t m +t p
6
te = expected time
to = optimistic time
tm = most likely time
tp = pessimistic time

17-49
 Variance

2 (t –
= p o t ) 2

36

2 = variance
to = optimistic time
tp = pessimistic time

17-50
 Example 5

Optimistic Most likely Pessimistic

time time time

2-4-6
b

2- c
-4

3-
1- 3

5
a
3-4-5 3-5-7 5-7-9
d e f
-6
2- g

4
3- i
3-
6

4-6-8
h

17-51
Example 5 Time Estimates
Tabc = 10.0
Tdef = 16.0 4.00
b
Tghi = 13.50

3.1 c
. 83

7
2
a
4.00 5.0 7.0
d e f
.4 17
3.3 g
3

i
6.0
h

17-52
Path Probabilities
Specified time – Path mean
Z =
Path standard deviation

Z indicates how many standard deviations

of the path distribution the specified tine
is beyond the expected path duration.

17-53
 Example 6
17
Weeks
1.00
a-b-c
Weeks
10.0

d-e-f
Weeks
16.0

1.00
g-h-i
13.5 Weeks

17-54
 Time-cost Trade-offs:
Crashing
• Crash – shortening activity duration
• Procedure for crashing
o Crash the project one period at a time
o Only an activity on the critical path
o Crash the least expensive activity
o Multiple critical paths: find the sum of crashing the least expensive activity on
each critical path

17-55
 Time-Cost Trade-Offs: Crashing
Figure 17.11

Total
cost

Expected indirect costs

Shorten

Cumulative CRASH
cost of
crashing
Shorten

Optimum

17-56
 Example 7

10
6 b
a
2
f
5

9
c

e
4
d

17-57
 Advantages of PERT
• Forces managers to organize
• Provides graphic display of activities
• Identifies
o Critical activities
o Slack activities 4
2

1 5 6

17-58
 Limitations of PERT
• Important activities may be omitted
• Precedence relationships may not be
correct
4
• Estimates may include
2
a fudge factor
• May focus solely 1 5 6

on critical path
142 weeks

3
17-59
 Goldratt’s Critical Chain
• Goldratt’s insight on project management
o Time estimates are often pessimistic
o Activities finished ahead of schedule often go unreported
o With multiple projects, resources needed for one project may be in use on another

17-60
 Project Management Software
• Computer aided design (CAD)
• Groupware (Lotus Notes)
• CA Super Project
• Harvard Total Manager
• MS Project
• Sure Track Project Manager
• Time Line

17-61
 Advantages of PM
Software
• Imposes a methodology
• Provides logical planning structure
• Enhances team communication
• Flag constraint violations
• Automatic report formats
• Multiple levels of reports
• Enables what-if scenarios
• Generates various chart types

17-62
 Project Risk Management

• Risk: occurrence of events that have undesirable

consequences
o Delays
o Increased costs
o Inability to meet specifications
o Project termination

17-63
 Risk Management
• Identify potential risks
• Analyze and assess risks
• Work to minimize occurrence of risk
• Establish contingency plans

17-64
 Summary
• Projects are a unique set of activities
• Projects go through life cycles
• PERT and CPM are two common techniques
• Network diagrams
• Project management software available

17-65
 Activity on Node & Activity on Arrow

Activity on Node Activity on Arrow

- A completion of an - An arrow represents a
activity is represented by a task, while a node is the
node completion of a task
- Arrows represent order of
events
 Benefits of CPM/PERT
• Useful at many stages of project management
• Mathematically simple
• Give critical path and slack time
• Provide project documentation
• Useful in monitoring costs
 Questions Answered by CPM & PERT
• Completion date?
• On Schedule?
• Within Budget?
• Critical Activities?
• How can the project be finished early at the least cost?