BA 301 Spring 2003 Fall 2001 BA

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BA 301 – Spring 2003 Fall 2001 BA 301 - Project Management 1

Project Characteristics n n n Usually unique, done only one time Long time duration to complete Very costly and require large amounts of resources Meeting expected completions times is important Resources can often be shifted between different project activities Management teams are usually disbanded upon completion of the project Fall 2001 BA 301 - Project Management 2

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An Example (Close by!) n n A major highway construction project just south of the CBA. This project to redesign the interchange between I-40 and I-17 was a joint venture between Vastco, Inc. and ADOT. n The construction was an excellent example of “Project Management” Fall 2001 BA 301 - Project Management 4

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Network Terms Project: “Iraqi Freedom” Begin War 1 Event (Node) Fall 2001 Engage & Defeat Iraqi Military Forces Two Months Activity (Arrow) BA 301 - Project Management Saddam’s government is eliminated 2 Event (Node) 10

Activity Relationships 2 A 1 B A & B can occur concurrently Fall 2001 3 BA 301 - Project Management 11

Activity Relationships A must be done before C & D can begin 2 A C 1 B Fall 2001 D 4 3 BA 301 - Project Management 12

PERT Activity Times n 3 time estimates n n n Optimistic times (a) Most-likely time (m) Pessimistic time (b) Follow beta distribution Expected time: t = (a + 4 m + b)/6 Variance of times: v = (b - a)2/6 Fall 2001 BA 301 - Project Management 13

PERT ANALYSIS Immediate Activity A B C D E Fall 2001 Predecessor none A B C, D Time a 2 3 1 3 4 m 4 6 2 4 5 b-a b 6 9 9 11 6 BA 301 - Project Management t 6 v 14

Critical Path Analysis n Provides activity information n n Earliest (ES) & latest (LS) start Earliest (EF) & latest (LF) finish Slack (S): Allowable delay Identifies critical path n n Longest path in network Shortest time project can be completed Any delay on critical path activities delays project Critical path activities have 0 slack Fall 2001 BA 301 - Project Management 15

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Critical Path in Network Pour foundation & frame 6 wk. 1 3 wk. Buy shrubs etc. Do interior work 3 wk. 2 Roof 2 wk. 3 4 Landscape 4 wk. Critical path is longest path: 12 weeks. Fall 2001 BA 301 - Project Management 18

Finding the Critical Path Activity Time ES A 4 0 B 6 0 C 3 4 D 5 6 E 5 11 Fall 2001 EF LS 4 6 7 11 16 LF BA 301 - Project Management Slack 19

Critical Path continued Activity Time A 4 B 6 C 3 D 5 E 5 Fall 2001 ES 0 0 4 6 11 EF 4 6 7 11 16 LS 4 0 8 6 11 LF 8 6 11 11 16 BA 301 - Project Management Slack 4 0 0 20

Project Times n n Expected project time (T) Used to obtain probability of n Sum of critical path activity project completion! times, t Project variance (V) n Sum of critical path activity variances, v Fall 2001 BA 301 - Project Management 21

PERT Probability Example You’re a project planner for General Dynamics. A submarine project has an expected completion time of 40 weeks, with a standard deviation of 5 weeks. What is the probability of finishing the sub in 50 weeks or less? Fall 2001 BA 301 - Project Management © 1995 Corel Corp. 22

Converting to Standardized Variable X - T 50 - 40 = = 2. 0 Z= s 5 Normal Distribution Standardized Normal Distribution s. Z = 1 s=5 T = 40 50 Fall 2001 X m = 0 2. 0 z BA 301 - Project Management Z 23

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