pert and crm examples full class course.pdf
- 1. PROJECT MANAGEMENT & NETWORK ANALYSIS (CPM & PERT)
- 2. What is a Project? A project is an interrelated set of activities that has definite starting and ending points and that result in a unique product or service Cuts across organizational lines – they need varied skills of different profession Uncertainties like new technology & external environment can change the character of the project Personnel, materials, facilities etc. are temporarily assembled to accomplish a goal within a specified time frame and then disbanded Upon finish, a project releases lot of resources which were engaged in execution of the project
- 3. Examples of Project Hosting a College Annual Function Plan a Space Shuttle to Mars Construct a Plant to Manufacture Ball Bearings Plan for Wedding Designing and Implement a Computer System Designing a ABS System Executing Environmental Clean-up Of a Contaminated Site Erect a New Lab in the Dept. of Mechanical Engineering
- 4. • A project is a one shot, time limited, goal directed, major undertaking, requiring the commitment of varied skills & resources. • It also describes project as a combination of human and non human resources pooled together in a temporary organization to achieve specific purpose Definition of Project
- 5. Project Attributes A project: •Has a unique purpose. •Is temporary. •Is developed using progressive elaboration. •Requires resources, often from various areas. •Should have a primary customer or sponsor. •The project sponsor usually provides the direction and funding for the project.
- 6. Project and Program Managers Project managers work with project sponsors, project teams, and other people involved in projects to meet project goals. Program: “A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.” Program managers oversee programs and often act as bosses for project managers. Project management is “the application of knowledge, skills, tools and techniques to project activities to meet project requirements.”
- 7. Project Management Tools and Techniques Project management tools and techniques assist project managers and their teams in various aspects of project management. Specific tools and techniques include: Project charters, scope statements, and WBS (scope). Gantt charts, network diagrams, critical path analyses,criticalchainscheduling (time). Cost estimates and earned value management (cost).
- 8. NETWORK ANALYSIS Network Analysis refers to a number of techniques for the planning and control of complex projects. The two most frequently used forms of network planning are: 1. Programme Evaluation and Review Technique (PERT) 2. Critical Path Method (CPM)
- 9. W H A T IS A NETWORK? A network is a graphical diagram consisting of certain configuration of “Arrows” ( ) and “Nodes” (O) for showing the logical sequence of various tasks to be performed to achieve the project objective.
- 10. PERT / CPM Techniques The initial step in PERT/CPM project scheduling process is the determination of all specific activities that comprise the project and their relationships.
- 11. EXAMPLE Activity Description Duration (in weeks) Immediate predecessor A Obtain the budget approval 2 - B Obtain the machine 5 A C Hire the operator 1 A D Install the machine 1 B E Train the operator 6 C F Produce the goods 1 D,E
- 12. TERMS USED IN A NETWORK 1. Activity: An effort that is required to complete a part of the project. It is represented by “ ”. 2. Node: It represents the beginning or completion of an activity. It is represented by “ ”
- 13. RULES OF NETWORK CONSTRUCTION 1. Each defined activity is represented by one and only one arrow in the network. 2. Before an activity can be undertaken, all activities preceding it must be completed. 3. The arrows depicting various activities are indicative of logical procedure only. The length and bearing of the arrows are of no significance.
- 14. 4. The arrow direction indicates the general progression in time. Head events and Tail events. 5. When a number of activities terminate at one event, it indicates that no activity emanating from that event may start unless all activities terminating there have been completed. 6. Events are identified by numbers. 7. The activities are identified by the numbers of their starting and ending events or by alphabets.
- 15. 8. A network should have only one initial and terminal node. Merge Event A B C A B Burst Event C
- 16. 10. Parallel activities between two events, without intervening events, are prohibited. When two or more parallel activities in a project have the same head and tail events, dummy activities are needed in constructing the network. Dummy activities do not consume time or resources. An efficient network contains a minimum number of dummy activities required to portray the correct precedence relationships. 11. Looping is not permitted in a network.
- 17. NETWORK SYMBOLS SYMBOL MEANING Activity Event Activity A must be completed before Activity B completed Activities A & B can occur concurrently, but both must be completed before activity C can begin Activities A & B must be completed before activities C & D can begin, but C can begin independently of D & vice versa
- 18. SAMPLENETWORK
- 19. DUMMY ACTIVITY
- 20. CRITICAL PATH METHOD CPM aims at the determination of the time to complete a project and the important activities on which a manager shall focus attention.
- 21. PROCEDURE Consider all the paths in a project, beginning with the start event and stopping at the end event. For each path, calculate the time of execution. The path with the largest time is called the critical path and the activities along this path are called critical activities or bottleneck activities.
- 24. PROJECT EVALUATION REVIEW TECHNIQUE In the critical path method, the time estimates are assumed to be known with certainty. In certain projects like research and development, new product introductions, it is difficult to estimate the time of various activities. Hence PERT is used in such projects with a probabilistic method using three time estimates for an activity, rather than a single estimate, as shown in Figure Optimistic time tO: It is the shortest time taken to complete the activity. It means that if everything goes well then there is more chance of completing the activity within this time. Most likely time tm: It is the normal time taken to complete an activity, if the activity were frequently repeated under the same conditions. Pessimistic time tp: It is the longest time that an activity would take to complete. It is the worst time estimate that an activity would take if unexpected problems are faced.
- 25. Taking all these time estimates into consideration, the expected time of an activity is arrived at. The average or mean (ta) value of the activity duration is given by, The variance of the activity time is calculated using the formula, Probability for Project Duration The probability of completing the project within the scheduled time (Ts) or contracted time may be obtained by using the standard normal deviate where Te is the expected time of project completion. Probability of completing the project within the scheduled time is,
- 26. An R &D project has a list of tasks to be performed whose time estimates are given in the Table 8.11, as follows. Example Problem ofPERT a. Draw the project network. b. Find the critical path. c.Find the probability that the project is completed in 19days. If the probability is less than 20%, find the probability of completing it in 24 days.
- 27. Time expected for each activity is calculated using the formula (5): Similarly, the expected time is calculated for all the activities. The variance of activity time is calculated using the formula (6). Similarly, variances of all the activities are calculated.
- 28. calculate the time earliest (TE) and time Latest (TL) for all the activities. From the network diagram Figure 8.24, the critical path is identified as 1-4, 4-6, 6-7, with a project duration of22 days. A) Construct a network diagram:
- 29. C) The probability of completing the project within 19 days is given by, P (Z< Z0) To find Z0 , Thus, the probability of completing the R &D project in 19days is 9.01%.
- 30. Since the probability of completing the project in 19 days is less than 20% As in question, we find the probability of completing it in 24 days.
- 31. COST ANALYSIS The two important components of any activity are the cost and time. Cost is directly proportional to time and vice versa. For example, in constructing a shopping complex, the expected time of completion can be calculated using the time estimates of various activities. But if the construction has to be finished earlier, it requires additional cost to complete the project. We need to arrive at a time/cost trade-off between total cost of project and total time required to complete it. Normal time: Normal time is the time required tocomplete the activity at normal conditions and cost. Crash time: Crash time is the shortest possible activity time; crashing more than the normal time will increase the direct cost. Cost Slope Cost slope is the increase in cost per unit of time saved by crashing. Alinear cost curve is shown in Figure 8.27.
- 32. Example An activity takes 4 days to complete at a normal cost of Rs. 500.00. If it is possible to complete the activity in 2 days with an additional cost of Rs. 700.00, what is the incremental cost of the activity? Incremental Cost or Cost Slope It means, if one day is reduced we have to spend Rs. 100/- extra per day. Project Crashing Procedure for crashing Step1: Draw the network diagram and mark the Normal time and Crash time. Step2: Calculate TE and TL for all the activities. Step3: Find the critical path and other paths. Step 4: Find the slope for all activities and rank them in ascending order.
- 33. Step 5:Establish a tabular column with required field. Step 6: Select the lowest ranked activity; check whether it is a critical activity. If so,crash the activity, else go to the next highest ranked activity. Note: The critical path must remain critical while crashing. Step 7: Calculate the total cost of project for each crashing Step 8: Repeat Step 6 until all the activities in the critical path are fully crashed. Example The following Table 8.13 gives the activities of a construction project and other data. If the indirect cost is Rs. 20 per day, crash the activities to find the minimum duration of the project and the project cost associated.
- 34. Solution From the data provided in the table, draw the network diagram (Figure 8.28) and find the criticalpath. From the diagram, we observe that the critical path is 1-2-5 with project duration of 14days The cost slope for all activities and their rank is calculated as shown in Table 8.14
- 35. The available paths of the network are listed down in Table 8.15 indicating the sequence of crashing (see Figure 8.29). The sequence of crashing and the total costinvolved is given in Table 8.16 Initial direct cost = sum of all normal costs given = Rs. 490.00
- 36. It is not possible to crash more than 10 days, as all the activities in the critical path are fully crashed. Hence the minimum project duration is 10 days with the total cost of Rs. 970.00. Activity Crashed Project Duration Critical Path Direct Cost in (Rs.) Indirect Cost in (Rs.) Total Cost in (Rs.) - 14 1-2-5 490 14 x 20 = 280 770 1 – 2(2) 2 – 5(2) 2 – 4(1) 10 1 – 2 – 5 1 – 3 – 4 – 5 1 – 2 – 4 – 5 490 + (2 x 15) + (2 x 100) + (1 x 10) + (2 x 20) = 770 10 x 20 = 200 970 3 – 4(2)
- 37. Assignment
- 40. a. Draw the project network diagram. b. Calculate the length and variance of the critical path. c. What is the probability that the jobs on the critical path can be completed in 41days?
- 41. THANK YOU