pert-cpm.pptx
- 1. PROJECT MANAGEMENT TIME MANAGEMENT TECHNIQUES Presented by: Piyush Agarwal 2015MB22
- 2. Completing a project on time and within budget is not an easy task. The project scheduling phase plays a central role in predicting both the time and cost aspects of a project. More precisely, it determines a timetable in order to be able to predict the expected time and cost of each individual activity. ABSTRACT
- 3. Introduction • What is the expected project finish date? • How can precedence relations between activities be modeled in a network? • What are the expected activity start and finish times? • What is the effect of variability in activity time estimates on the project duration?
- 4. Project Definition Phase • In the definition phase of a project’s life cycle, the organization defines the project objectives, the project specifications and requirements and the organization of the entire project. In doing so, the organization decides on how it is going to achieve all project objectives. • The Work Breakdown Structure (WBS) is a fundamental concept of the definition phase that, along with the Organizational Breakdown Structure (OBS), identifies the set of activities needed to achieve the project goal as well as the responsibilities of the project team for the various subparts of the project. • This information needs to be transformed into a network diagram that identifies a list of project activities and the technological links with the other activities. This project network is an easy and accessible tool for the critical path calculations to determine the earliest and latest activity start times of the scheduling phase.
- 5. WBS and OBS • The preparation of a Work Breakdown Structure (WBS) is an important step in managing and mastering the inherent complexity of the project. It involves the decomposition of major project deliverables into smaller, more manageable components until the deliverables are defined in sufficient detail to support development of project activities (PMBOK 2004). • The WBS is a tool that defines the project and groups the project’s discrete work elements to help organize and define the total work scope of the project. It provides the necessary framework for detailed cost estimation and control along with providing guidance for schedule development and control. Each descending level of the WBS represents an increased level of detailed definition of the project work.
- 8. Network Analysis • To construct a complete and detailed WBS, the work packages of a WBS need to be further subdivided into activities. • It might improve the level of detail and accuracy of cost, duration and resource estimates which serve as inputs for the construction of a project network and scheduling phase. • The definition phase, which determines the list of activities, the precedence relations, possible resource requirements and the major milestones of the project, is different from the scheduling phase in the level of detail and the timing of project activities. • The scheduling phase aims at the determination of start and finish times of each activity of the project, and consequently, determines the milestones in detail. This can only be done after the construction of the network in the definition phase. • Incorporating these technological links between any pair of activities is a first step in the construction of the project network. A network consists of nodes and arcs and incorporates all the activities and their technological precedence relations. A network can be seen as a graph G(N, A) where the set N is used to denote the set of nodes and A to denote the set of arcs. The network has a single start node and a single end node and is used as an input for the scheduling phase
- 9. 9 Project Network • Network analysis is the general name given to certain specific techniques which can be used for the planning, management and control of projects ■ 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. • Activity – A task or a certain amount of work required in the project – Requires time to complete – Represented by an arrow • Dummy Activity – Indicates only precedence relationships – Does not require any time of effort
- 10. 10 ■ Event – Signals the beginning or ending of an activity – Designates a point in time – Represented by a circle (node) ■ Network – Shows the sequential relationships among activities using nodes and arrows Activity-on-node (AON) nodes represent activities, and arrows show precedence relationships Activity-on-arrow (AOA) arrows represent activities and nodes are events for points in time Project Network
- 11. • One type is the activity-on-arc (AOA) project network, where each activity is represented by an arc. A node is used to separate an activity (an outgoing arc) from each of its immediate predecessors (an incoming arc). The sequencing of the arcs thereby shows the precedence relationships between the activities. • The second type is the activity-on-node (AON) project network, where each activity is represented by a node. The arcs then are used just to show the precedence relationships between the activities. In particular, the node for each activity with immediate predecessors has an arc coming in from each of these predecessors.
- 12. darla/smbs/vit 12 AOA Project Network for House 3 2 0 1 3 1 1 1 1 2 4 6 7 3 5 Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house AON Project Network for House 1 3 2 2 4 3 3 1 5 1 6 1 7 1 Start Design house and obtain financing Order and receive materials Select paint Select carpet Lay foundations Build house Finish work
- 13. 13 Situations in network diagram A B C A must finish before either B or C can start A B C both A and B must finish before C can start D C B A both A and C must finish before either of B or D can start A C B D Dummy A must finish before B can start both A and C must finish before D can start
- 14. My word..... My purpose here is to give a few ideas about PERT , CPM & other project management tools for entrepreneurs . These are introductory ideas. Be an Entrepreneur, change the society, change the world. Go with positive spirit. Please pass this presentation to all those who might need it. Let us spread knowledge as widely as possible. I welcome your suggestions. I also request you to help me in spreading social entrepreneurship across the globe – for which I need support of you people – not of any VIP. With your help, I can spread the ideas – for which we stand....
- 15. 15 History of CPM/PERT ■ Critical Path Method (CPM) – E I Du Pont de Nemours & Co. (1957) for construction of new chemical plant and maintenance shut-down – Deterministic task times – Activity-on-node network construction – Repetitive nature of jobs ■ Project Evaluation and Review Technique (PERT) – U S Navy (1958) for the POLARIS missile program – Multiple task time estimates (probabilistic nature) – Activity-on-arrow network construction – Non-repetitive jobs (R & D work)
- 16. What is CPM ? ■ Critical Path Method = here we try to identify the critical path for completion of a project. Cricial = very important ■ When we are implementing a project, we are doing a series of activities, which are called project. There are many ways to do a project. In CPM, we try to pick up the path which consists of all the activities which cannot be delayed. This path requires greater attention.
- 17. Why is CPM more important ? ■ If an activity is on CPM, it cannot be delayed. Other activities can be delayed, but the activities on CPM cannot be delayed. Delay of one day will delay the project.
- 18. What is SLACK? ■You can delay other activities (other than Critical Path activities ). –Thus there is slack (means you can delay some activities ). ■ Slack denotes flexibility / freedom / ease on the part of those implementing the project
- 19. What is PERT ? ■ PERT = project evaluation and review technique ■ Here we try to look at each activity and try to find out expected time to complete the project.
- 20. What is the difference between PERT & CPM? ■ PERT gives us the best possible estimate of doing the project ( in time). ■ CPM tells us about activities which are critical (delay in these activities will delay the project
- 21. Network example Illustration of network analysis of a minor redesign of a product and its associated packaging. The key question is: How long will it take to complete this project ?
- 22. For clarity, this list is kept to a minimum by specifying only immediate relationships, that is relationships involving activities that "occur near to each other in time".
- 23. darla/smbs/vit Questions to prepare activity network ■ Is this a Start Activity? ■ Is this a Finish Activity? ■ What Activity Precedes this? ■ What Activity Follows this? ■ What Activity is Concurrent with this?
- 24. CPM calculation ■ Path – A connected sequence of activities leading from the starting event to the ending event ■ Critical Path – The longest path (time); determines the project duration ■ Critical Activities – All of the activities that make up the critical path
- 25. Forward Pass ■ Earliest Start Time (ES) – earliest time an activity can start – ES = maximum EF of immediate predecessors ■ Earliest finish time (EF) – earliest time an activity can finish – earliest start time plus activity time EF= ES + t Latest Start Time (LS) Latest time an activity can start without delaying critical path time LS= LF - t Latest finish time (LF) latest time an activity can be completed without delaying critical path time LS = minimum LS of immediate predecessors Backward Pass
- 26. CPM analysis ■ Draw the CPM network ■ Analyze the paths through the network ■ Determine the float for each activity – Compute the activity’s float float = LS - ES = LF - EF – Float is the maximum amount of time that this activity can be delay in its completion before it becomes a critical activity, i.e., delays completion of the project ■ Find the critical path is that the sequence of activities and events where there is no “slack” i.e.. Zero slack – Longest path through a network ■ Find the project duration is minimum project completion time
- 27. CPM Example: ■ CPM Network a, 6 f, 15 b, 8 c, 5 e, 9 d, 13 g, 17 h, 9 i, 6 j, 12
- 28. CPM Example ■ ES and EF Times a, 6 f, 15 b, 8 c, 5 e, 9 d, 13 g, 17 h, 9 i, 6 j, 12 0 6 0 8 0 5
- 29. CPM Example ■ ES and EF Times a, 6 f, 15 b, 8 c, 5 e, 9 d, 13 g, 17 h, 9 i, 6 j, 12 0 6 0 8 0 5 5 14 8 21 6 23 6 21
- 30. CPM Example ■ ES and EF Times a, 6 f, 15 b, 8 c, 5 e, 9 d, 13 g, 17 h, 9 i, 6 j, 12 0 6 0 8 0 5 5 14 8 21 21 33 6 23 21 30 23 29 6 21 Project’s EF = 33
- 31. CPM Example ■ LS and LF Times a, 6 f, 15 b, 8 c, 5 e, 9 d, 13 g, 17 h, 9 i, 6 j, 12 0 6 0 8 0 5 5 14 8 21 21 33 6 23 21 30 23 29 6 21 21 33 27 33 24 33
- 32. CPM Example ■ LS and LF Times a, 6 f, 15 b, 8 c, 5 e, 9 d, 13 g, 17 h, 9 i, 6 j, 12 0 6 0 8 0 5 5 14 8 21 21 33 6 23 21 30 23 29 6 21 4 10 0 8 7 12 12 21 21 33 27 33 8 21 10 27 24 33 18 24
- 33. CPM Example ■ Float a, 6 f, 15 b, 8 c, 5 e, 9 d, 13 g, 17 h, 9 i, 6 j, 12 0 6 0 8 0 5 5 14 8 21 21 33 6 23 21 30 23 29 6 21 3 9 0 8 7 12 12 21 21 33 27 33 8 21 10 27 24 33 9 24 3 4 3 3 4 0 0 7 7 0
- 34. CPM Example ■ Critical Path a, 6 f, 15 b, 8 c, 5 e, 9 d, 13 g, 17 h, 9 i, 6 j, 12
- 35. darla/smbs/vit PERT ■ PERT is based on the assumption that an activity’s duration follows a probability distribution instead of being a single value ■ Three time estimates are required to compute the parameters of an activity’s duration distribution: – pessimistic time (tp ) - the time the activity would take if things did not go well – most likely time (tm ) - the consensus best estimate of the activity’s duration – optimistic time (to ) - the time the activity would take if things did go well Mean (expected time): te = tp + 4 tm + to 6 Variance: Vt = 2 = tp - to 6 2
- 36. PERT analysis ■ Draw the network. ■ Analyze the paths through the network and find the critical path. ■ The length of the critical path is the mean of the project duration probability distribution which is assumed to be normal ■ The standard deviation of the project duration probability distribution is computed by adding the variances of the critical activities (all of the activities that make up the critical path) and taking the square root of that sum ■ Probability computations can now be made using the normal distribution table.
- 37. Probability computation Determine probability that project is completed within specified time Z = x - where = tp = project mean time = project standard mean time x = (proposed ) specified time
- 38. Normal Distribution of Project Time = tp Time x Z Probability
- 39. PERT Example Immed. Optimistic Most Likely Pessimistic Activity Predec. Time (Hr.) Time (Hr.) Time (Hr.) A -- 4 6 8 B -- 1 4.5 5 C A 3 3 3 D A 4 5 6 E A 0.5 1 1.5 F B,C 3 4 5 G B,C 1 1.5 5 H E,F 5 6 7 I E,F 2 5 8 J D,H 2.5 2.75 4.5 K G,I 3 5 7
- 41. PERT Example Activity Expected Time Variance A 6 4/9 B 4 4/9 C 3 0 D 5 1/9 E 1 1/36 F 4 1/9 G 2 4/9 H 6 1/9 I 5 1 J 3 1/9 K 5 4/9
- 42. PERT Example Activity ES EF LS LF Slack A 0 6 0 6 0 *critical B 0 4 5 9 5 C 6 9 6 9 0 * D 6 11 15 20 9 E 6 7 12 13 6 F 9 13 9 13 0 * G 9 11 16 18 7 H 13 19 14 20 1
- 43. PERT Example Vpath = VA + VC + VF + VI + VK = 4/9 + 0 + 1/9 + 1 + 4/9 = 2 path = 1.414 z = (24 - 23)/(24-23)/1.414 = .71 From the Standard Normal Distribution table: P(z < .71) = .5 + .2612 = .7612
- 44. Project Crashing ■ Crashing – reducing project time by expending additional resources ■ Crash time – an amount of time an activity is reduced ■ Crash cost – cost of reducing activity time ■ Goal – reduce project duration at minimum cost
- 45. Activity crashing Activity time Crashing activity Crash time Crash cost Normal Activity Normal time Normal cost Slope = crash cost per unit time
- 46. Time-Cost Relationship Crashing costs increase as project duration decreases Indirect costs increase as project duration increases Reduce project length as long as crashing costs are less than indirect costs Time-Cost Tradeoff time Direct cost Indirect cost Total project cost Min total cost = optimal project time
- 47. Project Crashing example 1 12 2 8 4 12 3 4 5 4 6 4 7 4
- 48. Time Cost data Activity Normal time Normal cost Rs Crash time Crash cost Rs Allowable crash time slope 1 2 3 4 5 6 7 12 8 4 12 4 4 4 3000 2000 4000 50000 500 500 1500 7 5 3 9 1 1 3 5000 3500 7000 71000 1100 1100 22000 5 3 1 3 3 3 1 400 500 3000 7000 200 200 7000 75000 110700
- 49. 1 12 2 8 3 4 5 4 6 4 7 4 R400 R500 R3000 R7000 R200 R200 R700 12 4 Project duration = 36 From….. To….. 1 7 2 8 3 4 5 4 6 4 7 4 R400 R500 R3000 R7000 R200 R200 R700 12 4 Project duration = 31 Additional cost = R2000
- 50. 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 •How long will the entire project take to be completed? What are the risks involved? •Which are the critical activities or tasks in the project which could delay the entire project if they were not completed on time? •Is the project on schedule, behind schedule or ahead of schedule? •If the project has to be finished earlier than planned, what is the best way to do this at the least cost? CPM/PERT can answer the following important questions:
- 51. Limitations to CPM/PERT ■ Clearly defined, independent and stable activities ■ Specified precedence relationships ■ Over emphasis on critical paths ■ Deterministic CPM model ■ Activity time estimates are subjective and depend on judgment ■ PERT assumes a beta distribution for these time estimates, but the actual distribution may be different ■ PERT consistently underestimates the expected project completion time due to alternate paths becoming critical To overcome the limitation, Monte Carlo simulations can be performed on the network to eliminate the optimistic bias
- 52. Computer Software for Project Management ■ Microsoft Project (Microsoft Corp.) ■ MacProject (Claris Corp.) ■ PowerProject (ASTA Development Inc.) ■ Primavera Project Planner (Primavera) ■ Project Scheduler (Scitor Corp.) ■ Project Workbench (ABT Corp.)
- 53. Gantt Charts • The Gantt chart is named after its originator Henry Gantt and displays a timetable for each activity of the project. Each activity is shown as a block or bar and drawn to scale in time. The timescale is usually drawn horizontally while the different activities are displayed on the vertical axis. • This chart is used for scheduling and is often used in conjunction with the project network to show the technological dependencies between activities. • The bars represent the earliest start and finish times of each activity of the example project. The gray lines following the activity bars represent the activity slack, and hence, shifting activities towards the end of these gray bars results in the corresponding LSS. Activities without slack (i.e. activities 1, 3, 5, 10, 12, 13 and 14) belong to the critical path and need the attention of the project manager.
- 59. All The best