pert and crm examples full class course.pdf

Class project

1. PROJECTMANAGEMENT
&
NETWORK ANALYSIS
(CPM &PERT)

2. What is aProject?
Aprojectisaninterrelatedsetofactivitiesthathas
definitestartingandendingpointsandthatresultina
uniqueproductorservice
Cutsacrossorganizationallines–theyneedvaried
skillsofdifferentprofession
Uncertaintieslikenewtechnology&external
environmentcanchangethecharacteroftheproject
Personnel,materials,facilitiesetc.aretemporarily
assembledtoaccomplishagoalwithinaspecifiedtime
frameandthendisbanded
Uponfinish,aprojectreleaseslotofresourceswhich
wereengagedinexecutionoftheproject

3. Examples ofProject
Hosting a College AnnualFunction
Plan a Space Shuttle toMars
Construct a Plant to Manufacture BallBearings
Plan forWedding
Designing and Implement a ComputerSystem
Designing a ABSSystem
Executing Environmental Clean-up Of a ContaminatedSite
Erect a New Lab in the Dept. of MechanicalEngineering

4. •Aprojectisaoneshot,timelimited,goal
directed,majorundertaking,requiringthe
commitmentofvariedskills&resources.
•It also describes project as a combination
ofhumanandnonhumanresourcespooled
togetherinatemporaryorganizationto
achievespecificpurpose
DefinitionofProject

5. ProjectAttributes
Aproject:
•Has a uniquepurpose.
•Istemporary.
•Is developed using progressiveelaboration.
•Requires resources, often from various
areas.
•Should have a primary customer or
sponsor.
•Theprojectsponsorusuallyprovides
the direction and funding for theproject.
•Involvesuncertainty.

6. Projectand Program Managers
Projectmanagersworkwithprojectsponsors,
projectteams,andotherpeopleinvolvedinprojects
tomeetprojectgoals.
Program:“Agroupofrelatedprojectsmanagedina
coordinatedwaytoobtainbenefitsandcontrolnot
availablefrommanagingthemindividually.”
Programmanagersoverseeprogramsandoftenact
asbossesforprojectmanagers.
Projectmanagementis“theapplicationofknowledge,
skills,toolsandtechniquestoprojectactivitiesto
meetprojectrequirements.”

7. ProjectManagement
ToolsandTechniques
Projectmanagementtoolsandtechniquesassist
projectmanagersandtheirteamsinvarious
aspectsofprojectmanagement.
Specifictoolsandtechniquesinclude:
Projectcharters,scopestatements,andWBS
(scope).
Ganttcharts,networkdiagrams,criticalpath
analyses,criticalchainscheduling(time).
Costestimatesandearnedvaluemanagement
(cost).

8. NETWORK ANALYSIS
Network Analysis refers to a number of techniques for
the planning and control of complexprojects.
Thetwomostfrequentlyusedformsofnetwork
planningare:
1.ProgrammeEvaluationandReviewTechnique
(PERT)
2.Critical Path Method (CPM)

9. WHAT ISANETWORK?
Anetworkisagraphicaldiagram
consistingofcertainconfigurationof“Arrows”()
and“Nodes”(O)forshowingthelogicalsequence
ofvarioustaskstobeperformedtoachievethe
projectobjective.

10. PERT / CPMTechniques
TheinitialstepinPERT/CPMproject
schedulingprocessisthedeterminationofall
specificactivitiesthatcomprisetheproject
andtheirrelationships.

11. EXAMPLE
ActivityDescriptionDuration(in
weeks)
Immediate
predecessor
A Obtain thebudget
approval
2 -
B Obtain themachine 5 A
C Hire theoperator 1 A
D Install themachine 1 B
E Train theoperator 6 C
F Produce thegoods 1 D,E

12. TERMS USED IN ANETWORK
1.Activity:Aneffortthatisrequiredto
completeapartoftheproject.Itis
representedby“”.
2.Node:Itrepresentsthebeginningor
completionofanactivity.Itis
representedby“”

13. RULES OF NETWORKCONSTRUCTION
1.Each defined activity is represented by one and
only one arrow in thenetwork.
2.Beforeanactivitycanbeundertaken,all
activitiesprecedingitmustbecompleted.
3.Thearrowsdepictingvariousactivitiesare
indicativeoflogicalprocedureonly.The
lengthandbearingofthearrowsareofno
significance.

14. 4.Thearrowdirectionindicatesthegeneral
progression in time. Head events and Tailevents.
5.Whenanumberofactivitiesterminateatoneevent,
itindicatesthatnoactivityemanatingfromthat
eventmaystartunlessallactivitiesterminating
therehavebeencompleted.
6.Events are identified bynumbers.
7.Theactivitiesareidentifiedbythenumbersoftheir
startingandendingeventsorbyalphabets.

15. 8.A network should have only one initial andterminal
node.
MergeEvent
A
B
C
A
B
BurstEvent
C

16. 10.Parallelactivitiesbetweentwoevents,without
interveningevents,areprohibited.Whentwoor
moreparallelactivitiesinaprojecthavethesame
headandtailevents,dummyactivitiesareneededin
constructingthenetwork.
Dummyactivitiesdonotconsumetimeor
resources.Anefficientnetworkcontainsa
minimumnumberofdummyactivitiesrequiredto
portraythecorrectprecedencerelationships.
11.Looping is not permitted in anetwork.

17. NETWORK SYMBOLS
SYMBOL MEANING
Activity
Event
Activity A must be completed
before Activity Bcompleted
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
& viceversa

18. SAMPLENETWORK

19. DUMMYACTIVITY

20. CRITICAL PATHMETHOD
CPMaimsatthedeterminationofthe
timetocompleteaprojectandthe
importantactivitiesonwhicha
managershallfocusattention.

21. PROCEDURE
Considerallthepathsinaproject,beginningwith
thestarteventandstoppingattheendevent.
Foreachpath,calculatethetimeofexecution.
Thepathwiththelargesttimeiscalledthecritical
pathandtheactivitiesalongthispatharecalled
criticalactivitiesorbottleneckactivities.

23. PERT
(Project or Program Evaluation
and ReviewTechniques)

24. PROJECT EVALUATION REVIEWTECHNIQUE
Inthecriticalpathmethod,thetimeestimatesareassumedtobe
knownwithcertainty.Incertainprojectslikeresearchand
development,newproductintroductions,itisdifficulttoestimate
thetimeofvariousactivities.
HencePERTisusedinsuchprojectswithaprobabilisticmethodusingthree
timeestimatesforanactivity,ratherthanasingleestimate,asshownin
Figure
OptimistictimetO:
Itistheshortesttimetakentocompletethe
activity.Itmeansthatifeverythinggoeswell
thenthereismorechanceofcompletingthe
activitywithinthistime.
Mostlikelytimetm:
Itisthenormaltimetakentocompletean
activity,iftheactivitywerefrequentlyrepeated
underthesameconditions.
Pessimistictimetp:
Itisthelongesttimethatanactivitywouldtaketo
complete.Itistheworsttimeestimatethatan
activitywouldtakeifunexpectedproblemsare
faced.

25. Takingallthesetimeestimatesintoconsideration,theexpected
timeofanactivityisarrivedat.
The average or mean (ta)
valueoftheactivityduration
is givenby,
Thevarianceoftheactivity
timeiscalculatedusingthe
formula,
ProbabilityforProjectDuration
Theprobabilityofcompletingthe
projectwithinthescheduledtime
(Ts)orcontractedtimemaybe
obtainedbyusingthestandard
normaldeviatewhereTeisthe
expected time of project
completion.
Probability of completing the
projectwithinthescheduledtime
is,

26. An R & D project has a list of tasks to be performed whose time
estimatesaregivenintheTable8.11,asfollows.
Example Problem ofPERT
a.Draw the projectnetwork.
b.Find the criticalpath.
c.Findtheprobabilitythattheproject is completed in 19 days. If the
probabilityislessthan20%, findtheprobabilityofcompletingitin24days.

27. Time expected for each activity is
calculated using the formula (5):
Similarly,theexpectedtimeis
calculated for all theactivities.
Thevarianceofactivitytimeis
calculatedusingtheformula(6).
Similarly,variancesofallthe
activities arecalculated.

28. calculatethetimeearliest(TE)andtimeLatest(TL)forallthe
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 networkdiagram:

29. C)Theprobabilityofcompletingtheprojectwithin19
daysisgivenby,P(Z<Z0)
To find Z0,
Thus, the probability of completing the R & D project in 19 daysis
9.01%.

30. Sincetheprobabilityofcompletingtheprojectin19
daysislessthan20%Asinquestion,wefindthe
probabilityofcompletingitin24days.

31. COSTANALYSIS
Thetwoimportantcomponentsofanyactivityarethecostandtime.Costis
directly proportional to time andvice versa.
Forexample,inconstructingashoppingcomplex,theexpectedtimeof
completioncanbecalculatedusingthetimeestimatesofvariousactivities.Butif
theconstructionhastobefinishedearlier,itrequiresadditionalcosttocomplete
theproject.Weneedtoarriveatatime/costtrade-offbetweentotalcostof
projectandtotaltimerequiredtocompleteit.
Normaltime:
Normal time is the time required tocomplete
theactivityatnormalconditionsandcost.
Crashtime:
Crashtimeistheshortestpossibleactivity
time;crashingmorethanthenormaltime
willincreasethedirectcost.
CostSlope
Cost slope is the increase in cost per unit of
time saved by crashing. A linear cost curve
is shown in Figure8.27.

32. Example
Anactivitytakes4daystocompleteatanormalcostofRs.500.00.Ifitis
possibletocompletetheactivityin2dayswithanadditionalcostofRs.700.00,
whatistheincrementalcostoftheactivity?
Incremental Cost or CostSlope
Itmeans,ifonedayisreducedwehavetospendRs.100/-extraperday.
ProjectCrashing
Procedure forcrashing
Step1:DrawthenetworkdiagramandmarktheNormaltimeandCrashtime.
Step2:CalculateTEandTLforalltheactivities.
Step3:Findthecriticalpathandotherpaths.
Step4:Findtheslopeforallactivitiesandranktheminascendingorder.

33. Step5:Establishatabularcolumnwithrequiredfield.
Step6:Selectthelowestrankedactivity;checkwhetheritisacriticalactivity.If
so,crashtheactivity,elsegotothenexthighestrankedactivity.
Note:Thecriticalpathmustremaincriticalwhilecrashing.
Step7:Calculatethetotalcostofprojectforeachcrashing
Step8:RepeatStep6untilalltheactivitiesinthecriticalpatharefully
crashed.
Example
The following Table 8.13 gives the activities of a construction project and
otherdata.
Iftheindirectcostis Rs.20perday,crashtheactivitiestofindthe
minimumdurationoftheprojectandtheprojectcostassociated.

34. Solution
Fromthedataprovidedinthetable,drawthenetworkdiagram(Figure8.28)
and find the criticalpath.
Fromthediagram,weobserve
thatthecriticalpathis1-2-5with
projectdurationof14days
ThecostslopeforallactivitiesandtheirrankiscalculatedasshowninTable8.14

35. TheavailablepathsofthenetworkarelisteddowninTable8.15
indicatingthesequenceofcrashing(seeFigure8.29).
The sequence of crashing and
the total costinvolved is given
in Table 8.16 Initial directcost
= sum of all normal costsgiven
= Rs.490.00

36. Itisnotpossibletocrashmorethan10days,asalltheactivities
inthecriticalpatharefullycrashed.Hencetheminimum
projectdurationis10dayswiththetotalcostofRs.970.00.
Activity
Crashed
Project
Duration
CriticalPathDirect Cost in(Rs.)IndirectCost
in(Rs.)
Total
Costin
(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) + (2x
100) + (1 x 10) + (2x
20) =770
10 x 20=
200
970
3 –4(2)

37. Assignment

40. a.Draw the project networkdiagram.
b.Calculatethelengthandvarianceofthecriticalpath.
c.Whatistheprobabilitythatthejobsonthecriticalpathcanbe
completed in 41days?

41. THANKYOU