MAR3203 - Exam 2

Importance of Project Management

strategic value of time-based competition, quality mandate for continual improvement

Project Planning

goal setting, defining the project, team organization

Project Scheduling

relate people, money, and supplies to specific activities and activities to each other

Project Controlling

monitor resources, costs, quality, and budgets; revise plans and shift resources to meet time and cost demands

Pert and CPM

Consider precedence relationships and interdependencies, each uses a different estimate of activity times

Determining the project schedule

Perform a Critical Path Analysis

-The critical path is the longest path through the network

-The critical path is the shortest time in which the project can be completed

-Any delay in critical path activities delays the project

-Critical path activities have no slack time

Slack

the length of time an activity can be delayed without delaying the entire project

Project crashing

shortening the duration of the project

crash cost per period

= (crash cost - normal cost)/(normal time - crash time)

Advantages of PERT/CPM

1. Especially useful when scheduling and controlling large projects

2. Straightforward concept and not mathematically complex

3. Graphical networks help highlight relationships among project activities

4. Critical path and slack time analyses help pinpoint activities that need to be closely watched

5. Project documentation and graphics point out who is responsible for various activities

6. Applicable to a wide variety of projects

7. Useful in monitoring not only schedules but costs as well

Limitations of PERT/CPM

1. Project activities have to be clearly defined, independent, and stable in their relationships

2. Precedence relationships must be specified and networked together

3. Time estimates tend to be subjective and are subject to fudging by managers

4. There is an inherent danger of too much emphasis being placed on the longest, or critical, path

Process strategy

The objective is to create a process to produce products that meets customer requirements within cost and other managerial constraints. Has 4 different strategies (Process, product, repetitive, mass)

Process Focus

-Facilities are organized around specific activities or processes

-General purpose equipment and skilled personnel

-High degree of product flexibility

-Typically high costs and low equipment utilization

-Product flows may vary considerably making planning and scheduling a challenge

Repetitive Focus

-Facilities often organized as assembly lines

-Characterized by modules with parts and assemblies made previously

-Modules may be combined for many output options

-Less flexibility than process-focused facilities but more efficient

Product Focus

-Facilities are organized by product

-High volume but low variety of products

-Long, continuous production runs enable efficient processes

-Typically high fixed cost but low variable cost

-Generally less skilled labor

mass customization

-The rapid, low-cost production of goods and service to satisfy increasingly unique customer desires

-Combines the flexibility of a process focus with the efficiency of a product focus

Selection of Equipment

-Decisions can be complex as alternate methods may be available

-Important factors may be

Cost

Cash flow

Market stability

Quality

Capacity

Flexibility

Flexibility

the ability to respond with little penalty in time, cost, or customer value. May be difficult and expensive

Flowchart

shows the movement of materials

Time-Function Mapping

shows flows and time frame

Value Stream Mapping

-Where value is added in the entire production process, including the supply chain

-Extends from the customer back to the suppliers

service blueprint

-Focuses on the customer and provider interaction

-Defines three levels of interaction

-Each level has different management issues

-Identifies potential failure points

Process Redesign

the fundamental rethinking of business processes to bring about dramatic improvements in performance

capacity

-The throughput, or the number of units a facility can hold, receive, store, or produce in a period of time

- determines fixed costs

-determines if demand will be satisfied

Design Capacity

The maximum theoretical output of a system

effective capacity

-the capacity a firm can expect to achieve, given current operating constraints

-often lower than design capacity

Bottleneck

-the limiting factor or constraint in a system

-has lowest effective capacity in a system

capacity analysis

determines the throughput capacity of workstations in a system

Bottleneck time

the time of the slowest workstation (the one that takes the longest) in a production system

throughput time

The time it takes a unit to go through production from start to end without waiting

Break-Even analysis

-Technique for evaluating process and equipment alternatives

-Objective is to find the point in dollars and units at which cost equals revenue

-Requires estimation of fixed costs, variable costs, and revenue

Drum-Buffer-Rope

a concept in theory of constraints where the drum sets the pace of production, buffer is placed in front of the bottleneck, and rope communicates changes

pace>product>communication

Theory of Constraints

1. Identify constraints

2. Develop Plan

3. Focus resources for step 2

4. Reduce the effects of constraints by offloading work or expanding capacity

5. Once overcomed, start over and find new constraints

Process focused

Low-volume, high-variety production

Organized around processes such as job shops, hospitals, resturants

Product-focused

high-volume, low-variety production facilities.

frequently described as continuous process models because they are organized around finished products.

Which of the following industries is most likely to have low equipment utilization?

Restaurants bc theyre proccess focused

Which of the following transformations generally has the highest equipment utilization?

Product-focused

Which of the quadrants in the service process matrix has high labor intensity and high customization?

professional service

Dummy activities________

used when two AOA network activities have identical starting and ending events.

PERT analysis computes the variance of the total project completion time as which of the following?

The sum of the variances of all activities on the critical path.

PERT analysis assumes:

-no activity in the network must be repeated.

-critical and non-critical path activities must be completed.

CPM assumes:

activity times are known with certainty.