Operations Management - Project Management

Project Management

A temporary and customized initiative that consists of many smaller tasks and activities that must be coordinated and completed.
- Goal: To finish the entire initiative on time and within budget.

Planning, directing, and controlling resources (people, equipment, material, etc.) to meet the technical, cost, and time constraints of the project.

At the highest levels of an organization, management often involves juggling a portfolio of projects.
Defines a plan and organizes chaos.
Establishes a schedule and plan.
Facilitates learning from failure.

Project definition: Defining goals, scope, risks, budget, timeline, and resources.
Project planning:
- Identifying the activities that must be completed and the sequence to perform them.
- Determining resource and financing needs for each activity.
Project scheduling: Specifying a time schedule for the completion of each activity.
Project control: Establishing controls for determining progress and responding to problems.

Activities: Discrete tasks that consume resources and time.
Immediate predecessors: Activities that must be completed immediately before an activity may start.
Precedence relationships: Ensure that activities are performed in the proper sequence when they are scheduled.

Consists of nodes and arcs, which define the precedence relationships between activities.
- Nodes: Set of circles or boxes, which represent activities.
- Arcs: Set of arrows.
This is called an activity-on-node (AON) network representation.

Critical path: Sequence of activities that takes the longest time and defines the total project completion time.
We need to find two starting times and two ending times for each activity to conduct CPM:
- Earliest Start (ES): Earliest possible date on which an activity can start.
- Earliest Finish (EF): Earliest possible date on which an activity can be completed. EF = ES + T, where T is activity duration.
- Latest Start (LS): Latest possible date that an activity may begin without delaying the project completion. LS = LF - T
- Latest Finish (LF): Latest possible date an activity can be completed without delaying the project completion. LF = LS + T

Slack time is the length of time an activity can be delayed without delaying the entire project. Slack = LS – ES or LF – EF
Critical Path: Activities with Zero slack are critical activities.

Identification number (N) of the activity.
Normal time (T) to complete the activity.
Earliest start [ES] time.
Earliest finish (EF) time.
Latest start [LS) time.
Latest finish (LF) time.
Slack time (ST)—the length of time an activity can be delayed without affecting the competition date for the entire project, computed as ST = LS - ES = LF – EF

Forward Pass
- Proceed through project diagram from start to finish activity.
- Provide earliest start and earliest finish times for each activity
- These are referred to as ES and EF.
Backward Pass
- Proceed through project diagram from finish to start (Reverse).
- Provide latest start and latest finish times for each activity.
- These are referred to as LS and LF.

Wildcat software company helps companies implement software integration projects.
Project manager must coordinate the design and installation of the new software system.
Project objective: To develop an integrative software package within a predetermined budget and promised project completion date that meet all system requirements while providing adequate interfaces with legacy systems

Gantt charts graphically depict the project schedule.
Project management software can assist in allocating limited resources that are shared among all the activities.

Crashing a project: Reducing the total time to complete the project to meet a revised due date.
Crash time: Shortest possible time the activity can realistically be completed.
Crash cost: Total additional cost associated with completing an activity in its crash time rather than in its normal time.
Crash cost per unit of time = (Crash cost - normal cost) / (normal time - crash time)
Crashing an activity: Reducing its normal time, possibly up to its limit, the crash time.

Project evaluation and review technique (PERT) is another approach to project management.
PERT was developed to handle uncertainties in activity completion times.
In contrast, CPM assumes that activity times are constant.

PERT planning usually involves the following steps:
- Identifying Tasks and Milestones
- Placing the Tasks in a Proper Sequence
- Network Diagramming

PERT estimates are obtained for each activity
- Optimistic time - Activity time under ideal conditions
- Most probable time - Most likely activity time under normal conditions
- Pessimistic time - Activity time if breakdowns or serious delays occur

Expected Time = (a + 4m + b)/6
Variance = (b – a)^2/36
- Where:
  - a is the optimistic time estimate
  - m is most likely or probable
  - b is the pessimistic time estimate
PERT assumes a beta probability distribution.

Expected Time = (a + 4m + b)/6
Variance = (b – a)^2/36
The z-value for the normal distribution a T =25 is given by Z = (25-22)/1.697 =1.77
Variance (\sigma^2) of the critical path activities: 1.78+0.11+ 0.44+0.11+0.11+0.11+0.11 =2.78
Standard Deviation = \sqrt{2.78} = 1.67
Using Z score equation
Using Z=1.77 and the standard normal distribution table
We find that the probability of the project meeting the 25 week deadline is (PZ <= 1.77) = 0.9616 = 96.16%
1.697weeks Z = (25-22)/1.697 =1.77