MGT 4330 Exam 2

planning horizon

Estimates of current events are close to 100 percent accurate but are reduced for more distant events

work package in the WBS is assignable for estimation

defines work (what) identifies time to complete a work package (how long) identifies a time-phased budget to complete a work package (cost) identifies resources needed to complete a work package (how much) identifies a single person responsible for units of work (who) identifies monitoring points for measuring progress (how well)

PERT and GANTT Charts

depict the project activities that must be completed including > their logical sequences > their interdependencies > their durations > their start and finish times > the critical path or the longest path(s) through the network enhances communication among project stakeholders provides an estimate of project duration provides the basis for budgeting the cash flow identifies critical activities that should not be delayed provides for scheduling resources (e.g. labor and equipment) highlights project activities for compressing the project duration

risk register

details all identified risks, including descriptions, category, probability of occurring, impact, responses, contingency plans, owners, and current status

leveling

techniques used to examine a project for an unbalanced use of resources and for resolving resource overallocation

total slack

the amount of time an activity can be delayed and not affect the project duration (TS - LS - ES or FF - EF) is how long an activity can exceed its early finish date without affecting the project end date or an imposed completion date is simply the difference between LS and ES or LF and EF

basic rules to follow in developing project networks

> networks typically flow from left to right > an activity cannot begin until all preceding connected activities have been completed > arrows on networks indicate precedence and flow; arrows can cross over each other > each activity should have an identification number > an activity identification number must be larger than any of the activities that precede it > looping is not allowed > conditional statements are not allowed > experience suggests that when there are multiple starts, a common start node can be used to indicate a clear project beginning on the network; similarly, a single project end node can be used to indicate a clear ending

white elephant

A burdensome possession which is not easily disposed of and whose cost (particularly upkeep) is out of proportion with its usefulness.

delphi method

A group method to predict future events—e.g., time, cost.

learning curve

A mathematical curve used to predict a pattern of time reduction as a task is performed over and over

ratio method

A method that uses the ratio of past actual costs for similar work to estimate the cost for a potential project. This macro method of forecasting cost does not provide a sound basis for project cost control, since it does not recognize differences among projects.

overall schedule slippage

Because projects often share resources, delays in one project can have a ripple effect and delay other projects

reference class forecasting (RCF)

A sophisticated forecasting method in which you take an external view and forecast project costs based on actual outcomes of similar projects.

resource bottlenecks

Delays and schedules are extended as a result of shortages of critical resources that are required by multiple projects

bottom-up estimates

Detailed estimates of work packages, usually made by those who are most familiar with the task (also called micro estimates).

forward pass - earliest times

ES - how soon can the activity start EF - how soon can the activity finish TE - how soon can the project be finished you can ADD add activity times along each path in the networked (ES + DUR = EF) you can carry the EF to the next activity where it becomes its ES if the next succeeding activity is a MERGE activity, you select the largest EF of ALL its immediate predecessor activities

padding estimates

In work situations where you are asked for time and cost estimates, most of us are inclined to add a little padding to increase the probability and reduce the risk of being late.

backward pass - latest times

LS - how late can the activity start LF - how late can the activity finish CP - which activities represent the critical path SL - how long can the activity be delayed\ you SUBTRACT activity times along each path starting with the project end activity (LF - DUR = LS) you carry the LS to the preceding activity to establish its LF if the next preceding activity is a BURST activity, you select the smallest LS of all its immediate successor activities to establish its LF

escalating risk

Notifying the appropriate people within the organization of the threat

function points

Points derived from past software projects to estimate project time and cost, given specific features of the project.

top-down estimates

Rough estimates that use surrogates to estimate project time and cost (also called macro estimates).

apportionment

The Costs allocated to a specific segment of a project by using a percentage of planned total cost—for example, framing a house might use 25 percent of the total cost, or coding a teaching module 40 percent of total cost.

early time

The earliest an activity can start or finish based on network logic, the data date, and any schedule constraints.

late time

The latest an activity can start or finish without delaying the completion of the project.

critical path

The longest path through a network diagram that determines the earliest completion of a project distinguished by identifying the collection of activities that all have the same minimum slack the network path(s) that has (have) the least slack in common the longest path through the activity network the shortest expected time in which the entire project can be completed important because it impacts completion time where you put the best people on where you pay extra attention when doing risk assessment where you don't look when other managers are asking to "borrow" people or equipment where you look when you don't have time to monitor all activities

project complexity

Time to implement new technology has a habit of expanding in an increasing, nonlinear fashion. Sometimes poorly written scope specifications for new technology result in errors in estimating times and costs.

time-phased budget baseline

a cost baseline that is derived from the WBS and project schedule the budgeted costs are distributed to mirror the project schedule

sensitivity

a function of the number of critical or near-critical paths likelihood the original critical path(s) will change once the project is initiated a network schedule that has only one critical path and noncritical activities that enjoy significant slack would be labeled "insensitive"

project cost-duration graph

a graph that plots project cost against time it includes direct, indirect, and total costs for a project over a relevant range of time

activity-on-node (AON)

a method for drawing project networks the activity is on the node (rectangle)

activity-on-arrow (AOA)

a method for drawing project networks the activity is shown as an arrow

template method

a method that uses a prepared form to develop project networks, costs, and time estimates

benefits of risk management

a proactive rather than reactive approach reduces surprises and negative consequences prepares the project manager to take appropriate action provides better control over the future improves chances of reaching project objectives on time, within budget, and of meeting required performance > project success!

resource-constrained project

a project that assumes resources are limited (fixed) and therefore time is variable assumes the level of resources available cannot be exceeded resources are fixed and time is flexible if the resources are inadequate, it will be acceptable to delay the project

time-constrained project

a project that assumes time is fixed and if resources are needed, they will be added must be completed by an imposed date time (project duration) is fixed and resources are flexible if required, resources can be added to ensure the project is completed by a specific fate

heuristics

a rule of thumb used to make decision frequently found in scheduling projects ex: schedule critical activities first; then schedule activities with the shortest duration

splitting

a scheduling technique in which work is interrupted on one activity and the resource is assigned to another activity for a period of time, then reassigned to work on the original activity interrupting work on one task and assigning the resources to work on a different task for a period of time, then reassigning them to work on the original task

path

a sequence of connected activities

hammock activity

a special-purpose, aggregate activity that identifies the use of fixed resources or costs over a segment of a project - e.g., a consultant it derives its duration from the time span between other activities

resource smoothing

a technique that uses slack to reduce peak resource demand to increase resource utilization involves attempting to even out varying demands on resources by delaying non-critical activities (using slack) to lower peak resource demand and, thus, increasing resource utilization when resources are adequate over the life of the project

fast tracking

accelerating project completion, typically by rearranging the network schedule and using start-to-start lags

parallel activities

activities that can be carried out concurrently or simultaneously

share

allocate some or all of the ownership of an opportunity to another party who is best able to capture the opportunity for the benefit of the project

time buffers

amounts of time used to cushion against potential delays in the project > add to activities with severe risks > add to merge activities that are prone to delays > add to noncritical activities to reduce the likelihood that they will create another critical path > add to activities that require scarce resources

burst activity

an activity that has more than one activity immediately following it

merge activity

an activity that has more than one activity immediately preceding it

risk management

an attempt to recognize and manage potential and unforeseen trouble pots that may occur when the project is implemented risk event - what can go wrong consequences - how to minimize the risk event's impact anticipation - what can be done before an event contingency plans - what to do when an event occurs

phase estimating

an estimating method that begins with a macro estimate for the project and then refines estimates for phases of the project as it is implemented

range estimating

an estimating technique in which multiple estimating points are given based on some logic (i.e. high vs low or best case/worst case/most likely case)

opportunity

an event that can have positive impact on project objectives

risk

an uncertain event or condition that if it occurs, has a positive or negative effect on project objectives planning cannot overcome or control risk

scenario analysis

assesses the significance of each risk event in terms of probability and impact

technical risks

backup strategies if chosen technology fails assess whether technical uncertainties can be resolved

accept

be willing to take advantage of the opportunity if it occurs, but not taking action to pursue it

inefficient resource utilization

because projects have different schedules and requirements, there are peaks and valleys in overall resource demands

people

can influence quality of time and cost estimates

risk of the absence of a contingency plan

cause a manager to delay or postpone the decision to implement a remedy lead to panic and acceptance of the first remedy suggested makes the decision making under pressure which can be dangerous and costly

avoiding risk

changing the project plan to eliminate the risk or condition

time and cost databases

collections of actual versus estimates times and costs of work packages over many projects, used for estimating new project tasks and their expected possible error

direct costs

costs that are clearly charged to a specific work package - usually labor, materials, or equipment

indirect costs

costs that cannot be traced to a particular project or work package

contingency reserves

cover identified risks and allocated to specific segments or deliverables of the project

management reserves

cover unidentified risks and are allocated to risks associated with the total project

concurrent engineering

cross-functional teamwork in new-product development projects that provides product design, quality engineering, and manufacturing process engineering all at the same time

nonproject factors that influence the quality of estimates

equipment down-time holidays vacations legal limits

funding risks

evaluate the risk of reductions in funding - a cut in the project

risk assessment form

evaluates the severity, probability of risk events and its detection difficulty

schedule risk

expedite or crash the project to get it back on track schedule activities in parallel or use start-to-start lag relationships use the best people for high-risk tasks

contingency funds

funds to cover project risk - identified and unknown for control purposes, they are divided into: > contingency reserves > management reservees

risk identification

generate a list of all the possible risks that could affect the project through brainstorming and other problem identifying techniques focus on the events that could produce consequences, not on project objectives identify the macro risk then specific areas can be checked use risk profile (a list of questions) to address traditional areas of uncertainty on a project

change management systems

identify proposed changes list expected effects of proposed change(s) on schedule and budget review, evaluate, and approve or disapprove of change formally negotiate and resolve conflicts of change, condition, and cost communicate changes to parties affected assign responsibility for implementing change adjust master schedule and budget track all changes that are to be implemented

benefits of change control system

inconsequential changes are discouraged by the formal process costs of changes are maintained in a log integrity of the WBS and performance measures is maintained allocation and use of contingency and management reserves are tracks responsibility for implementation is clarified implementation of change is monitored scope changes will be quickly reflected in baseline and performance measures

risk control

involves executing the risk response strategy monitoring triggering events initiating contingency plans watching for new risks

contingency plan

is an alternative plan that will be used if a possible foreseem risk event becomes a reality is a plan of action that will reduce or mitigate the negative impact of the risk event is not a part of the initial implementation plan and only goes into effect after the risk is recognized

project structure

is chosen to manage the project and will influence time and cost estimates speed: dedicated reduce costs: matrix

retaining risk

making a conscious decision to accept the risk of an event occurring

establishing a change management system

monitoring, tracking, and reporting risk fostering an open organization environment repeating risk identification/assessment exercises assigning and documenting responsibility for managing risk

escalate

notify the appropriate people within the organization of the opportunity

transferring risk

passing risk to another party ex: fixed-price contracts, insurance, build-own-operate-transfor (BOOT) provisions

factors influencing the quality of estimates

planning horizon project complexity people project structure and organization padding estimates organizational culture nonproject factors

risk severity matrix

prioritizes which risk to address failure mode and effects analysis (FMEA) extends the risk severity matrix by including ease of detection in the equation risk value = impact x probability x detection

sources of change

project scope implementation of contingency plans improvement changes by project team

mitigating risk

reducing the likelihood that the event will occur reducing the impact that the adverse event would have on the poject

estimating guidelines for times, costs, and resources

responsibility the use of several people to estimate normal conditions time units independence contingencies risk assessment added to the estimate to avoid surprises to stakeholders

cost risks

review price to avoid the trap of using one lump sum to cover price risks

resource-constrained scheduling

scheduling a project in which resources are inadequate occurs when the resources are not adequate to meet peak demands the late start of some activities must be delayed, and the duration of the project may be increased

exploit

seek to eliminate the uncertainty associated with an opportunity to ensure that it definitely happens

organizational culture

significantly influences project estimates in some orgs, padding is encouraged other orgs encourage accuracy

enhance

take action to increase the probability and/or the positive impact of an opportinity

activity

task of the project that consumes time while people/equipment either work or wait an element of the project that requires time

lag time

the latest an activity can start or finish without delaying the completion of the project

free slack (FS)

the maximum amount of time an activity can be delayed from its early start (ES) without affecting the early start of any activity immediately following it the amount of time an activity can be delayed without delaying any immediately following (successor) activity is how long an activity can exceed its early finish date without affecting the early start dates of any successor(s) allows flexibility in scheduling scarce resources occurs only activity at the end of a chain of activities, where you have a merge activity

crash point

the most a project activity time can realistically be compressed with the resources available to the organization

planned value (PV)

the planned time-phased baseline of the value of the work scheduled previously this was called budgeted cost of work schedule (BCWS)

lag relationship

the relationship between the start and/or finsih of a project activity and the start and/or finish of another activity the most common are (1) finish-to-start, (2) finish-to-finish, (3) start-to-start, and (4) start-to-finish

crash time

the shortest time an activity can be completed (assuming a reasonable level of resources)

each time the output quantity doubles

the unit labor hours are reduced at a constant rate

crash

to shorten an activity or a project

overhead costs

typically, organizational costs that are not directly linked to a specific project these costs cover general expenses such as upper management, legal, market promotion, and accounting overhead costs are usually charged per unit of time or as a percentage of labor or materials

probability analysis

uses statistical techniques in assessing project risk decision trees, net present value (NPV), program evaluation, and review technique (PERT), PERT simulation