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