Chapter 5

The main planning processes performed as part of project cost management

-Planning cost management - Estimating cost - Determining the budget

Management Reserve plus

the cost baseline equals the project buget.

Project Schedule

the main output of the schedule development process and it is often displayed in a Gantt chart

By better understanding the work package,

the team can setter define what activities are required to create the specific deliverable

There are 4 basic attributes

- Mandatory Dependencies - Discretionary Dependencies - External Dependencies - Internal Dependencies An activity can have two of these attributes.

The Main Documents

- Schedule Management Plan - Activity List and Attributes - Milestone List - Project Schedule Network Diagram - Activity Duration Estimates - Schedule Baseline - Project Schedule - Project Calendars

The Main Planning Processes

-Planning Schedule Management - Defining Activities - Sequencing Activities Durations - Developing the Project Schedule

Activity-On-Arrow (AOA) approach or Arrow Diagramming Method (ADM)

A network diagramming technique in which activities are represented by arrows and connected at points called nodes to illustrate the sequence of activities.

Cost baseline

A time-phased budget that project managers use to measure and monitor cost performance

AOA

Activity-On-Arrow

Sequencing Activities

After defining project activities, the next step in project schedule management is activity sequencing. Activity sequencing involves reviewing the activity list and attributes, project scope statement, and milestone list to determine the relationship or dependencies between activities, also involves evaluating the reasons for dependencies and the different types of dependencies.

Cost Estimation Tool and Techniques

Analogous Estimates/ (Top-Down Estimates) Bottom-up Estimates Parametric Modeling

Discretionary Dependencies

Are defined by the project team. Discretionary dependencies are sometimes referred to as soft logic and should be used with care because they limit later scheduling options.

Murphy's Law

If something can go wrong, it will.

Bottom-Up Estimating

Involve estimating individual activities and summing them to get a project total

Eternal Dependencies

Involve relationship between project and non-project activities. The installation of new software might depend on delivery of new hardware from an external supplier.

Activity

Is a distinct, scheduled portion of work performed during the course of a project..

Main Disadvantage of Fast Tracking

It can end up lengthening the project schedule, because starting some tasks too soon often increases project risk and results in rework.

Planning Schedule Management

The purpose of this process is to determine the policies, procedures, and documentation for planning, developing, managing, executing, and controlling the project schedule.

Why are the activities only created for the work packages, and not for all deliverable on the WBS?

WBS 100% RULE: Because the WBS defines the total scope of the project, work should not be done on a project if it is not included in the WBS. This is a critical point in the definition of the WBS: The WBS contains 100% of the deliverables (often called "work") of the project- not 95%, not 102% but 100%.

The WBS is often expanded during the

activity definition process as the project team members may identify other deliverables required to complete the project.

Project Schedule Network Diagram

are the preferred technique for showing activity sequencing for projects.

Internal Dependencies

are within the project team's control, such as testing a machine that must be first assembled, where all the work is done inside the team.

Optimistic Estimate

based on a best-case scenario

Pessimistic Estimate

based on a worst-case scenario

The Theory of Constrains (TOC)

based on the fact that, like a chain with its weakest link, any complex system at point in time often has only one aspect or constraint that limits its ability to achieve more of its goal.

Project Budget

cost baseline + management reserves

Fast Tracking

involves doing activities in parallel that you would normally do in sequence

Project Schedule Management

involves the processes required to ensure timely completion of a project.

The goal of the activity

definition process is to ensure that project team members have complete understanding of all the work they must do so that they can start scheduling the work.

Human Resources, Payroll, or Accounting Departments

determine these labor rates and apply the appropriate amounts for benefits and overhead so the total labor costs are included in the estimate

Planning Cost Management

determining the policies, procedures, and documentation that will be used for planning, executing, and controlling project cost.

Estimating Costs

developing an approximation or estimate of the costs of the resources needed to complete a project The Main Documents - Cost Management Plan - Cost Estimates - Basis of Estimates - Cost Baseline -Project Funding Requirements

Work Package Cost

estimates plus any contingency reserves associated with them create the control accounts

Activity List

is a tabulation of activities to be included on a project schedule. The list should include the activity name, and activity identifier or number, and a brief description of the activity.

Three-Point Estimate

is an estimate that includes an optimistic most likely and pessimistic estimate such as three weeks, four weeks, and five weeks, respectively.

Project Cost Management

The processes required to ensure that the project is completed within the approved budget

Defining Activites

The project manger starts with the project charter and then develops a project scope statement and WBS, as dictionary, project management plan, and other related information, the project team begins to develop a schedule by first clearly defining all the activities it needs to perform.

Feeding Buffers

additional time added before tasks on the critical path that are preceded by non-critical-path tasks

Project Buffer

additional time added before the project's due date

Critical Path

for a project is the series of activities that determine the earliest time by which the project can be completed.

Milestone

is a significant point or event in a project. It usually includes many activities, and therefore a lot of work, to complete a milestone. They are useful tools for setting schedule goals and monitoring progress, and project sponsors and senior managers often focus on major milestones when reviewing projects.

Node

is simply the starting an ending point of an activity. The first node signifies the start of a project, and the last node represents the end of a project.

Slack or float

is the amount of time an activity may be delayed without delaying a succeeding activity or the project finish date

Misconception of critical path

is the longest path, in term of the discrete number of activities, through the network diagram.

Effort

is the number of workdays or work hours required to complete an activity. It is used to determine labor costs, like how many hours you will spend reading that book

The main goal of the cost budgeting process

is to produce a cost baseline and project budget.

Main Advantage of Fast Tracking

it can shorten the times it takes to finish a project

Main Disadvantage of Crashing

it often increases total project costs. If used too often, however, crashing can affect staff negatively by lowering morale of causing burnout

Multitasking

occurs when a resource works on more than one activity at a time

Program Evaluation and Review Technique (PERT)

Is a network analysis techniques used to estimate project duration when there is a high degree of uncertainty about the individual activity duration estimates. A tree-point estimate is required for performing PERT estimates.

Precedence Diagramming Method (PDM) aka Activity on Node (AON)

Is a network diagramming technique in which boxes represent activities. It is particular useful for visualizing different types of time dependencies as the AOA diagram can only show the most common type of dependency- finish to start

Buffer

additional time to complete an activity to an estimate to account for various and sometimes unknown factors.

Milestones Names

are generally written in past tense, such as "Contract awarded" ans are indicated on the Gantt Chart as diamond shapes with no cost, duration, or resources.

Mandatory Dependencies

are inherent in the nature of the work being performed on a project.

Project Managers must lead their treams

in creating realistic schedules and then monitoring and controlling them during project execution.

The longest path

in therms of total duration is what is driving the completion date for the project . Remember that you are not finished with the project until you have finished all activities.

Duration

includes the actual amount of time spent working on an activity plus elapsed time. Estimate of one day could be based on eight hours of work. It is used to determine the schedule, like how long it will take to before you finish reading a particular book.

Critical Path Method (CPM) AKA: Critical Path Analysis

is a network diagramming technique used to predict total project duration and show the amount of schedule flexibility on the network paths within the schedule model.

Network Digram

is a schematic display of the logical relationships among or sequencing of, project activities. Some refer network diagrams as PERT charts.

The activity list

is created by identifying the activities required to create each work package on the WBS, and any activity and attributes must be in alignment with the WBS and WBS dictionary.

Clearly defining the work and having a realistic schedule for all activities

is crucial to project success

Managing Dependencies

is one of the great features of today's PM applications

Management Reserve

money set aside to address unidentified risk

Ultimate goal

of schedule development is to create a realistic project schedule that provides a basis for monitoring project progress for the time dimension of the project

Gantt Chart

provide a standard format for displaying project schedule information by listing project activities and their corresponding start and finish dates in a calendar format. Very useful as they show when activities are started and completed relatively not only to dates but to each other.

Activity Attributes

provide schedule-related information about each activity, such as predecessors, successors, logical relationships, leads and lags, resource requirements, constraints, imposed dates, and assumptions related to the activity

A dependency or relationships

relates to the sequencing of project activities. For example: does a certain activity have to be finished before another one can start Determining these relationships or dependencies between activities has a significant impact on developing and project schedule

Main Advantage of Crashing

shortening the time it takes to finish a project

The critical path

shows the shortest time in which a project can be completed. Focuses on the time dimension of a project

Analogous Estimates

use the actual cost of a previous, similar project as the basis for estimating the cost of the current project

Parametric Modeling

uses project characteristics (parameters) in a mathematical model to estimate project costs

Schedule Development

uses the results of all the preceding project schedule management processes to determine the start and end dates of project activities and of the entire project.

Parkinso's Law

work expands to the time allowed

Crashing

A technique for making cost and schedule trade-offs to obtain the greatest amount of schedule compression for the least incremental cost