Exam 2 mgt 325

Sensitivity

the likelihood the original critical path(s) will change once the project is initiated

Fast tracking

- Activities normally performed in sequence are performed in parallel if possible. - Only works if activities can be overlapped to shorten the duration

Resources Not Constrained

- Adding resources - Outsourcing project work - Scheduling overtime

Crashing

- Analyze cost and schedule tradeoffs to obtain the greatest amount of compression for the least incremental cost - Only works for activities where additional resources will shorten the duration

Creating a time phased budget

- Assign each work package to one responsible person or department and deliverable - Compare planned schedule and costs using an integrative system called earned value

Materials

- Chemicals, concrete etc.

Resources Are Constrained

- Fast-tracking - Critical-chain - Reducing project scope - Compromise quality

Develop Schedule

- Project network times are not a schedule until resources have been assigned.

Types of Project Constraints

- Technical or Logic Constraints - Physical Constraints - Resource Constraints

Equipment

- Type, size, quantity - Usually assigned to resource pools

Terminology

- activity - Merge activity - Parallel (concurrent) Activities - Path - critical path - event - Burst activity

Two approaches

-Activity-on-Node (AON) -Activity-on-Arrow (AOA)

People

-Classified by the skills people bring to projects

The backward pass is similar to the forward pass, you need to remember three things:

1. You subtract activity times along each path starting with the project end activity (LF - DUR = LS) 2. You carry the LS to the next preceding activity to establish its LF, unless 3. The next preceding activity is a burst activity, in this case you select the smallest LS of all its immediate successor activities to establish its LF.

Smoothing Resource Demand

-If resources are adequate over the life of the project: • Use positive slack (delaying noncritical activities) to manage resource Utilization over the duration of the project. -Benefits: • Leaves time for consideration of reasonable alternatives: cost-time tradeoffs, changes in priorities • Provides information for time-phased work package budgets to assess: impact of unforeseen events, amount of flexibility in available resources

Time-constrained project

-Must be completed by an imposed date. -Require use of leveling techniques that focus on balancing or smoothing resource demands.

Develop schedule

-Project network times are not a schedule until resources have been assigned. •The implicit assumption is that resources will be available in the required amounts when needed. -Cost estimates are not a budget until they have been time-phased. • Without a time-phased budget, good project schedule and cost control are impossible

Resource Constraints

-The absence, shortage, or unique interrelationship and interaction characteristics of resources that require a particular sequencing of project activities

Identify 4 indirect costs you might find on a moderately complex project. Why are these costs classified as indirect?

1. Administration 2. Supervision 3. Consultants 4. Interest These are indirect because they aren't tied to a specific activity or work package.

Backward Pass - Latest Times

1. How late can the activity start? (Late start - LS) 2. How late can the activity finish? (Late finish - LF) 3. Which activities represent the critical path (CP)? This is the longest path in the network which, when delayed, will delay the project. 4. How long can the activity be delayed? (Slack or Float - SL)

Forward Pass - Earliest Times

1. How soon can the activity start? (Early start - ES) 2. How soon can the activity finish? (Early finish - EF). 3. How soon can the project be finished? (Expected time - TE)

Activities are scheduled using heuristics (rules-of-thumb) that focus on:

1. Minimum Slack 2. Smallest (least) duration 3. Lowest activity identification number

Basic rules to follow in developing project networks

1. Networks flow from left to right. 2. An activity cannot begin until all preceding connected activities have been completed. 3. Arrows on networks indicate precedence and flow. Arrows can cross over each other. 4. Each activity should have a unique identification number. 5. An activity identification number must be larger than that of any activities that precede it. 6. Looping is not allowed (in other words, recycling through a set of activities cannot take place). 7. Conditional statements are not allowed (that is, this type of statement should not appear: If successful, do something; if not, do nothing). 8. 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.

Types of resource constraints

1. People 2. Materials 3. Equipment

3 Goals of Smoothing

1. The peak of demand for the resource was reduced. 2. The number of resources over the life of the project have been reduced. 3. The fluctuations in resource demand were minimized: This improves the utilization of resources.

What are five common reasons for crashing a project?

1. Time to market pressures. 2. Unforeseen delays. 3. Incentives for early completion. 4. Imposed deadlines. 5. Pressures to move resources elsewhere.

There are three basic relationships that must be established for activities included in a project network.

1. Which activities must be completed immediately before this activity? These activities are called predecessor activities. 2. Which activities must immediately follow this activity? These activities are called successor activities. 3. Which activities can occur while this activity is taking place? This is known as a concurrent or parallel relationship.

The forward pass requires that you remember just three things when computing early activity times:

1. You add activity times along each path in the network (ES + DUR = EF) 2. You carry the early finish (EF) to the next activity where it becomes its early start (ES), unless 3. The next succeeding activity is a merge activity. In this case you select the largest early finish number (EF) of all its immediate predecessor activities.

The Project Network

A flow chart that graphically depicts the sequence, interdependencies, and start and finish times of the project job plan of activities that is the critical path through the network.

Path

A sequence connected, dependent activities.

Physical Constraints

Activities that cannot occur in parallel or are affected by contractual or environmental conditions.

Overview of the resource scheduling problem

After staff and resources were assigned to a project: - Will the assigned labor and equipment be adequate and available to deal with the project? - Will outside contractors have to be used? - Do unforeseen resource dependencies exist? Is there a new critical path? - How much flexibility do we have in using resources? - Is the original deadline realistic?

Start to start relationship

An alternative to segmenting the activities as we did earlier is to use a start to start relationship.

How does resource scheduling reduce flexibility in managing projects?

Because when resources are considered, computer routines use slack to get an "efficient" schedule. When slack is used up. flexibility is lost and the risk of delaying the project increases. If the resource conflict occurs on the critical path, the project is delayed.

Technical or Logic Constraints

Constraints related to the networked sequence in which project activities must occur

Develop Budget

Cost estimates are not a budget until resources have been assigned - Without a time-phased budget, good project schedule and cost control are impossible

Time Is Money: Cost-Time Tradeoffs

Cost-time solutions focus on reducing (crashing) activities on the critical path to shorten overall duration of the project. - Reducing the time of a critical activity usually incurs additional direct costs.

The Consequences of Failing to Schedule Limited Resources are:

Costly and project delays usually manifest themselves midway in the project hen quick corrective action is difficult; an additional consequence of failing to schedule resources is ignoring the peaks and valleys of resource usage over the duration of the project; because project resources are usually over committed and because resources seldom line up by availability and need, procedures are needed to deal with these problems

Project Indirect Costs

Costs that cannot be associated with any particular work package or project activity. • Supervision, administration, consultants, and interest - Costs that increase with time. • Reducing project time reduces indirect costs.

The resource dependency takes priority over the technical dependency, but:

Does not violate the technological dependency

Free Slack

FS is unique. It is the amount of time an activity can be delayed without delaying any immediately following activity. Or, free slack is the amount of time an activity can exceed its early finish date without affecting the early start date any successor. Free slack can never be negative. Only activities that occur ate the end of a chain of activities, where you have a merge activity, can have free slack.

Activity

For project managers, an activity is an element of the project that requires time. It may or may not require resources. Typically an activity consumes time - Either while people work or while people wait. Activities usually represent one or more tasks from a work package. Description of activities should use a verb/noun - f.ex. develop product specs.

What is the difference between free slack and total slack?

Free slack usually occurs at the end of an activity chain—before a merge activity. It is the amount of time the activity can be delayed without affecting the early start of the activity immediately following it. Since free slack can be delayed without delaying following activities, it gives some resource flexibility to the project manager. Total slack is the amount of time an activity can be delayed before it becomes critical. Use of total slack prevents its use on a following activity.

Resource smoothing

If resources are adequate but the demand varies widely over the life of the project, it may be desirable to even out resource demand by delaying noncritical activities (using slack) to lower peak demand, thus, increase resource utilization.

Resource-Constrained Scheduling

If 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.

Total slack (or Float)

Is simply the the difference between the LS and ES (LS - ES = SL) or between LF and EF (LF - EF = SL).

Why is it critical to develop a time-phased baseline?

It is critical to develop a time-phased budget because they are necessary for good project schedule and cost control. Other systems don't measure the amount of work accomplished for the money spent. Time-phasing cost to match project schedule is a prerequisite to having reliable information for control purposes.

Resource-Constrained Project

Level of resources are limited • Resources are fixed, time is flexible: inadequate resources will delay the project.

Time-Constrained Project

Must be completed by an imposed date. Time is fixed, resources are flexible: additional resources are required to ensure project meets schedule.

Project direct cost

Normal costs that can be assigned directly to a specific work package or project activity. - Crashing activities increases direct costs.

Activities are scheduled period by period by asking two questions:

Q1. Q2.

Classification of a Scheduling Problem

Resource-Constrained Project - Level of resources available cannot be exceeded. • Resources are fixed, time is flexible: inadequate resources will delay the project.

Resource-Constrained Projects

Resource-Constrained Scheduling • If resources are not adequate to meet peak demands: • Late start (LS) of some activities must be delayed • Duration of the project may be increased

It is possible to shorten the critical path and save money. Explain how

Shortening the critical path can save money in instances where indirect costs are a significant percentage of total project costs. A shorter project means these costs are incurred for less time.

Why is slack important to the project manager?

Slack is important to the project manager because it represents the degree of flexibility the project manager will have in rearranging work and resources. A project network with several near critical paths and hence, little slack, gives the project manager little flexibility in changing resources or rearranging work.

Splitting

Tasks is a scheduling technique used to get a better project schedule and/or to increase resource utilization

Leveling

Techniques that delay noncritical activities by using positive slack to reduce peak demand and fill the valleys for the resources

Total slack

Tells us the amount of time an activity can be delayed and not delay the project. Stated differently, total slack is the amount of time an activity can exceed its early finish date without affecting the project end date or an imposed completion date.

Why bother creating a WBS? Why not go straight to a project network and forget the WBS?

The WBS is designed to provide different information for decision making. For example, this database provides information for the following types of decisions: a. Link deliverables, organization units, and customer b. Provide for control c. Isolate problems to sourced. d. Track schedule and cost variance. Network doesn't. e. Assign responsibility and budgets f. Focus attention on deliverables g. Provide information for different levels in the organization.

Resource Constraints

The absence, shortage, or unique interrelationship and interaction characteristics of resources that require a particular sequencing of project activities

After slack for each activity is computed

The critical path(s) is (are) easily identified. - The critical path is the network path that has the least slack in common.

Finish to start relationship

The finish to start relationship represents the typical, generic network style used in the early part of the chapter. However, these are situations in which the next activity in a sequence must be delayed even when the preceding activity is complete.

How are WBS and project networks linked?

The network uses the time estimates found in the work packages of the WBS to develop the network. Remember, the time estimates, budgets, and resources required for a work package in the WBS are set in time frames, but without dates. The dates are computed after the network is developed An activity that spans over a segment of a project. Duration of hammock activities is determined after the network plan is drawn. Hammock activities are used to aggregate sections of the project to facilitate getting the right amount of detail for specific sections of a project.

Develop schedule definition

The process of analyzing activity sequences, durations, resource requirements, and schedule constraints to create the project schedule. Iterative process: - revising and maintaining a realistic schedule continues throughout the project as work progresses

Lags

The use of lags has been developed to offer greater flexibility in network construction. A lag is the minimum amount of time a dependent activity must be delayed to begin or end. The use of lags in project networks occurs for two primary reasons: 1. When activities of long duration delay the start or finish of successor activities, the network designer normally breaks the activity into smaller activities to avoid the long delay of the successor activity. Use of lags can avoid such delays and reduce network detail. 2. Lags can be used to constrain the start and finish of an activity.

parallel activity

These are activities that can take place at the same time, if the manager wishes. However, the manager may choose to have parallel activities not occur simultaneously.

Burst Activity

This activity has more than one activity immediately following it (more than one dependency arrow flowing from it).

Merge activity

This is an activity that has more than one activity immediately preceding it (More than one dependency arrow flowing to it).

Event

This term is used to represent a point in time when an activity is started or completed. It does not consume time.

Why are lags used in developing project networks?

Two major reasons: a. To closer represent real situations found in projects b. To allow work to be accomplished in parallel when the finish-to-start relationship is too restrictive.

Options for Accelerating Project Completion

When Time Is The Issue - Resources are not constrained - Resources are constrained When Costs, Not Time Are The Issue - Reduce project scope - Have owner take on more responsibility - Outsourcing project activities or even the entire project - Brainstorming cost savings options

Critical path

When this term is used, it means the path with the longest duration through network. If an activity on the path is delayed, the project is delayed.

Activity-on-Arrow (AOA)

a network diagram in which arrows designate activities

Activity-on-Node (AON)

a network diagram in which nodes designate activities

How does the WBS differ from the project network?

a. The WBS is hierarchical while the project network is sequential. b. The network provides a project schedule by identifying sequential dependencies and timing of project activities. The network sets all project work, resource needs, and budgets into a sequential time frame; the WBS does not provide this information. c. The WBS is used to identify each project deliverable and the organization unit responsible for its accomplishment within budget and within a time duration. d. The WBS provides a framework for tracking costs to deliverables and organization units responsible.

Cost Aggregation

defined as summing the cost for the individual work package to control the financial account up to the project level

Constructing a Project Cost-Duration Graph

• Find total direct costs for selected project durations. • Find total indirect costs for selected project durations. • Sum direct and indirect costs for these selected project durations. • Compare additional cost alternatives for benefits.

Critical Chain Method

• Modify project schedule to account for limited resources • Creates resource-limited schedule • Identifies the resource-constrained critical path - critical chain •Adds duration buffers -Project buffer - placed at the end -Feeding buffers placed where non-critical tasks feed into the critical chain. • Instead of managing total float, manages remaining buffer durations.

Resource Allocation Methods cont.

• Resource Demand Leveling Techniques for Time-Constrained Projects - Disadvantages • Loss of flexibility that occurs from reducing slack. • Increases in the criticality of all activities.

What if Cost, Not Time Is the Issue?

•Commonly Used Options for Cutting Costs - Reduce project scope - Have owner take on more responsibility - Outsourcing project activities or even the entire project - Brainstorming cost savings options

Imposed project duration dates:

•Time-to-market pressures •Unforeseen delays •Incentive contracts (bonuses for early completion) •Imposed deadlines and contract commitments •Overhead and public goodwill costs •Pressure to move resources to other projects