Operations management, 9e by krajewski itzman malhotra chapter 02

2

Project Management

PowerPoint Slides
by Jeff Heyl

For Operations Management, 9e by
Krajewski/Ritzman/Malhotra
© 2010 Pearson Education
2–1


Projects
Projects are an interrelated set of activities
with a definite starting and ending point,
which results in a unique outcome from a
specific allocation of resources
Projects are common in everyday life
The three main goals are to:
 Complete
 Not

the project on time

exceed the budget

 Meet

the specifications to the satisfactions of
the customer

2–2


Projects
Project management is a systemized,
phased approach to defining, organizing,
planning, monitoring, and controlling
projects
Projects often require resources from
many different parts of the organization
Each project is unique
Projects are temporary
A collection of projects is called a program

2–3


Defining and Organizing Projects
Define the scope, time frame, and resources
of the project
Select the project manager and team
Good project managers must be
 Facilitators
 Communicators
 Decision

makers

Project team members must have
 Technical

competence
 Sensitivity
 Dedication
2–4


Organizational Structure
Different structures have different
implications for project management
Common structures are
 Functional
 Pure

project

 Matrix

2–5


Planning Projects
There are five steps to planning projects
1.

Defining the work breakdown structure

2.

Diagramming the network

3.

Developing the schedule

4.

Analyzing the cost-time trade-offs

5.

Assessing risks

2–6


Work Breakdown Structure
A statement of all the tasks that must be
completed as part of the project
An activity is the smallest unit of work
effort consuming both time and resources
that the project manager can schedule and
control
Each activity must have an owner who is
responsible for doing the work

2–7


Work Breakdown Structure

Relocation of St. John’s Hospital

Organizing and Site Preparation

Level 0

Physical Facilities and Infrastructure

Select administration staff

Purchase and deliver equipment

Site selection and survey

Construct hospital

Select medical equipment

Develop information system

Prepare final construction plans

Install medical equipment

Bring utilities to site

Train nurses and support staff

Interview applicants for
nursing and support staff

Level 1

Level 2

Figure 2.1
2–8


Diagramming the Network
Network diagrams use nodes and arcs to
depict the relationships between activities
Benefits of using networks include
1.

Networks force project teams to identify and
organize data to identify interrelationships
between activities

2.

Networks enable the estimation of completion
time

3.

Crucial activities are highlighted

4.

Cost and time trade-offs can be analyzed

2–9


Diagramming the Network
Precedent relationships determine the
sequence for undertaking activities
Activity times must be estimated using
historical information, statistical analysis,
learning curves, or informed estimates
In the activity-on-node approach, nodes
represent activities and arcs represent the
relationships between activities

2 – 10


Diagramming the Network
AON

S

Activity Relationships

T

U

S

U
T

S precedes T, which
precedes U.

S and T must be
completed before U
can be started.

Figure 2.2
2 – 11


Diagramming the Network
AON

Activity Relationships
T

T and U cannot
begin until S has
been completed.

S
U

S

U

T

V

U and V can’t begin
until both S and T
have been completed.

Figure 2.2
2 – 12


Diagramming the Network
AON

Activity Relationships

S

U

T

V

S

T
U

V

U cannot begin until
both S and T have been
completed; V cannot
begin until T has been
completed.
T and U cannot begin
until S has been
completed and V cannot
begin until both T and U
have been completed.

Figure 2.2
2 – 13


Developing the Schedule
Schedules can help managers achieve the
objectives of the project
Managers can
1.

Estimate the completion time by finding the
critical path

2.

Identify start and finish times for each activity

3.

Calculate the amount of slack time for each
activity

2 – 14


Critical Path
The sequence of activities between a
project’s start and finish is a path
The critical path is the path that takes the
longest time to complete

2 – 15


St. John’s Hospital Project
Activity

Immediate
Predecessors

Responsibility
Kramer

ST. JOHN’S HOSPITAL PROJECT

0

START
ORGANIZING and SITE PREPARATION

Activity Times
(wks)

Stewart
START

12

START

9

Taylor

A

10

Adams

Select medical equipment

B

10

Taylor

D.

Prepare final construction plans

B

24

Burton

E.

Bring utilities to site

A

10

Johnson

F.

Interview applicants for nursing and
support staff

PHYSICAL FACILITIES and INFRASTRUCTURE C

35

Walker

G. Purchase and deliver equipment

D

40

Sampson

H.

Construct hospital

A

15

Casey

I.

Develop information system

J.

Install medical equipment

K.

Train nurses and support staff

A.

Select administrative staff

B.

Select site and survey

C.

FINISH 2.1
Example

Johnson

E, G, H

4

Murphy

F, I, J

6

Pike

K

0

Ashton
2 – 16


St. John’s Hospital Project
Activity

Immediate
Predecessors

ST. JOHN’S HOSPITAL PROJECT
START

Completion Time

Activity
IP
Time
ORGANIZING
and
SITE PREPARATION
A A. Select
STARTadministrative
12
staff
A

B
START
9
12
site and
C B. Select
A
10 survey
D C. Select
B
10 equipment
medical
E
B
24
D.
Prepare
final
F
A
10construction plans
Start
G E. Bring
C
35to site
utilities
H
D
40
F. Interview applicants for nursing and

I
A
support
staff15
J
E, G, H
4
B
PHYSICAL
FACILITIES
and
INFRASTRUCTURE
K
F, I, J
6
9
G. Purchase and deliver equipment
H.

Construct hospital

I.
J.

Develop information system
Figure 2.3
Install medical
equipment

K.

Train nurses and support staff

FINISH 2.1
Example

Activity Times
(wks)

Responsibility

I
15

F
10

K
6

C
10

G
35

D
10

H

40

Finish

J
4

E
24

2 – 17


Estimated Time (weeks)
St.
John’s
Hospital
Project
A–I–K
33
Path

A–F–K
Activity

28

A–C–G–J–K

67

B–D–H–J–K

Completion
69 Time

Immediate
Predecessors

ST. JOHN’S HOSPITAL PROJECT
START

Activity Times
(wks)

Responsibility

I
15

B–E–J–K
43
ORGANIZING and SITE PREPARATION
A.

Select administrative staff

B.

Select site and survey

C.

Select medical equipment

D.

Prepare final construction plans
Start
Bring utilities to site

E.

A
12

Interview applicants for nursing and
support staff
B
PHYSICAL FACILITIES and INFRASTRUCTURE
9
G. Purchase and deliver equipment

F
10

K
6

C

10

G
35

D
10

H
40

Finish

F.

H.

Construct hospital

I.
J.

Develop information system
Figure 2.3
Install medical
equipment

K.

Train nurses and support staff

FINISH 2.1
Example

J
4

E
24

2 – 18


Estimated Time (weeks)
St.
John’s
Hospital
Project
A–I–K
33
Path

A–F–K
Activity

28

A–C–G–J–K

67

B–D–H–J–K

Completion
69 Time

Immediate
Predecessors

ST. JOHN’S HOSPITAL PROJECT
START

Activity Times
(wks)

Responsibility

I
15

B–E–J–K
43
ORGANIZING and SITE PREPARATION
A.

Select administrative staff

B.

Select site and survey

C.

Select medical equipment

D.

Prepare final construction plans
Start
Bring utilities to site

E.

A
12

Interview applicants for nursing and
support staff
B
PHYSICAL FACILITIES and INFRASTRUCTURE
9
G. Purchase and deliver equipment

F
10

K
6

C

10

G
35

D
10

H
40

Finish

F.

H.

Construct hospital

I.
J.

Develop information system
Figure 2.3
Install medical
equipment

K.

Train nurses and support staff

FINISH 2.1
Example

J
4

E
24

2 – 19


Application 2.1
The following information is known about a project

Activity

Activity Time (days)

Immediate
Predecessor(s)

A

7

—

B

2

A

C

4

A

D

4

B, C

E

4

D

F

3

E

G

5

E

Draw the network diagram for this project

2 – 20


Application 2.1
Activity

Activity Time (days)

Immediate
Predecessor(s)

A

7

—

B

2

A

C

4

A

D

4

B, C

E

4

D

F

3

E

G

5

E

B
2
Start

A
7

F
3
D
4

C
4

E
4

Finish
G
5

2 – 21


Project Schedule
The project schedule specifies start and
finish times for each activity
Managers can use the earliest start and
finish times, the latest start and finish

times, or any time in between these
extremes

2 – 22


Project Schedule
 The earliest start time (ES) for an activity is the
latest earliest finish time of any preceding
activities
 The earliest finish time (EF) is the earliest start
time plus its estimated duration
EF = ES + t
 The latest finish time (LF) for an activity is the
latest start time of any preceding activities
 The latest start time (LS) is the latest finish time
minus its estimated duration
LS = LF – t
2 – 23


Early Start and Early Finish Times
EXAMPLE 2.2
Calculate the ES, EF, LS, and LF times for each activity in the
hospital project. Which activity should Kramer start
immediately? Figure 2.3 contains the activity times.
SOLUTION
To compute the early start and early finish times, we begin at
the start node at time zero. Because activities A and B have no
predecessors, the earliest start times for these activities are

also zero. The earliest finish times for these activities are
EFA = 0 + 12 = 12 and EFB = 0 + 9 = 9

2 – 24


Early Start and Early Finish Times
Because the earliest start time for activities I, F, and C is the
earliest finish time of activity A,
ESI = 12, ESF = 12, and ESC = 12
Similarly,
ESD = 9 and ESE = 9
After placing these ES values on the network diagram, we
determine the EF times for activities I, F, C, D, and E:
EFI = 12 + 15 = 27, EFF = 12 + 10 = 22, EFC = 12 + 10 = 22,
EFD = 9 + 10 = 19, and EFE = 9 + 24 = 33

2 – 25