EPT 432 Project Management
Laboratory Module
LAB 8
PROJECT MANAGEMENT
1.0
OBJECTIVE
1.
2.
3.
4.
5.
2.0
Will able to understand project management
Draw complete network diagram (ES, EF, LS and LF)
Determine the critical path
Calculate the variance of activity times
Able to calculate the probability, understand the graph and read the value from
Normal Distribution Table
INTRODUCTION
Projects that take months or years to complete are usually developed outside the normal
production system. The management of projects involves three phases:
1. Planning
- includes goal setting, defining the project and team organization
2. Scheduling
- relates people, money, and supplies to specific activities and relates activities to
each other
3. Controlling
- firm monitor the resources, costs, quality and budgets. It also revises or changes
plans and shifts resources o meet time and cost demands.
Overview of project management:1. What is project management?
A team-based approach for managing projects
2. How it is different from general operations management?
a. Limited time frame
b. Narrow focus, specific objectives
c. Less bureaucratic
3. Why it is used?
a. Special needs that don’t lend themselves to functional management
b. Pressures for new or improved products or services, cost reduction
4. What are the key metrics?
a. Time
b. Cost
c. Performance objectives
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EPT 432 Project Management
Laboratory Module
5. What are the key success factors?
a. Top down commitment
b. A respected and capable project manager
c. Enough time to plan
d. Careful tracking and control
e. Good communications
6. What are the major administrative issues?
a. Executive responsibilities:
i)
Project selection
ii)
Selection of project manager
iii)
Organizational structure (to whom will the project manger
report?)
b. Organizational alternatives:
i)
Manage with functional unit
ii)
Assign a coordinator
iii)
Use a matrix organization with a project leader
7. What are the main tools?
a. Work breakdown structure.
- An initial planning tool that is needed to develop a list of activities,
activity sequences and a realistic budget.
b. Network diagram
- A “big picture” visual aid that is used to estimate project duration, identify
activities that are critical for timely project completion, identify area when
slack time exits, and develop activity schedules.
c. Gantt charts
- A visual aid used to plan and monitor individual activities
d. Risk management
- Analyses of potential failures of problems, assessment of their likelihood
and consequences and contingency plans.
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EPT 432 Project Management
Laboratory Module
Network Diagram and Approaches
Critical path is the longest time path through the network. It can be defined as:i) Earliest Start (ES) – earliest time at which activity can start, assuming all
predecessors have been completed
ii) Earliest Finish (EF) – earliest time at which an activity can be finished
iii) Latest Start (LS) – latest time at which an activity can start so as to not delay
the completion time of the entire project
iv) Latest Finish (LF) - latest time by which an activity has to finish so as to not
delaying the completion time of the entire project
Figure 1: Notation used in nodes for Forward and Backward Pass
After we have computed the earliest and latest time for all the activities, it is a simple
matter to find the amount of slack time or free time that each activity has. Slack is the
length of time an activity can be delayed without delaying the entire project.
SLACK = LS – ES or
SLACK = LF – EF
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EPT 432 Project Management
Laboratory Module
To find the expected activity time, t , :-
t = ( a + 4m + b ) / 6
where:
a) a (optimistic time) – time an activity will take if everything goes to planned
b) b (pessimistic time) – time an activity will take assuming very unfavorable
conditions.
c) m (most likely time) – most realistic estimate of the time required to complete
an activity
Figure 2: Beta Probability Distribution with Three Time Estimates
To compute the dispersion or variance of activity completion time :-
Variance = [ ( b – a ) / 6 ]²
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EPT 432 Project Management
Laboratory Module
Probability of project completion:
σ²p
= Project Variance = ∑ (variance of activities on
critical path)
*Z = T – TE
√ σ²
\Example
Milwaukee Paper Manufacturing Inc., located near downtown Milwaukee, has long been
trying to avoid the expense of installing air pollution control equipment in its facility. The
Environmental Protection Agency (EPA) has recently given the manufacturer 16 weeks
to install a complex air filter system. Milwaukee Paper has been warned that it may be
forced to close the facility unless the device is installed in the allotted period. Joni
Steinberg, the plant manger, wants to make sure that installation of the filtering system
progress smoothly and on time.
Given the following information, develop a table showing activity precedence
relationships.
Immediate
Predecessors
A
Build internal components
B
Modify roof and floor
C
Construct collection slack
A
D
Pour concrete and install frame
A,B
E
Build high temperature burner
C
F
Install pollution control system
C
G
Install air pollution device
D,E
H
Inspect and test
F,G
Total Time (weeks)
Table 1: Milwaukee Paper Manufacturing’s Activities and Predecessors
Activity
Description
5
Time
(weeks)
2
3
2
4
4
3
5
2
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EPT 432 Project Management
Laboratory Module
Figure 3: Finish network diagram (ES, EF, LS and LS) and critical path (shown in blue lines)
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EPT 432 Project Management
Laboratory Module
ACTIVITY
ES
EF
LS
LF
A
B
C
D
E
F
G
H
0
0
2
3
4
4
8
13
2
3
4
7
8
7
13
15
0
1
2
4
4
10
8
13
2
4
4
8
8
13
13
15
SLACK CRITICAL
(LS-ES)
PATH
0
1
0
1
0
6
0
0
Yes
No
Yes
No
Yes
No
Yes
Yes
Activity
a
m
b
Expected
Time
Variance
A
B
C
D
E
F
G
H
1
2
1
2
1
1
3
1
2
3
2
4
4
2
4
2
3
4
3
6
7
9
11
3
2
3
2
4
4
3
5
2
0.11
0.11
0.11
0.44
1.00
1.78
1.78
0.11
Path
A-C-F-H
A-C-E-G-H
A-D-G-H
B-D-G-H
Total Expected
Time
Total Variance
2+2+3+2 = 9
2+2+4+5+2 =15
2+4+5+2 = 13
3+4+5+2 = 14
0.11+0.11+1.78+0.11 =2.11
0.11+0.11+1.00+1.78+0.11= 3.11
0.11+0.44+1.78+0.11 =2.44
0.11+0.44+1.78+0.11 = 2.33
σ
* p = √ 3.11 = 1.76 weeks
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EPT 432 Project Management
Laboratory Module
Figure 4: Probability distribution for Project Completion Times at Milwaukee Paper
Figure 4 can be used to represent project completion dates. This normal curve implies
that there is 50% chance the manufacturer’s project completion time will be less than 15
weeks and a 50% chance that it will exceeds 15 weeks.
The standard normal equation can be applied as follows:
Z = (Due date – Expected date of completion) /
= (16 – 15) / 1.76
= 0.57
σp
Referring to the Normal Table (refer to appendix), we find that a Z value of 0.57 to the
right of the mean indicates a probability of 0.7157. Thus, there s a 71.57% chance that the
pollution control equipment can be pt in place in 16 weeks or less.
Figure 5: Probability that Milwaukee Paper will meet the 16 week deadline. The shaded
area to the left of the 16th weeks (71.57%) represents the probability.
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EPT 432 Project Management
Laboratory Module
CASE STUDY
PROJECT MANAGEMENT AT ARNOLD PALMER HOSPITAL
The equivalent of a new kindergarten class is born every day at Orlando’s Arnold Palmer
Hospital. With more than 12,300 births in 2005 in a hospital that was designed in1989 for
a capacity of 6,500 births a year, the newborn intensive care unit was stretched to the
limit. Moreover, with continuing strong population growth in Central Florida, the hospital
was often full. It was clear that the new facilities were needed. After much analysis,
forecasting and discussion, the management team decided to build a new 273-bed
building across the street from the existing hospital. But the facility had to be built in
accordance with the hospital’s Guiding Principles and its uniqueness as a health center
dedicated to the specialized needs of women and infants. Those Guiding Principles are:
Family centered focus, a healing environment where privacy and dignity are respected,
sanctuary of caring that includes warm, serene surroundings with natural lighting,
sincere and dedicated staff providing the highest quality are, and patient-centered flow
and function.
The Vice President of Business Development, Karl Hodges, wanted a hospital that was
designed form the inside out by the people who understood the Guiding Principles, who
knew most about the current system, and who were going to use the new system, namely,
the doctors and nurses. Hodges and his staff spent 13 months discussing expansion needs
with this group, as well as with patients and the community before developing a proposal
for the new facility on December 17, 2001. An administrative team created 35 users
groups, which held over 1,000 planning meetings 9lasting from 45 minutes to a whole
day). They even created a “Supreme Court” to deal with conflicting views on the
multifaceted issues facing the new hospital.
Funding and regulatory issues added substantial complexity to this major expansion, and
Hodges was very concerned that the project stays on time and within budget. Tom Hyatt,
director of facility development, was given the task of onsite manger of the $100 million
project, in addition to overseeing ongoing renovations, expansions and other projects.
The activities in the multi-year project for the new building at Arnold Palmer are shown
below.
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EPT 432 Project Management
Laboratory Module
SCHEDULED PRECEDENCE
TIMES
ACTIVITY
NO
ACTIVITY
1
2
3
4
5
6
7
Proposal and review
Establish master schedule
Architect selection process
Survey whole campus and its needs
Conceptual architect’s plan
Cost estimating
Deliver plans to board for consideration
/decision
Surveys / regulatory review
Contraction manager selection
State review of need for more hospital beds
(“Certificate of Need”)
Design drawings
Construction documents
Site Preparation / demolish existing building
Construction start / building pad
Relocate utilities
Deep foundations
Building structure in place
Exterior skin /roofing
Interior buildout
Building inspections
Occupancy
8
9
10
11
12
13
14
15
16
17
18
19
20
21
1 month
2 weeks
5 weeks
1 month
6 weeks
2 months
1 month
1
1
1
3
2,4,5
6
6 weeks
9 weeks
3.5 months
6
6
7,8
4 months
5 months
9 weeks
2 months
6 weeks
2 months
9 months
4 months
12 months
5 weeks
1 month
10
9 , 11
11
12 , 13
12
14
16
17
17
15 , 19
20
*For simplification, assume each week = .25 months (ie, 2 weeks = .5 months, 6 weeks =
1.5 months, etc.)
Discussion Questions
1. Develop the network for planning and construction of the new hospital at Arnold
Palmer
2. What is the critical path and how long is the project expected to take?
3. Why is the construction of this11-storey building any more complex than
construction of an equivalent office building?
4. What percent of the whole project durations was spent in planning that occurred
prior to the proposal and reviews? Prior to the actual building construction? Why?
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EPT 432 Project Management
Laboratory Module
LAB 8
PROJECT MANAGEMENT
CASE STUDY
SCHOOL / PROGRAMME OF
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DATE OF LABORATORY
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