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Managing Effective ProjectsWhat is a Project?A Project is an interrelated set of activities with a definite starting and ending point, which results in a unique outcome for a specific allocation of resources

Goals On time completionBudget constraintsCustomer satisfaction

Project management: A systemized, phased approach to defining, organizing, planning, monitoring, and controlling projects

2Defining and Organizing ProjectsDefining the Scope and Objectives

Selecting the Project Manager and Team

Recognizing the Organizational Structure3Planning ProjectsDefining the Work Breakdown Structure (WBS)

Diagramming the Network

Developing the Schedule

Analyzing Cost-Time Trade-Offs

Assessing Risks4Work Breakdown StructureWork Breakdown Structure (WBS): A statement of all the work that has to be completedActivity: The smallest unit of work effort consuming both time and resources that can be planned and controlledPurchase and deliver equipmentConstruct hospitalDevelop information systemInstall medical equipmentTrain nurses and support staffOrganizing and Site PreparationPhysical Facilities and InfrastructureLevel 0Relocation of St. Johns HospitalSelect administration staffSite selection and surveySelect medical equipmentPrepare final construction plansBring utilities to siteInterview applicants fornursing and support staffLevel 1Level 25Diagramming the NetworkEstablishing Precedence Relationships

Estimating Activity Times

Using the Activity-On-Node (AON) Approach (c.f. AOA approach) self study 1

PERT/CPM (Program Evaluation and Review Technique/ Critical Path Method)

6Developing the ScheduleCritical Path is the sequence of activities between a start and finish that takes the longest time to complete self study 2

Project ScheduleEarliest Start (ES) and Earliest Finish (EF) Times

Latest Start (LS) and Latest Finish (LF) Times

Activity Slack is the maximum length of time that an activity can be delayed without delaying the entire project

Gantt Chart

7Gantt Chart

8Analyzing Cost-Time Trade-OffsProject Crashing is to shorten (or expedite) some activities within a project to reduce overall project completion time

Project CostsDirect Costs labor, raw materialsIndirect CostsPenalty Costs if project is not able to be completed in time

9Analyzing Cost-Time Trade-OffsCost-Time Relationships

Normal time (NT) is the time necessary to complete an activity under normal conditionsNormal cost (NC) is the activity cost associated with the normal timeCrash time (CT) is the shortest possible time to complete an activityCrash cost (CC) is the activity cost associated with the crash time

10Assumptions:1. Cost-time relationship is inverse2. Cost-time relationships is linear

Crash cost/week = $7000-$4000 / 5 weeks = $600 / week10Analyzing Cost-Time Trade-OffsDetermining the project schedule that minimize total project costs self study 3

Step 1. Determine the projects critical path(s)Step 2. Find the activity or activities on the critical path(s) with the lowest cost of crashing per weekStep 3. Reduce the time for this activity untilIt cannot be further reduced orAnother path becomes critical, orThe increase in direct costs exceeds the savings that result from shortening the project (which lowers indirect costs)Step 4. Repeat this procedure until the increase in direct costs is larger than the savings generated by shortening the project11Assessing RisksRisk-Management PlansStrategic FitService/Product AttributesProject Team CapabilityOperations

Simulation

Statistical AnalysisOptimistic time (a)Most likely time (m)Pessimistic time (b)12Statistical Analysis13ambMeanTimeBeta distributionambMeanTime33Area under curve between a and b is 99.74%Normal distribution

Statistical Analysis14

Analyzing Probabilities (independent activities, CLT) self study 4

Near-Critical Paths (or competing paths)Monitoring and Controlling ProjectsMonitoring Project StatusOpen Issues and RisksSchedule Status

Monitoring Project Resources

Controlling Projects15