Introduction to Operations Management - Wikispacesyustom.wikispaces.com/file/view/OM03_ProjectManagementEN.pdf/... · Introduction to Operations Management Ch. 17. Project Management

Introduction to Operations Management

Ch. 17. Project Management

Hansoo Kim (金翰秀)

Dept. of Management Information Systems, YUST

What you should have done!

Review Ch. 1 and 2

HW#1 (3/22 수업시간 전까지!!!)

Read Ch. 17

Important things in Ch.1 and 2

Organizational Functions

What is OM? Why OM?

Productivity

Calculating Productivity

Productivity Variables

History of OM

What, When, by Who

Changing Challenges!

Mission/Strategy

Better/Cheaper/Faster

Strategy and Issues During a Product’s Life Cycle

OM Overview

Class Overview(Ch. 0)

ProjectManagement

(Ch. 17)

StrategicCapacity Planning

(Ch. 5, 5S)

Operations, Productivity,and Strategy

(Ch. 1, 2)

Mgmt of Quality/Six Sigma Quality

(Ch. 9, 10)

Supply ChainManagement(Ch 11)

Location Planningand Analysis(Ch. 8)

Demand MgmtForecasting

(Ch 3)

InventoryManagement

(Ch. 12)

AggregatedPlanning

(Ch. 13)

Queueing/Simulation(Ch. 18)

MRP & ERP(Ch 14)

JIT & Lean Mfg System

(Ch. 15)

Term Project

Process Selection/Facility

Layout; LP(Ch. 6, 6S)

X X

To be OM Expert !!!

Understanding

Problem

Developing

Proper Model

Finding Solution

Technique

Communicable

with other OM People

Domain Expert

(Studying general

Problems and Working

Experience)

Operations Research

(경영과학)

Mathematical Programming,

and Computational

Methodology

Existing Models:

LP Model,

Queueing Model,

Simulation Model,

PERT/CPM Model

Develop New Models

OM EXPERT!!

Learning Objectives

Discuss the behavioral aspects of projects in terms of project personnel and the project manager.

Discuss the nature and importance of a work breakdown structure in project management.

Give a general description of PERT/CPM techniques.

Construct simple network diagrams.

Learning Objectives

List the kinds of information that a PERT or CPM analysis can provide.

Analyze networks with deterministic times.

Analyze networks with probabilistic times.

Describe activity “crashing” and solve typical problems.

Terms(용어) Project organization (项目管理) Work breakdown structure (WBS)

(工作结构分解) Gantt charts (甘特图) Program evaluation and review

technique (PERT) (计划评审技术) Critical path method (CPM) (关键

路线法) Critical path (关键路线) Activity-on-node (AON) (点线法) Activity-on-arrow (AOA) (箭线法) Dummy activities （虚活动）

Critical path analysis（关键路线分析）

Forward pass （正推法） Backward pass （逆推法） Slack time （松弛时间） Total slack （总浮时） Free slack （自由浮时） Optimistic time （乐观时间） Pessimistic time （悲观时间） Most likely time （最可能时间） Beta probability distribution (β分

布) Crashing （赶工）

What is Project, and Project Management?

Project: (项目)

Unique, one-time operations designed to accomplish a set of objectives in a limited time frame

Project Management: (项目管理)

Planning(计划), scheduling(排程,일정관리), and controlling(控制) resources(资源) (people, equipment, material) to meet the technical, cost, and time constraints of a project

Examples of Project

Building Construction

Microsoft® Vista Development Project

Space Shuttle Development Project

Research Project

Class Term Project

Etc.

Management of Large Projects

Planning (计划)- goal setting(设计目标), project definition(定义项目), team organization (项目小组)

Scheduling (排程, 일정관리)- relating people, money, and supplies to specific activities, and relating activities to each other

Controlling (控制)- monitoring resources, costs, quality, and budgets; revising plans and shifting resources to meet time and cost demands

Project Management Activities

Planning

Objectives

Resources

Work break-

down schedule

Organization

Scheduling

Project

activities

Start & end

times

Network

Controlling

Monitor, compare,

revise, action

Project Planning, Scheduling, and Controlling

Project Life-Cycle

Project Planning (计划)

Establishing objectives (设立目标)

Defining project (定义项目)

Creating work breakdown structure (WBS*)

Determining resources (资源)

Forming organization (形成组织)

© 1995 Corel Corp.

Project Planning:Project Organization (项目小组)

Often temporary structure

Uses specialists from entire company

Headed by project manager (PM)

Coordinates activities

Monitors schedule& costs

Permanent structure called ‘matrix(矩阵) organization’

© 1995 Corel Corp.

Acct.

Eng. Eng.

Mkt.

Mgr.

Project Planning:An Example of Project Organization

Sales

President

FinanceHuman

ResourcesEngineering

Quality

ControlProduction

TechnicianTest

Engineer

Propulsion

EngineerPhysiologist

Project

Manager

PsychologistStructural

Engineer

Inspection

TechnicianTechnician

Project 1

Project 2

Project

Manager

Matrix Organization

Project Planning:The Role of Project Manager (PM)

Project Plan

and Schedule

Revisions and

Updates

Project

Manager

Project

Team

Top

ManagementResources

Performance

Reports

Information

regarding times,

costs, problems,

delays Feedback Loop

Project Planning: Work Breakdown Structure (WBS)

1. 1.0 Project

2. 1.1 Major tasks in the project

3. 1.1.1 Subtasks in the major tasks

4. 1.1.1.1 Activities (or work packages) to be completed

WBS: The hierarchy of project tasks, subtasks, and activities (or work packages)

Level Level ID Activity

Project Scheduling (排程,일정관리)

Identifying precedence relationships (先后关系)

Sequencing activities

Determining activity times & costs

Estimating material & worker requirements

Determining critical activities (关键活动)

© 1995 Corel Corp.

Project Scheduling:Gantt Chart

Project Control (控制)

Monitoring resources, costs, quality, and budgets;

Revising plans and shifting resources to meet time and cost demands

Project Management Techniques

Gantt chart(甘特图)

Critical Path Method (CPM 关键路径发)

Program Evaluation & Review Technique (PERT 计划评审技术)

© 1984-1994 T/Maker Co.

PERT and CPM

Network techniques

Developed in 1950’s CPM by DuPont for chemical plants (1957)

PERT by Booz, Allen & Hamilton with the U.S. Navy, for Polaris missile (1958)

Consider precedence relationships and interdependencies

Each uses a different estimate of activity times

PERT: Program Evaluation and Review Technique

CPM: Critical Path Method

Understanding Problem!!

Understanding

Problem

Developing

Proper Model

Finding Solution

Technique

Communicable


Domain Expert

(Studying general


Experience)

Operations Research

(경영과학)


and Computational

Methodology

Existing Models:

LP Model,

Queueing Model,

Simulation Model,

PERT/CPM Model

Develop New Models

OM EXPERT!!

Project Management Problem

Given, Activities from WBS Activity Times and Costs Precedence Relationships

Answer Is the project on schedule, ahead of schedule, or behind schedule?

(프로젝트가 계획대로 진행될 것인가?) Is the project over or under cost budget?

(프로젝트 예산에 맞는가 아니면 초과 혹 미달 하는가?) Are there enough resources available to finish the project on time?

(프로젝트를 정시에 마치기 위한 충분한 가용한 자원이 있는가?) If the project must be finished in less than the scheduled amount

of time, what is the way to accomplish this at least cost?(만약 프로젝트를 좀 더 빨리 끝내기 위해서는 최소의 비용으로 어떻게 해야 하는가?)

Milwaukee General Hospital’s Activities and Predecessors

Activity Description ProcessingTime

Immediate Predecessors

A Build internal components 2 -

B Modify roof and floor 3 -

C Construct collection stack 2 A

D Pour concrete and install frame 4 A, B

E Build high-temperature burner 4 C

F Install pollution control system 3 C

G Install air pollution device 5 D, E

H Inspect and test 2 F, G

AON(点线法) Network for Milwaukee General Hospital

Start

A

B

C

D

E

F

G

H

AOA(箭线法) Network (With Dummy Activities) for Milwaukee General

1

3

2 4

5

6 7H

Inspect/Test

D

Pour concrete/ Install frame

C

Construct stack

Dummy

Activity

A Comparison of AON and AOA Network Conventions

Critical Path (关键路径) and Slack Time(松弛时间)

A

B

C4

2

2

Slack = 0

A

B

C3

2

2

Slack = 1

Critical Path Analysis

Provides activity information Earliest (ES) & latest (LS) start

Earliest (EF) & latest (LF) finish

Slack (S): Allowable delay

Identifies critical path Longest path in network

Shortest time project can be completed

Any delay on critical path activities delays project

Critical path activities have 0 slack

Earliest Start and Finish Steps

Begin at starting event and work forward

ES = 0 for starting activities

ES is earliest start

EF = ES + Activity time

EF is earliest finish

ES = Maximum EF of all predecessors for non-starting activities

Latest Start and Finish Steps

Begin at ending event and work backward

LF = Maximum EF for ending activities

LF is latest finish; EF is earliest finish

LS = LF - Activity time

LS is latest start

LF = Minimum LS of all successors for non-ending activities

Latest Start and Finish Steps

Latest

Finish

ES

LS

EF

LF

Earliest

Finish

Latest

Start

Earliest

Start

Activity

Nam

e

Activity

Duration

Critical Path(关键路径) forMilwaukee General Hospital

Start

A

B

C

D

E

F

G

H

AON Network for Milwaukee General Hospital Forward Calculation

Start

A

B

C

D

E

F

G

H0

00

0

0


Start

A

B

C

D

E

F

G

H0

00

0

0

A0

02

2

0


Start

A

B

C

D

E

F

G

H0

00

0

0

A0

02

2

0

B0

03

3

0


Start

A

B

C

D

E

F

G

H0

00

0

0

A0

02

2

0

B0

03

3

0

D3

04

7

0

C2

02

4

0E

4

04

8

0

F4

03

7

0

G8

05

13

0

H13

02

15

0

AON Network for Milwaukee General Hospital Backward Calculation

Start

A

B

C

D

E

F

G

H0

00

0

0

A0

02

2

0

B0

03

3

0

D3

04

7

0

C2

02

4

0E

4

04

8

0

F4

03

7

0

G8

05

13

0

H13

132

15

15


Start

A

B

C

D

E

F

G

H0

00

0

0

A0

02

2

0

B0

03

3

0

D3

04

7

0

C2

02

4

0E

4

04

8

0

F4

103

7

13

G8

85

13

13

H13

132

15

15


Start

A

B

C

D

E

F

G

H0

00

0

0

A0

02

2

0

B0

03

3

0

D3

44

7

8

C2

02

4

0E

4

44

8

8

F4

103

7

13

G8

85

13

13

H13

132

15

15


Start

A

B

C

D

E

F

G

H0

00

0

0

A0

02

2

0

B0

03

3

0

D3

44

7

8

C2

22

4

4E

4

44

8

8

F4

103

7

13

G8

85

13

13

H13

132

15

15


Start

A

B

C

D

E

F

G

H0

00

0

0

A0

02

2

2

B0

13

3

4

D3

44

7

8

C2

22

4

4E

4

44

8

8

F4

103

7

13

G8

85

13

13

H13

132

15

15

Slack=0 Slack=0

Slack=0

Slack=0

Slack=6

Slack=1Slack=1

Start


Start

A

B

C

D

E

F

G

H0

00

0

0

A0

02

2

2

B0

13

3

4

D3

44

7

8

C2

22

4

4E

4

44

8

8

F4

103

7

13

G8

85

13

13

H13

132

15

15

Slack=0 Slack=0

Slack=0

Slack=0

Slack=6

Slack=1Slack=1

StartCriticalPath

Gantt Chart(甘特图)Earliest Start and Finish

Milwaukee General Hospital

A Build internal components

B Modify roof and floor

C Construct collection stack

D Pour concrete and install frame

E Build high-temperature burner

F Install pollution control system

G Install air pollution device

H Inspect and test

1 2 3 4 5 6 7 8 9 10 1112 13 1415 16

Gantt ChartLatest Start and Finish

Milwaukee General Hospital

A Build internal components

B Modify roof and floor

C Construct collection stack

D Pour concrete and install frame

E Build high-temperature burner

F Install pollution control system

G Install air pollution device

H Inspect and test

1 2 3 4 5 6 7 8 9 10 1112 13 1415 16

Using MS-Project 2003

Example and Practice

Milwaukee General Hospital’s Activities and Predecessors

Activity Description ProcessingTime

Immediate Predecessors

A Build internal components 2 -

B Modify roof and floor 3 -

C Construct collection stack 2 A

D Pour concrete and install frame 4 A, B

E Build high-temperature burner 4 C

F Install pollution control system 3 C

G Install air pollution device 5 D, E

H Inspect and test 2 F, G

PERT Activity Times

3 time estimates (p781)

Optimistic times (a)

Most-likely time (m)

Pessimistic time (b)

Assume to follow beta distribution, then

Expected time: t = (a + 4m + b)/6

Variance of times: s2 =v= (b - a)2/62

What if activity times are not certainty????

Project Times

Expected project time (T)

Sum of critical path activity times, t i

T = ti

Project variance (S2)

Sum of critical path activity variances, vi

S2 = vi

Desired project completion time Random Variable (D)

Used to obtain

probability of project

completion!

)1,0(~

),,(~

NormS

TDZ

STNormD

Activity Expected Times and Variances

Activity Description a m b t s2

A Build internal components 1 2 3 2 1/9

B Modify roof and floor 2 3 4 3 1/9

C Construct collection stack 1 2 3 2 1/9

D Pour concrete and install frame 1 4 4 3.5 1/4

E Build high-temperature burner 1 4 5 11/3 4/9

F Install pollution control system 2 3 4 3 1/9

G Install air pollution device 1 5 3 4 1/9

H Inspect and test 2 2 2 2 0

t = (a + 4m + b)/6

s2 = (b - a)2/62

Critical Path: A-C-E-G-H, T=2+2+11/3+4+2 = 123/9=13.667, S2=1/9+1/9+4/9+1/9=7/9=0.778

Suppose thatd = 15.43, then

0.29994.1

9/7

9/12343.15

Z

Converting to Standardized Variable

T = 13.67

s2= 7/9

15.43 X

Normal

Distribution

mz = 0

s2Z

= 1

Z2.0

Standardized Normal

Distribution

0.2778.0

667.1343.15

Z

)0.2()778.0

667.1343.15()43.15(

ZP

S

TDPDP

Obtaining the Probability

mz = 0

sZ

= 1

Z2.0

Z .00 .01

0.0 .50000 .50399

: : : :

2.0 .97725 .97784 .97831

2.1 .98214 .98257 .98300

Standardized Normal Probability

Table (Portion) [see Appendix I]

Probabilities in body

.02

.50798

.97725

Project Success Probability = 97.7%

Variability of Completion Time for Non-critical Paths

Variability of times for activities on non-critical paths must be considered when finding the probability of finishing in a specified time.

Variation in non-critical activity may cause change in critical path.

Factors to Consider when Crashing

The amount by which an activity is crashed is, in fact, permissible.

Taken together, the shortened activity durations will enable one to finish the project by the due date.

The total cost of crashing is as small as possible.

Steps in Project Crashing(赶工)

Compute the crash cost per time period. For crash costs assumed linear over time:

Using normal activity times, find the critical path If there is only one critical path, then select the activity on

this critical path that (a) can still be crashed, and (b) has the smallest crash cost per period. Note that a single activity may be common to more than one critical path

Update all activity times.

)Crash time time(Normal

cost) Normalcost(Crash periodper cost Crash

Example: Project Crashing Step 1

A

NT=2

CT=1

NC=$6

CC=$10

B

NT=5

CT=2

NC=$9

CC=$18

D

NT=3

CT=1

NC=$5

CC=$9

C

NT=4

CT=3

NC=$6

CC=$8

NT= Normal TimeCT= Crash TimeNC= Normal CostCC= Crash Cost

Step1: Prepare Network Diagram with Activity Cost

Example: Project CrashingStep 2

Step2: Calculation of Cost per time to expedite each activity

ActivityCC-NC

NT-CT

(CC-NC) / (NT-CT)

Cost per time to expedite

Times may be shortened

A 4 1 4/1 4 1

B 9 3 9/3 3 3

C 2 1 2/1 2 1

D 4 2 4/2 2 2

Which activity should be expedited?

CT NT

NC

CC

Example: Project CrashingStep 3

Step3: Reducing the project completion time one at a time

Current Critical Path

Remaining Number of time activity may be shortened

Least-cost activity to expedite (cost)

Total cost of all activities in network

Project completion

Time

ABD $26 10

ABD A-1, B-3, D-2 D ($2) $28 9

ABD A-1, B-3, D-1 D ($2) $30 8

ABD A-1, B-3 B ($3) $33 7

ABCD A-1, B-3, C-1 A ($4)* $37 6

ABCD B-2, C-1 B and C ($5) $42 5

ABCD B-1 B ($3) $45 5

Example




ABD

ABD A-1, B-3, D-2 D ($2)

ABD A-1, B-3, D-1 D ($2)

ABD A-1, B-3 B ($3)

ABCD A-1, B-3, C-1 A ($4)*

ABCD B-2, C-1 B and C ($5)

ABCD B-1 B ($3)

A

NT=2

CT=1

NC=$6

CC=$10

B

NT=5

CT=2

NC=$9

CC=$18

D

NT=3

CT=1

NC=$5

CC=$9

C

NT=4

CT=3

NC=$6

CC=$8

PT=10

TC=$26

A: 4 $/hB: 3 $/hC: 2 $/hD: 2 $/h

Example




ABD

ABD A-1, B-3, D-2 D ($2)

ABD A-1, B-3, D-1 D ($2)

ABD A-1, B-3 B ($3)

ABCD A-1, B-3, C-1 A ($4)*


ABCD B-1 B ($3)

A

NT=2

CT=1

NC=$6

CC=$10

B

NT=5

CT=2

NC=$9

CC=$18

D

T=2

CT=1

NC=$5

CC=$9

C

NT=4

CT=3

NC=$6

CC=$8

PT=9

TC=$28

A: 4 $/hB: 3 $/hC: 2 $/hD: 2 $/h

Example




ABD

ABD A-1, B-3, D-2 D ($2)

ABD A-1, B-3, D-1 D ($2)

ABD A-1, B-3 B ($3)

ABCD A-1, B-3, C-1 A ($4)*


ABCD B-1 B ($3)

A

NT=2

CT=1

NC=$6

CC=$10

B

NT=5

CT=2

NC=$9

CC=$18

D

T=1

CT=1

NC=$5

CC=$9

C

NT=4

CT=3

NC=$6

CC=$8

PT=8

TC=$30

A: 4 $/hB: 3 $/hC: 2 $/hD: 2 $/h

Example




ABD

ABD A-1, B-3, D-2 D ($2)

ABD A-1, B-3, D-1 D ($2)

ABD A-1, B-3 B ($3)

ABCD A-1, B-3, C-1 A ($4)*


ABCD B-1 B ($3)

A

NT=2

CT=1

NC=$6

CC=$10

B

T=4

CT=2

NC=$9

CC=$18

D

T=1

CT=1

NC=$5

CC=$9

C

NT=4

CT=3

NC=$6

CC=$8

PT=7

TC=$33

A: 4 $/hB: 3 $/hC: 2 $/hD: 2 $/h

Example




ABD

ABD A-1, B-3, D-2 D ($2)

ABD A-1, B-3, D-1 D ($2)

ABD A-1, B-3 B ($3)

ABCD A-1, B-3, C-1 A ($4)*


ABCD B-1 B ($3)

A

T=1

CT=1

NC=$6

CC=$10

B

T=4

CT=2

NC=$9

CC=$18

D

T=1

CT=1

NC=$5

CC=$9

C

NT=4

CT=3

NC=$6

CC=$8

PT=6

TC=$37

A: 4 $/hB: 3 $/hC: 2 $/hD: 2 $/h

Example




ABD

ABD A-1, B-3, D-2 D ($2)

ABD A-1, B-3, D-1 D ($2)

ABD A-1, B-3 B ($3)

ABCD A-1, B-3, C-1 A ($4)*


ABCD B-1 B ($3)

A

T=1

CT=1

NC=$6

CC=$10

B

T=3

CT=2

NC=$9

CC=$18

D

T=1

CT=1

NC=$5

CC=$9

C

T=3

CT=3

NC=$6

CC=$8

PT=5

TC=$42

A: 4 $/hB: 3 $/hC: 2 $/hD: 2 $/h

Example




ABD

ABD A-1, B-3, D-2 D ($2)

ABD A-1, B-3, D-1 D ($2)

ABD A-1, B-3 B ($3)

ABCD A-1, B-3, C-1 A ($4)*


ABCD B-1 B ($3)

A

T=1

CT=1

NC=$6

CC=$10

B

T=3

CT=2

NC=$9

CC=$18

D

T=1

CT=1

NC=$5

CC=$9

C

T=3

CT=3

NC=$6

CC=$8

PT=5

TC=$42

A: 4 $/hB: 3 $/hC: 2 $/hD: 2 $/h

Advantages of PERT/CPM

Especially useful when scheduling and controlling large projects.

Straightforward concept and not mathematically complex. Graphical networks aid perception of relationships among

project activities. Critical path & slack time analyses help pinpoint activities that

need to be closely watched. Project documentation and graphics point out who is

responsible for various activities. Applicable to a wide variety of projects. Useful in monitoring schedules and costs.

Limitations of PERT/CPM

Assumes clearly defined, independent, & stable activities

Specified precedence relationships

Activity times (PERT) follow beta distribution

Subjective time estimates

Over-emphasis on critical path

Summary

Project Management is important to meet the schedule.

Use MS-Projector!

Techniques Critical Path Analysis

PERT

Crashing

Gantt Chart

Terms: Project, PERT, CPM, Matrix Organization, Gantt Chart

What to do next…

Read Chapter 17 again and Chapter 5, 5s

Do HW#2

Play with MS-Project®

HW#2

Find the definitions of the terms

WBS, PERT, CPM, Critical Path, Slack Time, Crashing

Review Solved Problem

Problem 1, 2, 3 (on 795)

Solve these Problems

11, 15

USE MS-Project

To be OM Expert !!!

Understanding

Problem

Developing

Proper Model

Finding Solution

Technique

Communicable


Domain Expert

(Studying general


Experience)

Operations Research

(경영과학)


and Computational

Methodology

Existing Models:

LP Model,

Queueing Model,

Simulation Model,

PERT/CPM Model

Develop New Models

OM EXPERT!!

Project Management!!!

Good Bye

Documents

Introduction to Operations Management - Wikispacesyustom.wikispaces.com/file/view/OM03_ProjectManagementEN.pdf/... · Introduction to Operations Management Ch. 17. Project Management