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Project Management
To accompany
Quantitative Analysis for Management, Tenth Edition,
by Render, Stair, and Hanna 2008 Prentice-Hall, Inc.
Power Point slides created by Jeff Heyl 2009 Prentice-Hall, Inc.
Learning Objectives
After completing this chapter, students will be able to:
1. Understand how to plan, monitor, and control
projects with the use of PERT and CPM
2. Determine earliest start, earliest finish, latest
start, latest finish, and slack times for each
activity, along with the total project
completion time
3. Reduce total project time at the least total
cost by crashing the network using manual or
linear programming techniques
4. Understand the important role of software in
project management
13.1 Introduction
13.2 PERT/CPM
13.3 PERT/Cost
13.4 Project Crashing
13.5 Other Topics in Project
Management
A C F
Build Internal Construct Install Control
Components Collection Stack System
E H
Start Inspect Finish
Build Burner and Test
B D G
Modify Roof Pour Concrete Install Pollution
and Floor and Install Frame Device
Figure 13.1
Probability of 1 in 100
of a Occurring
Probability
Probability of 1 in 100
of b Occurring
Activity Time
Most Most Most
Optimistic Likely Pessimistic
Time Time Time
(a) (m) (b)
Figure 13.2
2009 Prentice-Hall, Inc. 13 19
Activity Times
To find the expected activity time (t), the beta
distribution weights the estimates as follows
a 4m b
t
6
Table 13.2
E 4 H 2
Start Finish
B 3 D 4 G 5
Figure 13.3
A t=2
ES = 0 EF = 0 + 2 = 2
Start
B t=3
ES = 0 EF = 0 + 3 = 3
A 2 C 2 F 3
0 2 2 4 4 7
E 4 H 2
Start 4 8 13 15 Finish
B 3 D 4 G 5
0 3 3 7 8 13
Figure 13.4
LS = LF t = 15 2 = 13 weeks
A 2 C 2 F 3
0 2 2 4 4 7
0 2 2 4 10 13
E 4 H 2
Start 4 8 13 15 Finish
4 8 13 15
B 3 D 4 G 5
0 3 3 7 8 13
1 4 4 8 8 13
Figure 13.5
Table 13.3
A 2 C 2 F 3
0 2 2 4 4 7
0 2 2 4 10 13
E 4 H 2
Start 4 8 13 15 Finish
4 8 13 15
B 3 D 4 G 5
0 3 3 7 8 13
1 4 4 8 8 13
Figure 13.6
15 Weeks
(Expected Completion Time)
Figure 13.7
2009 Prentice-Hall, Inc. 13 36
Probability of Project Completion
The standard normal equation can be applied as
follows
Due date Expected date of completion
Z
T
16 weeks 15 weeks
0.57
1.76 weeks
From Appendix A we find the probability of
0.71566 associated with this Z value
That means there is a 71.6% probability this
project can be completed in 16 weeks or less
Probability
(T 16 Weeks)
is 71.6%
15 16 Time
Weeks Weeks
Figure 13.8
Table 13.4
A
B
C
D
Activity
E
F
G
H
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Week
Figure 13.9
B 10 10 10 30
C 13 13 26
D 12 12 12 12 48
E 14 14 14 14 56
F 10 10 10 30
G 16 16 16 16 16 80
H 8 8 16
308
Total to date 21 42 65 90 126 162 198 212 228 244 260 276 292 300 308
Table 13.6
B 10 10 10 30
C 13 13 26
D 12 12 12 12 48
E 14 14 14 14 56
F 10 10 10 30
G 16 16 16 16 16 80
H 8 8 16
308
Total to date 11 32 55 78 104 130 156 182 198 214 240 266 292 300 308
Table 13.7
50,000
Figure 13.10
| | | | | | | | | | | | | | |
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Weeks
2009 Prentice-Hall, Inc. 13 51
Monitoring and Controlling
Project Costs
Costs are monitored and controlled to ensure the
project is progressing on schedule and that cost
overruns are kept to a minimum
The status of the entire project should be checked
periodically
The project is now in its 6th week of 15 weeks
Activities A,B, and C have completed at costs of
$20,000, $36,000 and $26,000 respectively
Activity D is only 10% complete at a cost of $6,000
Activity E is 20% complete at a cost of $20,000
Activity F is 20% complete with a cost of $4,000
What is the value of the work completed?
Are there any cost overruns?
2009 Prentice-Hall, Inc. 13 52
Monitoring and Controlling
Project Costs
Monitoring and controlling budgeted cost
VALUE OF
TOTAL WORK ACTIVITY
BUDGETED PERCENT OF COMPLETED ACTUAL DIFFERENCE
ACTIVITY COST ($) COMPLETION ($) COST ($) ($)
A 22,000 100 22,000 20,000 2,000
B 30,000 100 30,000 36,000 6,000
C 26,000 100 26,000 26,000 0
D 48,000 10 4,800 6,000 1,200
E 56,000 20 11,200 20,000 8,800
F 30,000 20 6,000 4,000 2,000
G 80,000 0 0 0 0
H 16,000 0 0 0 0
Total 100,000 112,000 12,000
Table 13.8 Overrun
NODE Time ES EF LS LF
A 1 0 1 0 1
B 3 0 3 0 3
C 2 1 3 1 3
D 4 3 7 3 7
E 4 3 7 3 7
F 3 3 6 9 12
G 5 7 12 7 12
H 2 12 14 12 14