Unit III Project Topic Please complete the information below based on the project you have chosen for your project plan. Project Network Diagram: Description of the critical path in your project: Description of how your project might be affected by delays in the critical path and how you could get the project back on schedule if such delays happen: Description of project time and cost estimates and how your WBS impacts those estimates: UNIT III STUDY GUIDE Estimating Project Times and Costs and Developing a Project Plan Course Learning Outcomes for Unit III Upon completion of this unit, students should be able to: 3. Discuss guidelines for creating a work breakdown structure (WBS). 3.1 Describe how creating a WBS can impact time and cost estimates. 4. Develop a process for determining the critical path method (CPM). 4.1 Assemble a project network diagram. 4.2 Describe the critical path of a project. 4.3 Describe how delays in the critical path can affect a project and the options that can be used to get it back on schedule. Course/Unit Learning Outcomes 3.1 4.1 4.2 4.3 Learning Activity Unit Lesson Chapter 5 Unit III Project Topic Chapter 6 Unit III Project Topic Unit Lesson Chapter 6 Unit III Project Topic Unit Lesson Chapter 6 Unit III Project Topic Reading Assignment Chapter 5: Estimating Project Times and Costs, pp. 129–152 Chapter 6: Developing a Project Plan, pp. 163–189 Unit Lesson Planning the Project In the video segment for this unit, we will learn about the importance of planning a framework to complete the project. To access the following resource, click the link below. Knights, R. (Director). (2017). Plan the project (Segment 4 of 8) [Video file]. Retrieved from https://libraryresources.columbiasouthern.edu/login?auth=CAS&url=http://fod.infobase.com/PortalPla ylists.aspx?wID=273866&xtid=124190&loid=455601 Click here to view the transcript for the video above. Estimating Project Times and Costs Many times, in an effort to get a project started as soon as possible, project managers will sometimes skip the all-important process of estimating the length of time a project will take to complete and how much it will cost BBA 4126, Project Planning 1 to complete. It is important to take the time to do this so that one does not encounter costly and ugly UNIT x some STUDY GUIDE surprises down the road! Title It is important to estimate time and cost of a project for several reasons, some of which are listed below.     With these estimates in hand, project managers are empowered to make better decisions about who should work on specific tasks within the project and can plan ahead of time for issues that may arise during the project. The project manager can inform stakeholders about how long the project will take and its cost before beginning. This way, a determination can be made about whether the project is truly cost effective for the organization and whether the project should be continued. The project manager will be able to see at a glance how well the project is progressing by comparing the actual time it is taking to the estimated time. The project manager can have an idea about how much money he or she should have on hand to handle cash flow needs (Larson & Gray, 2018). Guidelines for estimating time and cost are listed below.        Have people who are familiar with what a task entails to make the estimate on how long it will take. It is always best to utilize an individual who actually does the job rather than someone who has a preconceived notion regarding it. Utilize more than one person to make estimates. Different people notice different things about tasks that must be taken into account. This way, a project manager can be certain that all of his or her bases are covered. Estimates should be based on normal conditions and the normal number of resources in place. Use consistent units of time throughout. If you start with hours, maintain the use of hours to avoid confusion down the road. Treat each task as independent in order ensure that each task has enough time to be completed. Do not make allowances for unforeseen events. There should be an extra fund in place for such occurrences. Create a risk assessment plan so that stakeholders will not be surprised if something takes a little longer or costs a bit more than it should (Larson & Gray, 2018). Developing a Project Plan Project planning begins with the development of a project network (Larson & Gray, 2018). This tool is used to help a project manager plan, schedule, and monitor the progress of his or her project and is developed from information that was collected and used to create the project’s work breakdown structure (WBS) (Larson & Gray, 2018). Project managers for large-scale projects have a higher reliance on the accuracy of the WBS than those of small-scale projects (Larson & Gray, 2018). Many of the projects used every day involve a WBS that was created from multiple WBSs overlapping. The interstate highway system, major airports, cell phones, and the Internet all involved phased projects that required overlapping WBSs. A change in one WBS affects the entire project both in time and cost. Although they may not have created actual WBSs at the time, the most famous historical projects were phased projects involving overlapping WBSs, such as construction of the Eiffel Tower, the Statue of Liberty, the transcontinental railroad, the New York subway system and Grand Central Station, and the pyramids in Egypt. Military maneuvers and wars, such as WWI and WWII, Vietnam, and the Civil War, are large-scale projects requiring a WBS to identify who is responsible for what. Knowing who is responsible for what activity within a project is critical to the project’s success. Following the concept of who is responsible for what is the idea of identifying when the identified action(s) need to occur to determine the most time- and cost-efficient order of operations. The process of identifying the various paths to get a project from start to finish and determining which activities are dependent on a previous one is called network diagramming (Larson & Gray, 2018). By noting the activity order based on dependency restriction, a project manager can identify the longest time from start to finish. This is the critical path. The critical path of a project has no wiggle room or float. Any variance on the critical path will affect both time and cost. Activities that take longer than planned will cause delays in that start of subsequent activities, and activities that finish sooner than planned can require an adjustment of all subsequent activities to begin earlier. Changes to the schedule incur a cost, whether from contractual obligations, loss of early completion incentives, wasted staff time, increased supply costs, or any number of other reasons. BBA 4126, Project Planning 2 When projects get behind schedule, the network diagram should be reviewed UNIT to determine if fast-tracking, x STUDY GUIDE crashing, or both are viable options to get the project back on schedule (Larson & Gray, 2018). Some Title projects, such as the building of the New York subway system, can be fast-tracked so that various trades are working on different areas of the project site concurrently, but other projects, such as war, have limited options for fast-tracking because the main components of the project are personnel and equipment. One does not work without the other. Similarly, some projects can be crashed to get correct schedule delays. Projects like the Hoover Dam had additional resources added to speed the completion, while projects like the building of the transcontinental railroad would have had limited benefit from additional resources because supplies could only be moved to job sites so fast. Outsourcing can also be used to reduce project slippage, improve utilization of critical resources, and avoid resource bottlenecks (Larson & Gray, 2018). For example, project delays can be avoided by contracting key activities when resources are not available internally. Likewise, hiring consultants to help with on an information technology (IT) project, for example, allows critical IT people to work on specific problems, while the outsiders work on standard programs. Not only does the project get done on time, but also the company avoids hiring extra IT personnel to meet a short-term need. Indirect (overhead) costs are costs that cannot be attributed to a specific activity or work package (Larson & Gray, 2018). Examples of indirect costs are supervision, consultants, debt interest charges, machinery common to several activities, accounting and information processing, public relations, or penalties or incentives for early or late completion. In practice, it is amazing how many project compression decisions are made without serious consideration of indirect costs. A Closer Look The project manager should complete the project on time and within budget. However, even when these two goals are met, project success is not guaranteed. The final project deliverable must meet customer satisfaction. If the customer is not happy, being on time and within budget is of little value. Let’s assume the project manager is working on a project to build a new community swimming pool for the City of San Antonio (CoSA). An early step is to collect the requirements from the stakeholders. The project manager will meet with key CoSA stakeholders to learn what is important to them.     Who is going to use the swimming pool? What is the anticipated capacity? What are the safety issues? What are the important features? Once the requirements are collected, the project manager and project team will define the scope, which means the work that will be included in the project. Just as important, the scope includes any work that falls outside of the project. For example, perhaps a diving board is a safety concern and will not be included in the scope. After the scope is defined, the WBS is created. A project cannot exist without a WBS. In essence, the WBS is broken down to the work-package level, which allows the project manager the ability to assign the right resources at the right time. The WBS is an essential input to the project schedule. The project manager must be committed to the schedule even more than the budget. In other words, the schedule drives the budget. Managing projects is tough. For this reason, it is vital to follow a framework. The project manager must assemble a committed and organized team to ensure the project is on time, within budget, and to the customer’s satisfaction. Reference Larson, E. W., & Gray, C. F. (2018). Project management: The managerial process (7th ed.). New York, NY: McGraw-Hill Education. BBA 4126, Project Planning 3
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