Business Finance
GSO1100 Alfaisal University Project Management Case Discussion

GSO1100

Alfaisal University

Question Description

I’m stuck on a Powerpoint question and need an explanation.

1. What is more important to Brent—cost or on-time completion?
2. Prepare a network diagram/chart for the project.
3. Using project management software, such as Microsoft Project, identify the critical path, the slack times, and project completion date. Be sure to include the name of the activities, duration, and predecessor activities from Exhibit 1 in the case and provide the late start/early start and late finish/early finish data.
4. Are there opportunities to re-sequence the activities in the project to shorten the completion time? Learn project crashing, explain it to students and tell us which activities would you consider crashing and why?
5. Brent is considering a number of possible alternatives to reduce the overall length of the project. As Brent Collver, what action would you take and why? Show your revised project plan.
(a) Ask the contractor to provide additional technicians to reduce the time required to complete electrical and pneumatic construction by two weeks, at a cost premium of $20,000.
(b) Use two contractors for office construction instead of one. One contractor would be responsible for the office structure; the second contractor would be responsible for installation of fire alarm and safety systems, such as fire alarm, emergency lighting, and sprinklers. This approach would reduce the expected completion time for the office by three weeks but increase costs by $30,000.
(c) Ask the contractor to work overtime on Saturdays to reduce the time to complete the quality/supervisor pod construction by two weeks, at a cost premium of $35,000.
(d) Use a different contractor to install the anodizing line in 10 weeks, at cost premium of $50,000.
Recommindations
Conclusion

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GSO-1100 Operations and logistics Project Management Leandro C. Coelho, Ph.D. Laval University, Canada Dép. Opérations et systèmes de décision GSO-1100 Managing Projects 3 PowerPoint presentation to accompany Heizer and Render Operations Management, Global Edition, Eleventh Edition Principles of Operations Management, Global Edition, Ninth Edition PowerPoint slides by Jeff Heyl © 2014 Pearson Education 2 GSO-1100 Bechtel Projects ► Constructing 30 high-security data centers worldwide for Equinix, Inc. ($1.2 billion) ► Building and running a rail line between London and the Channel Tunnel ($4.6 billion) ► Developing an oil pipeline from the Caspian Sea region to Russia ($850 million) ► Expanding the Dubai Airport in the UAE ($600 million), and the Miami Airport in Florida ($2 billion) 3 GSO-1100 Bechtel Projects ► Building liquid natural gas plants in Yemen ($2 billion) and in Trinidad, West Indies ($1 billion) ► Building a new subway for Athens, Greece ($2.6 billion) ► Constructing a natural gas pipeline in Thailand ($700 million) ► Building 30 plants for iMotors.com, a company that sells refurbished autos online ($300 million) ► Building a highway to link the north and south of Croatia ($303 million) 4 Saudi Arabia's top 20 construction projects to watch in 2019 GSO-1100 With more than 5,000 projects worth trillions of riyals in the pipeline, construction in Saudi Arabia is an important tool to build the future. 5 Saudi Arabia's top 20 construction projects to watch in 2019 GSO-1100 • Neom ($500bn, SAR 1.9tn) • Riyadh Rapid Bus Transit System • The Red Sea Project • King Fahd Medical City Expansion • Qiddiya entertainment city. • Amaala • Jean Nouvel's Sharaan resort in AlUla • Makkah Grand Mosque – Third Expansion • King Abdullah Bin Abdulaziz Medical Complexes • King Salman Energy Park (Spark) • Saudi Aramco’s Berri and Marjan • Jeddah Tower • Hanergy solar park • Ministry of Housing’s Sakani homes • Dumat Al Jandal wind power plant • Jabal Omar • Al Widyan • Riyadh Metro • Saudi Aramco-Total’s PIB factory • Pan-Asia bottling facility 6 Importance of Project Management ► GSO-1100 Saudi Construction Project Management ► International workforce, construction professionals, cooks, medical personnel, security, etc ► Strategic value of time-based competition ► Quality mandate for continual improvement 7 Project Characteristics ► Single unit ► Many related activities ► Difficult production planning and inventory control ► General purpose equipment ► High labor skills GSO-1100 8 Today’s Objectives GSO-1100 Objectives – know the basics of project management – be able to use the Critical Path Method (CPM) – be able to use the Project Evaluation and Review Technique (PERT) 9 Outline GSO-1100 • Introduction, definition • Steps of project management • Precedence relationships • Network representation of a project • Critical Path Method (CPM) • Project Evaluation and Review Technique (PERT) 10 Definitions and objectives GSO-1100 A project is a unique, one-time operational assignment or effort composed of a set of complex activities that require time and money Project Management Objectives: – Finish the project as soon as possible, planning the start and end of each activity – Plan the activities in order to obtain the lowest cost and to finish the project before a given date – Evaluate the impact of delays in activity executions on the duration of the project – Manage and control work in progress – Level the use of resources throughout the duration of the project 11 Examples of Projects GSO-1100 ❑ Implement a new technology ❑ Build facilities or buildings ❑ Change the layout of a workshop ❑ Prepare and drive a publicity campaign ❑ Develop and implement a computer system ❑ Plan a concert, tournament, trip, etc… 12 Project Timeline GSO-1100 April 21 May 5 May 19 June 2 July 14 June 30 June 16 July 28 1 1. AS-IS analysis 2. TO-BE architecture (forecasting framework) 3. Transfer project 6B into a CAPEX project 2 4. Design phase 3 5. Analyse events : weather 6. Development phases 1 4 6.1 Direct forecasting + 1-3 forecasting methods 8 5 6.2 Top Down forecasting (hierarchy) 6 7 6.3 Bottom Up forecasting (hierarchy) 9 6.4 Bottom Up forecasting (time period) 10 6.5 Parametric forecasting methods 6.6 Dynamic Forecasting Processes 1 2 3 4 5 6 7 7. Knowledge transfer 8. Pilot tests 11 1 2 3 9. Integration tests 4 5 8 6 13 13 Project Management Activities ► GSO-1100 Planning ► Objectives ► Resources ► Work breakdown structure ► ► Scheduling ► Project activities ► Start & end times ► Network Organization ► Controlling ► Monitor, compare, revise, action 14 Project Planning, Scheduling, and Controlling GSO-1100 15 Project Planning, Scheduling, and Controlling GSO-1100 16 Project Planning, Scheduling, and Controlling GSO-1100 17 Project Planning, Scheduling, and Controlling GSO-1100 18 Project Planning, Scheduling, and Controlling GSO-1100 Time/cost estimates Budgets Engineering diagrams Cash flow charts Material availability details Budgets Delayed activities report Slack activities report CPM/PERT Gantt charts Cash flow schedules Figure 3.1 19 Example: Project RESO GSO-1100 Project RESO: project to implement a computer network. The project is composed of 3 successive phases: Phase 1: Planning Budget approval required initial evaluation, consider different approaches available, compare costs. Phase 2: Scheduling Place hardware, install software, train personnel. Phase 3: Control network. Establish procedures to ensure adequate use of the Task 1 Each phase Task 2 Task 3 . . 20 Example: Project RESO Code Description GSO-1100 I.P. Duration (days) A Initial evaluation - 5 B Establish network’s structure A 10 C Establish personnel training plan A 3 D Cost analysis B,C 5 E Review plans and budget approval B,C,D 5 F Install cables E 5 G Install servers F 5 H Install workstations G 3 I Install network software H 4 J Install telephone lines G 5 K Install bridges G 3 L Document network structure I,J,K 5 M Train personnel L 8 N Negotiate maintenance policies H,J,K 2 O Establish working procedures L,N 5 P Establish backup procedures O 5 Q Establish maintenance and repair policies O 5 21 Immediate Predecessor Code A B C D E F G H I J K L M N O P Q Description Initial evaluation Establish network’s structure Establish personnel training plan Cost analysis Review plans and budget approval Install cables Install servers Install workstations Install network software Install telephone lines Install bridges Document network structure Train personnel Negotiate maintenance policies Establish working procedures Establish backup procedures Establish maintenance and repair policies GSO-1100 I.P. Duration (days) A A B,C B,C,D E F G H G G I,J,K L H,J,K L,N O O 5 10 3 5 5 5 5 3 4 5 3 5 8 2 5 5 5 Immediate predecessor (I.P.): example, cost analysis (activity D) can only start once activities B and C are finished. 22 Distant Predecessor Code A B C D E F G H I J K L M N O P Q GSO-1100 Description Initial evaluation Establish network’s structure Establish personnel training plan Cost analysis Review plans and budget approval Install cables Install servers Install workstations Install network software Install telephone lines Install bridges Document network structure Train personnel Negotiate maintenance policies Establish working procedures Establish backup procedures Establish maintenance and repair policies I.P. for D are B and C I.P. for B is A I.P. Duration (days) A A B,C B,C,D E F G H G G I,J,K L H,J,K L,N O O 5 10 3 5 5 5 5 3 4 5 3 5 8 2 5 5 5 A must precede D: A is a distant predecessor of D since B is between them 23 Beginning of Project Code A B C D E F G H I J K L M N O P Q Description Initial evaluation Establish network’s structure Establish personnel training plan Cost analysis Review plans and budget approval Install cables Install servers Install workstations Install network software Install telephone lines Install bridges Document network structure Train personnel Negotiate maintenance policies Establish working procedures Establish backup procedures Establish maintenance and repair policies GSO-1100 I.P. Duration (days) A A B,C B,C,D E F G H G G I,J,K L H,J,K L,N O O 5 10 3 5 5 5 5 3 4 5 3 5 8 2 5 5 5 Activity A has no immediate predecessor : it is an initial activity of the project. A project can have more than one initial activity! 24 End of Project Code A B C D E F G H I J K L M N O P Q GSO-1100 Description Initial evaluation Establish network’s structure Establish personnel training plan Cost analysis Review plans and budget approval Install cables Install servers Install workstations Install network software Install telephone lines Install bridges Document network structure Train personnel Negotiate maintenance policies Establish working procedures Establish backup procedures Establish maintenance and repair policies I.P. Duration (days) A A B,C B,C,D E F G H G G I,J,K L H,J,K L,N O O 5 10 3 5 5 5 5 3 4 5 3 5 8 2 5 5 5 Activities M, P and Q are not I.P.s for any of the activities: these activities will be done at the end of the project. End of project : when ? 25 Notation and representation GSO-1100 • Predecessor : Activity A is a predecessor of activity X if A must precede one or many activities preceding X. • Immediate predecessor : Activity A is an immediate predecessor of activity B if A must precede B and no other activities are executed in between. • Immediate successor : Activity B is an immediate successor of activity A if A is an immediate predecessor of B. • Successor : Activity X is a successor of activity A if A is a predecessor of X. • Representation A B C X 26 Graph and Network Representations GSO-1100 • A graph can be – non oriented : set of nodes and branches where a chain defines a series of adjacent branches. – oriented : set of nodes and arrows where a path defines a series of adjacent arrows all pointing in the same direction. • When a weight is given to each line/arrow, the graph is called a network. 27 Network Representation of a Project GSO-1100 Two methods (know both !) – Activities on arrows (AOA) A(3) 1 2 – Activities on nodes (AON) A(3) B(2) 28 Activities on Nodes (AON) GSO-1100 • One and only one node for each activity • An arrow goes from activity A to activity C if A is an immediate predecessor of C Activity Activity on Nodes A C E B D A B C D E Immediate predecessors A B C,D 29 Activities on Arrows (AOA) GSO-1100 • One and only one arrow for each activity • Only one start node and one end node for the project • Each node must have a distinct number • If activity A is an immediate predecessor of activity C, then the start node for arrow C must be the end node for arrow A • If i is the start node for activity A and j is the end node, then i must be less than j Note : this last rule sometimes requires the addition of dummy activities Activities on Arrows (AOA) 2 C A E 4 1 D B 3 Activity 5 A B C D E Immediate predecessors A B C,D 30 A Comparison of AON and AOA Network Conventions GSO-1100 Activity on Node (AON) (a) A BC B A (b) C B B (c) A C Activity Meaning A comes before B, which comes before C A and B must both be completed before C can start B and C cannot begin until A is completed Activity on Arrow (AOA) A B C A B C B A C 31 A Comparison of AON and AOA Network Conventions GSO-1100 Activity on Node (AON) A C B D (d) A C (e) B D Activity Meaning C and D cannot begin until both A and B are completed C cannot begin until both A and B are completed D cannot begin until B is completed A dummy activity is introduced in AOA Activity on Arrow (AOA) A C B D A C Dummy activity B D 32 A Comparison of AON and AOA Network Conventions GSO-1100 Activity on Node (AON) A B (f) C D Activity Meaning B and C cannot begin until A is completed D cannot begin until both B and C are completed A dummy activity is again introduced in AOA Activity on Arrow (AOA) A Dummy activity B D C 33 PERT and CPM ► Network techniques ► Developed in 1950s ► ► GSO-1100 Critical Path Method (CPM) by DuPont for chemical plants (1957) Project Evaluation and Review Technique (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 34 Six Steps PERT & CPM GSO-1100 1. Define the project and prepare the work breakdown structure 2. Develop relationships among the activities - decide which activities must precede and which must follow others 3. Draw the network connecting all of the activities 4. Assign time and/or cost estimates to each activity 5. Compute the longest time path through the network – this is called the critical path 6. Use the network to help plan, schedule, monitor, and control the project 35 Questions PERT & CPM Can Answer GSO-1100 1. When will the entire project be completed? 2. What are the critical activities or tasks in the project? 3. Which are the noncritical activities? 4. What is the probability the project will be completed by a specific date? 36 Questions PERT & CPM Can Answer GSO-1100 5. Is the project on schedule, behind schedule, or ahead of schedule? 6. Is the money spent equal to, less than, or greater than the budget? 7. Are there enough resources available to finish the project on time? 8. If the project must be finished in a shorter time, what is the way to accomplish this at least cost? 37 Critical Path Method (CPM) GSO-1100 1. Determining the earliest start time for each activity (Forward pass) Earliest start time (ES) = maximum of the earliest finish times of immediate predecessors Earliest finish time (EF) = earliest start time + activity duration Earliest finish time for the project = maximum of the earliest finish times for the activities without successors 2. Determining the latest finish time for each activity (Backward pass) Latest finish time = minimum {latest start times of immediate successors}. Latest start time = latest finish time – activity duration 38 Critical Path Method (CPM) GSO-1100 Activity Format Figure 3.9 Activity Name or Symbol A Earliest Start ES EF Latest Start LS LF 2 Earliest Finish Latest Finish Activity Duration 39 Critical Path Method (CPM) GSO-1100 ES Project=10 (given) Representation : Forward pass Earliest start (ES) Earliest finish (EF) 10 20 A 15 25 35 Latest start (LS) Latest finish (LF) Backward pass Duration LF Project=35 (given) 40 Critical Path Method (CPM) GSO-1100 • Total slack : Amount of time that an activity can be delayed without delaying the project’s finish time = latest start time – earliest start time = LS - ES = latest finish time – earliest finish time = LF – EF Notes : 1. If an activity has no immediate predecessor, its earliest start time is the same as the project’s 2. If an activity has no immediate successor, its latest finish time is the same as the project’s 3. If the project’s earliest start time is not given, we set it to zero 4. If the project’s latest finish time is not given, we set it equal to its earliest finish time 41 Critical Activities and Critical Path GSO-1100 Critical Activities Activities with a slack of zero: its latest finish time is equal to its earliest finish time Critical Path The longest path, composed of critical activities It starts with an activity which has no immediate predecessor and ends with an activity which has no immediate successor Note that a project can have more than one critical path having the same length 42 Critical Path Method (CPM) – Example #1 2 A 1 B D E 3 F C 4 GSO-1100 5 G 6 H 7 Activity A B C D E F G H Duration 4 5 4 2 3 5 6 2 Calculate the critical path and each activity’s slack 43 Critical Path Method (CPM) - Example #1 Activity A B C D E F G H Duration 4 5 4 2 3 5 6 2 ES Project=0 2 A 1 B 3 GSO-1100 D 5 G 6 H 7 E F C 4 Total Activity Pred. Duration A 4 B 5 C 4 D A 2 E B 3 F C 5 G D, E 6 H F, G 2 ES EF LS LF Slack 44 Critical Path Method (CPM) - Example #1 Solution Activity A B C D E F G H Duration 4 5 4 2 3 5 6 2 Critical Activities =B,E,G,H 2 A 1 B 3 Critical Path =(B-E-G-H) GSO-1100 D 5 G 6 H 7 E F C 4 Total Activity Pred. Duration ES EF LS LF Slack A 4 0 4 2 6 2 B 5 0 5 0 5 0 C 4 0 4 5 9 5 D A 2 4 6 6 8 2 E B 3 5 8 5 8 0 F C 5 4 9 9 14 5 G D, E 6 8 14 8 14 0 H F, G 2 14 16 14 16 0 45 Critical Path Method (CPM) – Example 2 GSO-1100 4 W 3 1 T Z 6 F X U W Y 5 2 S R Earliest Activity I.P. T - U - W U X T,W Y U Z X,Y R U S R,X,Y Duration 7 4 4 5 6 8 4 Start Finish Slack Latest I.S. Start Finish Total X W,Y,R X S,Z S,Z S 6 46 Critical Path Method (CPM) – Example 2 GSO-1100 4 W 3 1 T Z 6 F X U W Y 5 2 S R Earliest Activity I.P. T - U - W U X T,W Y U Z X,Y R U S R,X,Y Duration 7 4 4 5 6 8 4 6 Slack Latest Start Finish I.S. Start Finish Total 0 7 X 1 8 1 0 4 W,Y,R 0 4 0 4 8 X 4 8 0 8 13 S,Z 8 13 0 4 10 S,Z 7 13 3 13 21 - 13 21 0 4 8 S 11 15 7 13 19 15 21 2 47 Variability in Activity Times GSO-1100 ► CPM assumes we know a fixed time estimate for each activity and there is no variability in activity times ► PERT uses a probability distribution for activity times to allow for variability 48 Program Evaluation and Review Technique (PERT) projects with uncertain time estimates… GSO-1100 • Hypotheses – For each activity, we can estimate : • An optimistic duration (a), • A pessimistic duration (b), • A most likely duration (m). – The duration of each activity follows a Beta distribution with : • mean (μT) = • variance a + 4m + b 6 b − a  2 =    6  2 – The duration of an activity is independent of the durations for the other activities 49 PERT Method: Example #3 1 W 3 4 F 2 GSO-1100 6 5 Duration Activity For activity T : μT = For activity T : σT2 = Opt (a) m Pess (b) T 5 7 12 U 3 4 5 W 1 4 7 X 3 5 7 Y 4 6 8 Z 5 8 14 R 3 4 7 S 4 6 11 F 0 0 0 50 Program Evaluation and Review Technique (PERT) projects with uncertain time estimates… GSO-1100 Project Duration The project’s duration follows a normal distribution with a : • mean equal to the sum of the mean time estimates for the activities on any of the critical paths. • variance equal to the maximum, among all of the critical paths, of the sum of the variances of the activities on the critical path. • to calculate the probability that the project’s duration will be less than or equal to a given time D, we calculate the standard deviation for Z : Z= D − mean duration s tan dard deviationof CP' s duration Table for normal dist. Probability Note: we divide by standard deviation to normalize 51 PERT Method: Example #3 cont’d GSO-1100 • Find the mean duration for each activity • Use the CPM method to find the critical paths Duration Activity Opt (a) m Pess (b) T 5 7 12 U 3 4 5 W 1 4 7 X 3 5 7 Y 4 6 8 Z 5 8 14 R 3 4 7 S 4 6 11 F 0 0 0 μ σ2 52 PERT Method: Example #3 Solution GSO-1100 Activity Duration ES EF I.S. LS LF Total slack 1.36 0 7.5 X 0.5 ...
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Final Answer

Attached.

Running head: MS PROJECT

1

MS Project
Student’s Name
University Affiliation

MS PROJECT

2
MS Project
Questions

1. What is more critical to Brent—cost or on-time completion?
The time of completion is essential to Brent
2. The network diagram is attached, showing critical paths, slack times, and project end dates.
3. Attached
4. Adding resources that are not familiar with technology or the system of operation that is
being constructed can create a negative influence on the project. Also, affecting activities
with less amount of lag time (non-critical activities) does not have a significant change in
the project completion date. However, changing the time required for a critical task leads
to a substantial move in the completion date.
5. The change in the completion dates due to resequencing the tasks is as shown in the
attachment.

Discussion
It is evident from the work schedule that either resequencing can reduce time length or
crashing the activities. Generally, affecting the changes in activities that are not critical to the
project do not affect a significant difference in the completion dates. In our project, when Mr.
Brent requested the contractor 1 to increase their production ...

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Purdue University

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