Lecture Note
Project Time and Cost Management, Part 2
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University:
California State University, Northridge -
Course:
SOM 466 | Project Management Academic year:
2014
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Views:
242
Pages:
25
Author:
boonepanicrtn
Project Time and Cost Management
Part 2
Lag time is a gap in time
Lead time is when activities can be overlapped
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Questions to consider:
◦ How difficult will it be to perform specific activities on this project?
◦ Is there anything unique in the project’s scope statement that will affect
resources?
◦ Are there specific resources better suited to perform the activities?
◦ What is the organization’s history in doing similar activities?
◦ Does the organization have appropriate people, equipment, and
materials available for performing the work?
◦ Does the organization need to acquire more resources to accomplish
the work?
27 VAPR RESOURCE REQUIREMENTS
Item Number
Item Name
Resources Source
Resource Requirements
Item Number
Item Name
Resources Source
Resource Requirements
1.1.1
Identify IHI Bundle Requirements
Internal staffing from Enterprise Data Analytics
The analyst assigned must be knowledgeable of best-practices,
standards, and measures as the IHI bundle will most likely be
defined in those terms. They must also be knowledgeable of the
current AHS clinical documentation workflows so that they can
identify the data elements in AHS terms.
1.3.2
Database Design
Internal staffing from Enterprise Data Warehouse team
This work package will require data architects to review the
database requirements and create the resulting database structure
to support eventual reporting requirements.
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Duration includes the actual amount of time spent working on an activity
plus elapsed time
◦ For example, even though it might take one workweek or five workdays to
do the actual work, the duration estimate might be two weeks to allow
extra time needed to obtain outside information or to allow for resource
availability
Effort is the number of workdays or work hours required to complete a task
◦ A duration estimate of one day could be based on eight hours of work or
eighty hours of work
Duration relates to the time estimate, not the effort estimate; the two are
related, so project team members must document their assumptions when
creating duration estimates and update the estimates as the project
progresses
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Duration estimates are often provided as discrete estimates, such as four
weeks
A range estimate might be between three and five weeks
A three-point estimate is an estimate that includes an optimistic, most
likely, and pessimistic estimate, such as three, four, and five weeks
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Program Evaluation and Review Technique (PERT) is a network analysis
technique used to estimate project duration when there is a high degree
of uncertainty about the individual activity duration estimates.
PERT weighted average =
optimistic time+4×most likely time+ pessimistic time
6
Example: PERT weighted average =
(1 workday+4×2 workdays+9 workdays)/6 = 3 workdays
Instead of using the most likely time of two workdays for this task, you’d
use three workdays with a PERT estimate
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Some people prefer using a Monte Carlo simulation over PERT because it
accounts for various probabilities
To perform a Monte Carlo simulation, in addition to the three-point
estimate, you also collect probabilistic information for each activity
duration estimate
◦ For example, estimators must provide a probability of each activity
being completed between the optimistic and most likely times
◦ You then run a computer simulation to find probability distributions for
the entire schedule being completed by certain times
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Jeff and his team decided to enter realistic discrete estimates for each
activity instead of using PERT or a Monte Carlo simulation
He stressed that people who would do the work should provide the
estimate, and they should have 75 percent confidence in meeting each
estimate
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Schedule development uses the results of all the preceding project time
management processes to determine the start and end dates of project
activities and of the entire project
The resulting project schedule is often shown on a Gantt chart, a standard
format for displaying project schedule information by listing project activities
and their corresponding start and finish dates in a calendar format
The ultimate goal of schedule development is to create a realistic project
schedule that provides a basis for monitoring project progress for the time
dimension of the project
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Critical path method (CPM)—also called critical path analysis—is a
network diagramming technique used to predict total project duration
A critical path for a project is the series of activities that determine the
earliest time by which the project can be completed. It is the longest path
through the network diagram and has the least amount of slack or float
◦ Slack or float is the amount of time an activity may be delayed without
delaying a succeeding activity or the project finish date
The longest path or the path containing the critical tasks is what is driving
the completion date for the project
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The critical path shows the shortest time in which a project can be
completed
If one or more of the activities on the critical path takes longer than
planned, the whole project schedule will slip unless the project manager
takes corrective action
For example: Apple Computer team members put a stuffed gorilla on top
of the cubicle of whoever was in charge of a critical task, so they would
not distract him or her
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The fact that its name includes the word “critical” does not mean that the
critical path includes all critical activities
Frank Addeman, executive project director at Walt Disney Imagineering,
explained in a keynote address at the May 2000 PMI-ISSIG Professional
Development Seminar that growing grass was on the critical path for
building Disney’s Animal Kingdom theme park
This 500-acre park required special grass for its animal inhabitants, and
some of the grass took years to grow
So, growing grass was driving the completion date of the theme park; not
what most people would think of as a critical activity
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It is important to know what the critical path is throughout the life of a
project so that the project manager can make trade-offs
If one of the tasks on the critical path is behind schedule, should the
schedule be renegotiated with stakeholders, or should more resources be
allocated to other items on the critical path to make up for that time?
It is also common for project stakeholders to want to shorten project
schedule estimates, so you need to know what tasks are on the critical
path
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Crashing is a technique for making cost and schedule trade-offs to obtain the
greatest amount of schedule compression for the least incremental cost
◦ If two critical tasks each take two weeks, and it will take $100 to shorten Task 1 by a week
and $1,000 to shorten Task 2 by a week, shorten Task 1
Fast tracking involves doing activities in parallel that you would normally do in
sequence
◦ Instead of waiting for Task 1 to be totally finished before starting Task 2, start Task 2 when
Task 1 is halfway done
De-scoping, is commonly used when project stakeholders have included ancillary
deliverables to the primary project objectives, and they can be removed to reduce
the project timeline.
Schedule compression often backfires by causing cost, human resource, and quality
problems, which lead to even longer schedules
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Critical chain scheduling is a method of scheduling that considers limited
resources when creating a project schedule and includes buffers to protect
the project completion date
It uses the Theory of Constraints (TOC), a management philosophy
developed by Eliyahu M. Goldratt and introduced in his book The Goal
It attempts to minimize multitasking, which occurs when a resource works
on more than one task at a time
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Project Time and Cost Management, Part 2
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