Chapter 7: Project Management

Chapter 7: Project Management

TRUE/FALSE

Projects are time-based endeavors that bring together skills and technology to accomplish goals.

ANS:T

Engineering change orders often appear to be major alterations in the product design but turn out to be minor instead.

ANS:F

Change management projects require planning, designing, building, testing, redesigning, and implementing the system.

ANS:T

Change management projects are unique work configurations that demand specific capabilities including leadership and teamwork.

ANS:T

PERT is the acronymic name for the shortest time-path from start to finish of the project.

ANS:F

PERT and CPM differ regarding the notion of a critical path.

ANS:F

Network representations often consist of arrows and nodes. The arrows connect the nodes while providing a sense of direction by means of the arrow heads.

ANS:T

For effective project design, more activities are better than few because that allows greater activity control.

ANS:T

PERT information systems show that team members are communicating with each other while monitoring progress.

ANS:F

When two or more arrows converge at a single node, choose the smallest value of EF among the converging arrows for the ES value of the next activity.

ANS:F

With really large and complex projects, the PERT calculations can be done by hand.

ANS:F

Slack (associated with an activity) describes the amount of time that can be treated as a safety buffer for slippage.

ANS:T

Activity time estimation in the PERT system utilizes an optimistic estimate, a pessimistic estimate, and a most likely estimate of time required to complete each project activity.

ANS:T

When the variance of a noncritical project path is larger than the variance along the critical path, it is possible that the noncritical path will become critical.

ANS:T

Resource leveling is an excellent example of fancy bells and whistles which should only be used when the fundamentals of the project’s design and analysis have been completed.

ANS:F

The fundamental idea of resource leveling is to switch extra resources from places where they are not essential to places where they could be used immediately.

ANS:T

Many projects move rapidly at the beginning while many ideas are being considered.

ANS:F

Resource leveling seeks to move people from understaffed activities to those that are overstaffed.

ANS:F

The existence of slack is an important condition for resource leveling.

ANS:T

The tactical aspect of resource leveling is that it can affect the entire system’s timing without changing the budgets.

ANS:T

Good resource allocation decisions are a P/OM project management responsibility.

ANS:T

Resource leveling provides the option to withdraw resources or to add new resources.

ANS:F

Normal time is associated with the minimum necessary spending on project activities because there is no great stress on completing the project as soon as possible.

ANS:T

Crash time is a minimum time estimate to accomplish an activity. Its cost is usually at or near the maximum expenditure level.

ANS:T

Crash time is associated with the minimum cost estimate and its time for accomplishment is based on the saying “haste makes waste,” and “walk, don’t run.”

ANS:F

Crashing is generally used to decrease the length of the critical path.

ANS:T

To spend sensibly to decrease the length of the critical path, as a rule of thumb, select first those activities that provide the largest decrease in project time for the least amount of investment.

ANS:T

Resource leveling cannot be used effectively to manage multiple projects.

ANS:F

A challenge faced by managers of multiple projects is the need to be juggling ideas and schedules.

ANS:T

For managers responsible for multiple projects, the sharing of information in an efficient way is an opportunity for synergy and serendipity, through coordination of their efforts.

ANS:T

Products have life cycle stages which means that the project environment is dynamic and challenging.

ANS:T

Companies that have the systems viewpoint lack the ability to achieve the level of cooperation necessary to win the race.

ANS:F

The kinds of problems encountered in projects are different from those encountered in the job shop and flow shop.

ANS:T

The project manager views activities with small amounts of slack as the activities that demand constant attention because slippage (especially when there is zero slack) results in project delay.

ANS:T

Management generally relies upon its ability to estimate before hard data are available.

ANS:T

MULTIPLE CHOICE

Which of the following are considered to be part of the five project life-cycle stages?

a. / describing the goals / d. / completing the project
b. / planning the project / e. / all of the above
c. / carrying out the project

ANS:E

Good project-management methods do which of the following?

a. / Keep track of what has been done.
b. / Point to activities critical for completion.
c. / Expedite activities that are slipping.
d. / all of the above

ANS:D

Which factors are important aspects of project management?

a. / There is insufficient ROI until project completion.
b. / Rapid completion is essential.
c. / Project managers must be guided by strategic planning.
d. / all of the above

ANS:D

Which are characteristics of good project managers?

a. / They are accustomed to risk and coping with uncertainties.
b. / Their goals are strategic and vitally important to top management and the success of the company.
c. / They inspire rapid systems wide cooperation to resolve their problems quickly.
d. / all of the above

ANS:D

Which is the most essential rule that applies to project management?

a. / Accurate time and cost estimates for all project activities are essential.
b. / Backup redundancy of activities should be increased.
c. / Expertise is not required to outline project activities and to sequence them correctly.
d. / Multiple project leaders are preferred.

ANS:A

The _____ path is the longest time-path from start to finish of the project and determines the completion date of the project.

a. / forward / c. / critical
b. / backward / d. / economic

ANS:C

Which of the following is the first step required to utilize PERT-type network models?

a. / Draw a precedence diagram.
b. / Estimate the time to perform each activity.
c. / Detail all of the activities.
d. / Meet with suppliers.

ANS:C

_____ enables the project managers to determine how long it will take to complete the project.

a. / Forward pass rule / c. / Slack
b. / Backward pass rule / d. / none of the above

ANS:A

The largest value of EF and LF at the last node in the network is the

a. / backward pass point of the project. / c. / time-length of the critical path.
b. / project completion time. / d. / all of the above

ANS:D

_____enables the critical path to be identified and permits the determination of slack.

a. / Forward pass rule / c. / Slack rule
b. / Backward pass rule / d. / none of the above

ANS:B

Which choice translates to allowable slippage in an activity’s schedule along a slack path?

a. / LS – ES > 0 / c. / Slack > 0
b. / LF – EF > 0 / d. / all of the above

ANS:D

Which choice is one of the three different methods for obtaining estimates?

a. / a person’s opinion derived from his or her experiences
b. / the pooling of a number of individuals’ opinions (derived from their experiences)
c. / several parameters of estimation requested from participants and combined
d. / all of the above

ANS:D

In general, the most important dimension for evaluating project success is _____.

a. / time for completion / c. / quality of the completed project
b. / total cost of the project / d. / all of the above

ANS:A

_____ is associated with the minimum necessary spending on project activities because there is no urgency to complete the project as soon as possible.

a. / Crash time / c. / Normal program
b. / Normal time / d. / Abnormal time

ANS:B

If you are going to crash one particular activity to get the most effect, which one should be chosen?

Δc/Δt = (crash cost – normal cost)/(normal time – crash time)

a. / Choose the activity where Δc/Δt is smallest
b. / Choose the activity where Δc/Δt is largest
c. / Choose the activity where Δc/Δt = 1
d. / Choose the activity where Δc/Δt = 0

ANS:A

Which of the choices below translates to identification of activities that fall along the critical path?

a. / LS – ES = 0 / c. / Slack = 0
b. / LF – EF = 0 / d. / all of the above

ANS:D

Project management requires good estimates of time to:

a. / manage the critical path. / c. / both a and b
b. / use slack resources properly. / d. / neither a nor b

ANS:C

Resource leveling:

a. / shifts costs among activities. / c. / does not reduce existing funds.
b. / does not add new funds. / d. / all of the above

ANS:D

Using cost/time tradeoffs permits a firm to _____.

a. / level resources
b. / plan for budget allocations across multiple projects
c. / set reasonable limits on how many projects can be handled at one time
d. / optimize the use of resources for one project

ANS:D

The earliest start for each beginning node is set to_____

a. / zero. / c. / 15.
b. / 100. / d. / 25.

ANS:A

Project quality is a _____ responsibility.

a. / design / c. / P/OM
b. / engineering / d. / all of the above

ANS:D

SHORT ANSWER

Define and discuss market research and its relationship to P/OM.

ANS:

Market research supplies valuable information essential for success in business. Market research is important to help process management improve existing products. Market research is customer data about what consumers of many demographic segments will buy at a particular price. It is part of a firm’s knowledge management data base. P/OM relies on market research data because it provides the fastest feedback about what is going wrong including what competitors are doing right.

How are projects defined?

ANS:

Projects are ubiquitous even though each one is different. That is what makes a project such a special work configuration. It is designed to accomplish singular or nearly singular goals such as putting on one play, writing new software, creating a mail-order catalog, and constructing a building. When projects are repeated, they become candidates for synthetic-type production work configurations.

How was PERT developed and what was its intended use?

ANS:

PERT was developed by the U.S. Navy Special Projects Office in conjunction with Booz Allen Hamilton for the Polaris submarine launched missile project. The cold war project was considered urgent by the government and time was a critical variable. There were about 100,000 activities divided amongst thousands of suppliers. PERT methodology set up activity networks, ideal for large projects, which could be systematically analyzed by computers.

Explain activities on nodes (AON) networks.

ANS:

Project networks consist of arrows and nodes. One form of network chart assigns activities to nodes. The arrows describe the order or precedence of the activities. For example activity C follows completion of activity A. This is called an activities-on-nodes (AON) network.

What is the forward pass rule?

ANS:

The forward pass rule for arrows converging at a node is: When two or more arrows converge at a single node, choose the largest value of EF among the converging arrows for the ES value of the next activity. All further accumulation proceeds with this larger number, because it is the earliest possible starting time for the next event in the network. It is, also, the earliest possible starting time for all successive events thereafter.

What is the backward pass rule?

ANS:

The backward pass rule for multiple arrows emanating from a single node is as follows: When two or more arrows meet at a single node, (going backwards in this network) choose the smallest value of LS among the converging arrows for the LF value of the preceding activity’s arrow. All further accumulation proceeds with this smaller number, which is the latest possible finishing time for the preceding activity without delaying the project.

What is the fundamental idea of resource leveling?

ANS:

The fundamental idea of resource leveling is to switch extra resources from places where they are not essential to places where they could be used immediately. The goal is to speed up laggards with resources that are either waiting to be used or which are completing some activities too quickly and out-of-sync with the rest of the project network. Resource leveling, in general, aims to balance resource assignments across activities over time.

PROBLEMS

The following activities and immediate predecessors define a new classroom building construction project on a growing college campus:

Activity / Immediate Predecessor / Time (Weeks)
A / - / 3
B / A / 5
C / A / 6
D / A / 3
E / B / 4
F / C / 7
G / D / 9
H / E,F,G / 1

Draw the network diagram.

Alternatively, create a table showing the ES, EF, LS, and LF for each activity. Calculate the early start time (ES), early finish time (EF), late start time (LS), late finish time (LF), and slack for each activity.

ANS:

ES, EF, LS, and LF for each activity are given below.

Activity / ES / EF / LS / LF
A / 0 / 3 / 0 / 3
B / 3 / 8 / 7 / 12
C / 3 / 9 / 3 / 9
D / 3 / 6 / 4 / 7
E / 8 / 12 / 12 / 16
F / 9 / 16 / 9 / 16
G / 6 / 15 / 7 / 16
H / 16 / 17 / 16 / 17

Starting with ES = 0 for the first activity the following relationships were used to calculate ES and EF for each activity.

EF of an activity = ES of the activity + completion time of the activity

For the forward pass rule:

ES of an activity = largest of the ES(s) of the preceding activities.

For example ES of B = 3 (EF of A). Similarly, ES of H = 16 (largest of 12, EF of E; 16, EF of F; and 15, EF of G).

LF of the last activity is set equal to its EF or 17. The following relationships were used to calculate LS and LF for the remaining activities.

LS of an activity = LF of the activity - Completion time of the activity.

For the backward pass rule:

LF of an activity = Smallest of the LS(s) of the following activities.

For example, LF of F = 16 (LS of H). Similarly, LF of A = 3 (smallest of 7, LS of B; 3, LS of C; and 4, LS of D).

Slack for each activity is defined as either LS - LF or ES - EF. Calculations are shown below:

Activity EF / ES / Slack = (LS - ES)
A / 0 / 0 / 0
B / 7 / 3 / 4
C / 3 / 3 / 0
D / 4 / 3 / 1
E / 12 / 8 / 4
F / 9 / 9 / 0
G / 7 / 6 / 1
H / 16 / 16 / 0

The following activities and immediate predecessors define a new classroom building construction project on a growing college campus:

Activity / Immediate Predecessor / Time (Weeks)
A / - / 3
B / A / 5
C / A / 6
D / A / 3
E / B / 4
F / C / 7
G / D / 9
H / E, F, G / 1

Identify the critical path. How long will it take to complete the project?

ANS:

Critical path is the path with zero slack and is, therefore, identified as A-C-F-H. Completion of the project will take 17 weeks.

The following table refers to a project to build a prototype for a gym and exercise facility.

Activity / Immediate Predecessor / Time (Weeks)
A / - / 3
B / A / 5
C / A / 7
D / B / 4
E / C / 3
F / D,E / 2

Draw a network and calculate ES, EF, LS, and LF for each activity.

Alternatively, create the table for ES, EF, LS, and LF. Calculate slack for each activity and identify the critical path.

ANS:

ES, EF, LS, and LF for each activity are given below.

ES / EF / LS / LF
A / 0 / 3 / 0 / 3
B / 3 / 8 / 4 / 9
C / 3 / 10 / 3 / 10
D / 8 / 12 / 9 / 13
E / 10 / 13 / 10 / 13
F / 13 / 15 / 13 / 15

A has 0 weeks of slack

B has 1 week of slack

C has 0 weeks of slack

D has 1 week of slack

E has 0 weeks of slack

F has 0 weeks of slack

Critical path consists of A, C, E, and F.

The following table refers to a project to build a new gym and exercise facility.

Activity / Immediate Predecessor / Time (Weeks)
A / - / 3
B / A / 5
C / A / 7
D / B / 4
E / C / 3
F / D,E / 2

How long will it take to complete the project?

ANS:

15 weeks.

H & W construction have been awarded a job to replace the vinyl and carpet throughout Mr. Bruce’s house. The team has prepared the following estimates. Below are the activities and times for installing a laminate floor.

Label / Description / Time Estimate / Preceding Activity
A / Remove trim and baseboard / 3 hours / -
B / Remove tack track strips / 4 hours / -
C / Remove old vinyl / 3 hours / A
D / Remove old carpeting / 1 hour / B
E / Remove glue residue / 6 hours / C
F / Cut all door facings by 1/4" / 3 hours / E,D
G / Remove doors / 1 hour / F
H / Install moisture-proof underlay material / 2 hours / F
I / Install Laminate Flooring / 24 hours / G, H
J / Install new baseboards and trim / 7 hours / I
K / Replace doors / 1 hour / I
L / Clean floor / 1 hour / J,K

Construct the appropriate network diagram and label the ES, EF, LS, and LF times.

Alternatively, create the table of ES, EF, LS, and LF.

What is the critical path? How many hours are in the critical path? Mrs. Bruce needs this time estimate to plan an upcoming party. Mrs. Bruce is hosting a house and garden party for her daughter, Daisy, and is anxious for the team to complete the project. H & W Construction will be paid an extra $15 per hour for early completion (any time less than the critical path). Tasks B, I, and J can be shortened. B by 2 hours; I and J by 5 hours; each reduction will cost $12 per hour. Which if any of the three tasks will you shorten?

ANS:

Activity / ES / EF / LS / LF / Activity / ES / EF / LS / LF
A / 0 / 3 / 0 / 3 / G / 15 / 16 / 16 / 17
B / 0 / 4 / 7 / 11 / H / 15 / 17 / 15 / 17
C / 3 / 6 / 3 / 6 / I / 17 / 41 / 17 / 41
D / 4 / 5 / 11 / 12 / J / 41 / 48 / 41 / 48
E / 6 / 12 / 6 / 12 / K / 41 / 42 / 47 / 48
F / 12 / 15 / 12 / 15 / L / 48 / 49 / 48 / 49

The critical path = A, C, E, F, H, I, J, L

The critical path requires 49 Hours: (3 + 3 + 6 + 3 + 2 + 24 + 7 + 1)

Remember to add all the separate activity times along the critical path.

Shorten tasks I and J since they are both on the critical path.

The change will gain 10 hours (i.e., 2 x 5). The new critical path will require 39 hours.

The cost to do this is $12 x 10 hours = $120. Leslie and Welch will make an extra $15 per hour. Therefore they will have an extra $150 to share. The total extra cost to the Bruce family will be $270 which Mr. Bruce will gladly pay.

Do not shorten activity B. It is not on the critical path and already has seven hours slack time. Remember to only crash or shorten activities on the critical path.

Note: The z value in the following problems can be found from the table in the appendix or by using the Excel function.

Suppose the length of critical path in a project is 38 days. The critical path consists of four activities whose variances are 1.5, 1.2, 1.0 and 0.3. What is the probability of completing the project within 41 days?

ANS: 0.9332

Find the variance of the critical path, V = 1.5 + 1.2 + 1.0 + 0.3 = 4.0

Standard Deviation of the critical path = σ = = 2.0