Marketing (UNR471)

Dr. Mohamed Sameh

Project Time Management
 What is a project?
A unique event with specific objectives.
Has multiple activities (A network of tasks).
Has defined relationships
Has a specific completion time.
Project
Examples:
Time
A social event (party, wedding).
Managem
ent An engineering event (construction,
factory).
A strategic event (political campaign,
war).
 Project Time Management
Project Life Cycle:
Conception: Identifying the requirements.
Feasibility analysis or study: Analyzing costs, benefits, and
risks
Planning: Determining what to do, who will do it , how long?
Execution: Performing the tasks.
Termination: Ending the project.
 Project Time Management
Importance:
 Delivering projects on time is one of the biggest challenges to managers.
 CHAOS report (Comprehensive Human Appraisal for Originating Software) by STANDISH
group reported an average project time overrun of 222% and cost over run of 189% in 1994.
 After the wide spread of project time management techniques, the average time overrun was
improved to 63% in 2001 report.
 Time is the commodity with the least amount of flexibility.
 Scheduling issues are the main reason for conflicts on projects, especially during the second
half of projects.
 Project managers (engineers) use PM information to monitor activity progress both on and
off critical path to manage resource requirements.
 Accounting uses project management (PM) information to provide a timeline for major
expenditures.
 Marketing use PM information to monitor the progress to provide updates to the customer.
 Project Time Management
Processes:
Activity definition.
Activity sequencing.
Activity duration estimation.
Schedule development.
Schedule control.
 Project Time Management
Building a Project Network Diagram (AOA/AON):
Activity on Arrow (AOA) Activity on Node (AON)

A
1 2 A B
3 days

Arrows represent activities, tasks or subprojects that use time or

Arrows represent precedence and dependencies between activities.
resources.

A node (an event), marks the start and completion of an activity,

Nodes represent activities
and contains a number that helps to identify its location

Network is more compact and clearer. Network is more complex and require maintenance and analysis.

"Dummy" activities have to be added to show more complex

No need for "Dummy" activities
relationships and dependencies

Not supported by all PM software. Supported by all PM software.

Better suited for small projects planning Better suited for large projects planning
 Project Time Management
Building a Project Network Diagram (AOA/AON):
 Project Time Management
Network Planning Techniques:
Critical Path Method (CPM):
Developed to coordinate maintenance in the chemical industry (1957).
Uses two-time approach, a normal time and a crash time, for each activity.
A deterministic technique: aims to find the exact date of completing the entire project.
Results are more specific (tasks duration is determined).
Program Evaluation & Review Technique (PERT):
Developed to manage the Polaris missile project (Us navy-1958).
Three times for each activity (optimistic, pessimistic and most likely times) are
combined.
A probabilistic technique: aims to find the probability of the entire project being
completed by a given date.
Results are less specific (tasks duration is probabilistic).
 Project Time Management
PERT/CPM:
 Are used to plan the schedules of a project individual activities.
 Can graphically display the precedence relationships & sequence of activities.
 Can determine the earliest/latest start and finish for each activity, and the entire project
completion time.
 Identify critical activities that cannot be delayed without delaying the project.
 Estimate the amount of slack time for non-critical activities
 Can determine at a given date, if the project is on schedule, behind schedule, or a head of the
schedule.
 Can determine at a given date, if the money spent is equal to, less than, or greater than the
budget.
 Can determine if there are enough resources to finish the project on time.
 Can determine the best way to finish the project in a shorter time (if possible) , with the least
cost? (crash analysis).
 Project Time Management
Example: ELSEWEDY ELECTRIC is bringing a new cable to the market . The planning engineer has
identified 11 activities necessary for the production process. Develop an AON for the project.

Immediate Duration
Activity Description
Predecessor (weeks)
A Develop cable specifications None 4
B Design manufacturing process A 6
C Source & purchase materials A 3
D Source & purchase tooling & equipment B 6
E Receive & install tooling & equipment D 14
F Receive materials C 5
G Pilot production run E&F 2
H Evaluate product design G 2
I Evaluate process performance G 3
J Write documentation report H&I 4
K Transition to manufacturing J 2
 Project Time Management
CPM

B D E H
(6) (6) (14) (2)
A G J K
(4) (2) (4) (2)
C F I
(3) (5) (3)
 Project Time Management
CPM

Paths Path duration (W)

ABDEGHJK 40
ABDEGIJK 41
ACFGHJK 22
ACFGIJK 23

 The longest path is (ABDEGIJK).

 The project cannot finish in less time than its longest path.
Then, ABDEGIJK is the project’s critical path
 Project Time Management
• Early Start (ES) and Early Finish (EF) = the earliest an activity can start or finish.
• Early Start (ES) of an activity = Early Finish of the preceding activity.
• Early Finish (EF) = Early Start + Activity time.
• Late Start (LS) and Late Finish (LF) = the latest an activity can start or finish (LF)
without delaying the project completion.
• Late Finish (LF) of an activity = Late Start of the next activity.

• Late Start (LS) = Late Finish - Activity time.

• Slack defines how long activities can be delayed without delaying the project.
• Slack = an activity’s Late Finish - Early Finish (or Late Start - Early Start).
• All activities on the critical path (Critical activities) have zero slack.
 Project Time Management
ES = 32
CPM EF = 34
LF = 35
ES = 0 ES = 4 ES = 10 ES = 16 LS = 33
EF = 4 EF = 10 EF = 16 EF = 30 S = 1
LS = 0 B D E ES = 30 H
LF = 4 (6) (6) (14) EF = 32 (2)
A G J K
(4) (2) (4) (2)
C F I ES = 35 ES = 39
(3) (5) (3) EF = 39 EF = 41
ES = 4 ES = 7 ES = 32
EF = 7 EF = 12 EF = 35
LF = 25 LF = 30
LS = 22 LS = 25
S = 18 S = 18
 Project Time Management
PERT
Optimistic Most likely Pessimistic
Activity Description
time time time
A Develop cable specifications 2 4 6
B Design manufacturing process 3 7 10
C Source & purchase materials 2 3 5
D Source & purchase tooling & equipment 4 7 9
E Receive & install tooling & equipment 12 16 20
F Receive materials 2 5 8
G Pilot production run 2 2 2
H Evaluate product design 2 3 4
I Evaluate process performance 2 3 5
J Write documentation report 2 4 6
K Transition to manufacturing 2 2 2
 Project Time Management
PERT

 A typical beta distribution is shown below, note that it has definite end points
 The expected time for finishing each activity is a weighted average
 Project Time Management
optimistic + 4 most likely + pessimisti𝑐𝑐
Exp. time =
6
Optimistic Most likely Pessimistic Expected
Activity
time time time time
A 2 4 6 4
B 3 7 10 6.83
C 2 3 5 3.17
D 4 7 9 6.83
E 12 16 20 16
F 2 5 8 5
G 2 2 2 2
H 2 3 4 3
I 2 3 5 3.17
J 2 4 6 4
K 2 2 2 2
 Project Time Management
PERT

B D E
(6.83) (6.83) (16) H (3)
K
A (4) G (2) J (4)
(2)
C F I
(3.17) (5) (3.17)
 Project Time Management
PERT
Estimated Path Durations:

Activities on paths Expected duration

ABDEGHJK 44.66
ABDEGIJK 44.83
ACFGHJK 23.17
ACFGIJK 23.34

ABDEGIJK is the expected critical path & the project has an

expected duration of 44.83 weeks.
PERT
Project Time Management
ES = 35.66
EF = 38.66
ES = 4 ES = 10.83 ES = 17.66 LF = 38.83
ES = 0 EF = 10.83 EF = 17.66 EF = 33.66 LS = 35.83
EF = 4 S = 0.17
LS = 0 ES = 33.66 ES = 38.83 ES = 42.83
B D E EF = 35.66 EF = 42.83 EF = 44.83
LF = 4 (6.83) (6.83) (16) H (3)
K
A (4) G (2) J (4)
(2)
C F I
(3.17) (5) (3.17)

ES = 4 ES = 7.17 ES = 35.66
EF = 7.17 EF = 12.17 EF = 38.83
LF = 28.66 LF = 33.66
LS = 25.49 LS = 28.66
S = 21.49 S = 21.49
 Project Time Management
Gantt Chart at the Earliest Possible Start Dates
 Project Time Management
Gantt Chart at the Latest Possible Start Dates
 Project Time Management
Estimating the Probability of Completion Dates

 Using probabilistic time estimates offers the advantage of predicting the probability of
project completion dates.
 We have already calculated the expected time for each activity by making three-time
estimates. p−o
σ =
2

2

 6 
 Now we need to calculate the variance for each activity.
 The variance of the beta probability distribution is:
 where: p=pessimistic activity time estimate
o=optimistic activity time estimate
 Project Time Management
Project Activity Variance
Activity Optimistic Most Likely Pessimistic Variance
A 2 4 6 0.44
B 3 7 10 1.36
C 2 3 5 0.25
D 4 7 9 0.69
E 12 16 20 1.78
F 2 5 8 1.00
G 2 2 2 0.00
H 2 3 4 0.11
I 2 3 5 0.25
J 2 4 6 0.44
K 2 2 2 0.00
 Project Time Management
ΣVariances of Each Path

Path Activities on Path Variance

Number Path (weeks)
1 A,B,D,E,G,H,J,k 4.82

2 A,B,D,E,G,I,J,K 4.96

3 A,C,F,G,H,J,K 2.24

4 A,C,F,G,I,J,K 2.38
 Project Time Management
Calculating the Probability of Completing the Project in Less Than a Specified Time
 When you know:
The expected completion time.
Its variance.
 You can calculate the probability of completing the project in “X” weeks
with the following formula:
specified time − path expected time  DT − EFP 
z= =  
path standard time  σP 2


𝛔𝛔𝟐𝟐 = variance of path

Where DT = the specified completion date,
EFPath = the expected completion time of the path
 Project Time Management
Example: Calculating the probability of finishing the project in 48 weeks

 Use the z values in probability Appendix to determine probabilities

 48 weeks − 44.66 weeks 
 e.g. probability for path 1 is z =   = 1.52
 4.82 

Path Activities on Path Path Variance z-value Probability of

Number (weeks) Completion

1 A,B,D,E,G,H,J,k 4.82 1.5216 0.9357

2 A,B,D,E,G,I,J,K 4.96 1.4215 0.9222
3 A,C,F,G,H,J,K 2.24 16.5898 1.000
4 A,C,F,G,I,J,K 2.38 15.9847 1.000
 Project Time Management
Example: Calculating the probability of finishing the project in 48 weeks
 Project Time Management
Reducing Project Completion Time

Project completion times may need to be shortened

because:
Different deadlines
Penalty clauses
Need to put resources on a new project
Promised completion dates
Reduced project completion time is “crashing”.
 Project Time Management
Reducing Project Completion Time
 Crashing a project needs to balance
Shorten a project duration
Cost to shorten the project duration
 Crashing a project requires you to know
Crash time of each activity
Crash cost of each activity
Crash cost/duration = (crash cost-normal cost)/(normal time – crash
time)
 Project Time Management
Reducing Project Completion Time
Activity Normal Normal Crash Crash Max. weeks Reduce cost
Time (wk) Cost ($) Time Cost ($) of reduction per week
A 4 8,000 3 11,000 1 3,000
B 6 30,000 5 35,000 1 5,000
C 3 6,000 3 6,000 0 0
D 6 24,000 4 28,000 2 2,000
E 14 60,000 12 72,000 2 6,000
F 5 5,000 4 6,500 1 1500
G 2 6,000 2 6,000 0 0
H 2 4,000 2 4,000 0 0
I 3 4,000 2 5,000 1 1,000
J 4 4,000 2 6,400 2 1,200
K 2 5,000 2 5,000 0 0
 Project Time Management
Crashing Example: Suppose the Elsewedy project manager wants to
reduce the new product project from 41 to 36 weeks.
 Crashing Costs are considered to be linear.
 Look to crash activities on the critical path.
 Crash the least expensive activities on the critical path first (based
on cost per week).
 Crash activity I from 3 weeks to 2 weeks $1000
 Crash activity J from 4 weeks to 2 weeks $2400
 Crash activity D from 6 weeks to 4 weeks $4000
 Recommend Crash Cost $7400

 Question: Will crashing 5 weeks return more in benefits than it

costs?
 Project Time Management
CPM
ES = 0 ES = 4 ES = 10 ES = 14 ES = 30
EF = 4 EF = 10 EF = 14 EF = 28 EF = 32
LS = 0 B D E ES = 28 H
LF = 4 (6) (4) (14) EF = 30 (2)
A G J K
(4) (2) (2) (2)
C F I ES = 32 ES = 34
(3) (5) (2) EF = 34 EF = 36
ES = 4 ES = 7 ES = 30
EF = 7 EF = 12 EF = 32
LF = 23 LF = 28
LS = 20 LS = 23
S = 16 S = 16