CH-6 Developing a project plan – Project Management: The Managerial Process : Book Guide

Chapter 6 Developing a Project Plan Chapter Outline 1. Developing the Project Network 2. From Work Package to Network 3. Constructing a Project Network A. Terminology B. Basic Rules to Follow in Developing Project Networks 4. Activity-on-Node (AON) Fundamentals 5. Network Computation Process A. Forward Pass—Earliest Times B. Backward Pass—Latest Times C. Determining Slack (or Float) i. Total Slack ii. Free Slack (Float) D. Free Slack (Float) 6. Using the Forward and Backward Pass Information 7. Level of Detail for Activities 8. Practical Considerations A. Network Logic Errors B. Activity Numbering C. Use of Computer to Develop Networks D. Calendar Dates E. Multiple Starts and Multiple Projects 9. Extended Network Techniques to Come Closer to Reality A. Laddering B. Use of Lags to Reduce Schedule Detail and Project Duration i. Finish-to-Start Relationship ii. Start-to-Start Relationship iii. Finish-to-Finish Relationship iv. Start-to-Finish Relationship v. Combinations of Lag Relationships C. An Example Using Lag Relationships—The Forward and Backward Pass D. Hammock Activities 10. Summary 11. Key Terms 12. Review Questions 13. Exercises 14. Case 6.1: Advantage Energy Technology Data Center Migration 15. Case 6.2: Shoreline Stadium Case Chapter Learning Objectives After reading this chapter you should be able to: LO 6-1 Understand the linkage between WBS and the project network. LO 6-2 Diagram a project network using AON methods. LO 6-3 Calculate early, late, and slack activity times. LO 6-4 Identify and understand the importance of managing the critical path. LO 6-5 Distinguish free slack from total slack. LO 6-6 Demonstrate understanding and application of lags in compressing projects or constraining the start or finish of an activity. Review Questions 1. How does the WBS differ from the project network? The WBS is hierarchical while the project network is sequential. The network provides a project schedule by identifying sequential dependencies and timing of project activities. The network sets all project work, resource needs, and budgets into a sequential time frame; the WBS does not provide this information. The WBS is used to identify each project deliverable and the organization unit responsible for its accomplishment within budget and within a time duration. The WBS provides a framework for tracking costs to deliverables and organization units responsible. 2. How are WBS and project networks linked? The network uses the time estimates found in the work packages of the WBS to develop the network. Remember, the time estimates, budgets, and resources required for a work package in the WBS are set in time frames, but without dates. The dates are computed after the network is developed. 3. Why bother creating a WBS? Why not go straight to a project network and forget the WBS? The WBS is designed to provide different information for decision making. For example, this database provides information for the following types of decisions: Link deliverables, organization units, and customer Provide for control Isolate problems to source Track schedule and cost variance. Network does not. Assign responsibility and budgets Focus attention on deliverables Provide information for different levels in the organization. 4. Why is slack important to the project manager? Slack is important to the project manager because it represents the degree of flexibility the project manager will have in rearranging work and resources. A project network with several near critical paths and hence, little slack, gives the project manager little flexibility in changing resources or rearranging work. 5. What is the difference between free slack and total slack? Free slack usually occurs at the end of an activity chain—before a merge activity. It is the amount of time the activity can be delayed without affecting the early start of the activity immediately following it. Since free slack can be delayed without delaying following activities, it gives some resource flexibility to the project manager. Total slack is the amount of time an activity can be delayed before it becomes critical. Use of total slack prevents its use on a following activity. 6. Why are lags used in developing project networks? Two major reasons: To closer represent real situations found in projects. To allow work to be accomplished in parallel when the finish-to-start relationship is too restrictive. 7. What is a hammock activity, and when is it used? A hammock activity is a special purpose activity that exists over a segment of the life of the project. A hammock activity typically uses resources and is handled as an overhead cost—e.g., inspection. Hammock activities are used to identify overhead resources or costs tied directly to the project. The hammock duration is determined by the beginning of the first of a string of activities and the ending of the last activity in the string. Hammock activities are also used to aggregate sections of projects to avoid project detail—e.g., covering a whole subnetwork within a project. This approach gives top management an overview of the project by avoiding detail. Exercises 1. Here is a partial work breakdown structure for a wedding. Use the method described in the Snapshot from Practice 6.2: The Yellow Sticky Approach to create a network for this project. Note: Do not include summary tasks in the network (i.e., 1.3, Ceremony, is a summary task; 1.2, Marriage license, is not a summary task). Do not consider who would be doing the task in building the network. For example, do not arrange “hiring a band” to occur after “florist” because the same person is responsible for doing both tasks. Focus only on technical dependencies between tasks. Hint: Start with the last activity (wedding reception), and work your way back to the start of the project. Build the logical sequence of tasks by asking the following question: In order to have or do this, what must be accomplished immediately before this? Once completed, check forward in time by asking this question: Is this task(s) the only thing that is needed immediately before the start of the next task? (Work Breakdown Structure Not Shown) 2. Draw a project network from the following information. What activity(s) is a burst activity? What activity(s) is a merge activity? Activity B is a burst activity and activity E is a merge activity. 3. Draw a project network from the following information. What activity(s) is a burst activity? What activity(s) is a merge activity? Activity C is a burst activity. Activity G is a merge activity. 4. Draw a project network from the following information. What activity(s) is a burst activity? What activity(s) is a merge activity? Activity A is a burst activity. Activities D and H are merge activities. 5. Draw a project network from the following information. What activity(s) is a burst activity? What activity(s) is a merge activity? Activity A is a burst activity. Activities F, G, and H are merge activities. 6. From the following information, develop an AON project network. Complete the forward and backward pass, compute activity slack, and identify the critical path. How many days will the project take? The project will take 14 days. 7. The project information for the custom order project of the Air Control Company is presented here. Draw a project network for this project. Compute the early and late activity times and the slack times. Identify the critical path. The early and late activity times and the slack times are shown on the diagram above. The critical path is A-D-F-G-H. The project takes 45 days to complete. 8. You have signed a contract to build a garage for the Simpsons. You will receive a $500 bonus for completing the project within 7 working days. The contract also contains a penalty clause in which you will lose $100 for each day the project takes longer than 7 working days. Draw a project network given the information below. Complete the forward and backward pass, compute the activity slack, and identify the critical path. Do you expect to receive a bonus or a penalty on this project? Early start, late start, early finish, late finish, and slack are shown on the diagram above. The completion time is 18 days so there will be a three-day penalty. 9. You are creating a customer database for the Hillsboro Hops minor league baseball team. Draw a project network given the information below. Complete the forward and backward pass, compute activity slack, and identify the critical path. How long will this project take? How sensitive is the network schedule? Calculate the free slack and total slack for all noncritical activities. Early start, late start, early finish, late finish, and slack are shown on the diagram above. The project is expected to take 10 days. The project is very sensitive with three interrelated critical paths. None of the activities have slack. 10. K. Nelson project manager of Print Software, Inc., wants you to prepare a project network; compute the early, late, and slack activity times; determine the planned project duration; and identify the critical path. His assistant has collected the following information for the Color Printer Drivers Software Project: Early start, late start, early finish, late finish, and slack are shown on the diagram above. The completion time is 105 days. The critical path is A-D-G-I-J-K-L. 11. A large southeast city is requesting federal funding for a park-and-ride project. One of the requirements in the request application is a network plan for the design phase of the project. Sophie Kim, the chief engineer, wants you to develop a project network plan to meet this requirement. She has gathered the activity time estimates and their dependencies shown here. Show your project network with the activity early, late, and slack times. Mark the critical path. Early start, late start, early finish, late finish, and slack are shown on the diagram above. The completion time is 150 days. The critical path is A-C-E-G-J. 12. You are creating a customer database for the Lehigh Valley IronPigs minor league baseball team. Draw a project network given the information below. Complete the forward and backward pass, compute activity slack, and identify the critical path. How long will this project take? How sensitive is the network schedule? Calculate the free slack and total slack for all noncritical activities. Early start, late start, early finish, late finish, and slack are shown on the diagram above. The project is expected to take 18 days. The project is not very sensitive with one dominant critical path, A-C-F-I-K-L. Activities B, E, and H and J share 8 days of slack while activities D, G, and J share 7 days of slack. 13. You are completing a group term paper. Given the project network that follows, complete the forward and backward pass, compute activity slack, and identify the critical path. Use this information to create a Gantt chart for the project. Be sure to show slack for noncritical activities. Early start, late start, early finish, late finish, and slack are shown on the diagram above. The Gantt chart is shown below. 1 2 3 4 5 6 7 8 9 10 11 12 13 Identify topic Research topic Draft paper Edit paper Create graphics Reference Proof Final draft The completion time is 13 days. The critical path is A-B-C-D-G-H. 14. You are managing a product upgrade project for Bangkok Gogo. Given the project network that follows, complete the forward and backward pass, compute activity slack, and identify the critical path. Use this information to create a Gantt chart for the project. Be sure to show slack for noncritical activities. Early start, late start, early finish, late finish, and slack are shown on the diagram above. The critical path is A-B-D-E-G-J. The non-critical activities are C, F, H, and I. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Form project team Interview users Survey users Identify new features Acquire materials Develop Mrkt campaign Produce prototype Design graphics Conduct marketing Perform sales calls 15. You are creating a database for the Oklahoma City Thunder NBA Basketball team. Given the project network that follows, complete the forward and backward pass, compute activity slack, and identify the critical path. Use this information to create a Gantt chart for the project. Early start, late start, early finish, late finish, and slack are shown on the diagram above. The critical path is A-B-D-G-H-I. Computer Exercises All of the Microsoft Project files are available through McGraw-Hill Connect. 16. The planning department of an electronics firm has set up the activities for developing and production of a new phone. Given the information below, develop a project network using Microsoft Project. Assume a five-day workweek and the project starts on January 4, 2017. Activity ID Description Activity Predecessor Activity Time (weeks) 1 Staff None 2 2 Develop market program 1 3 3 Select channels of distribution 1 8 4 Patent 1 12 5 Pilot production 1 4 6 Test market 5 4 7 Ad promotion 2 4 8 Set up for production 4,6 16 Teaching note: it is not uncommon for students to get confused because the activity ID’s are presented as numbers and not letters. Nevertheless, it is a good to get used to this since Microsoft Project uses numbers when entering predecessors. The estimated completion date is 150 days or 30 weeks, which is well ahead of the 45 week deadline. 17. Using Microsoft Project, set up the network and determine the critical path for Stage 1 of the Whistler Ski Resort Project described below. The project workweek will be 5 days (M-F).Whistler Ski Resort Project Given the coming 2010 Winter Olympics in Vancouver and Whistler, BC. Canada, and the fact that the number of skiing visitors to Whistler has been increasing at an exciting rate. the Whistler Ski Association has been considering construction of another ski lodge and ski complex. The results of an economic feasibility study just completed by members of the staff show that a winter resort complex near the base of Whistler Mountain could be a very profitable venture. The area is accessible by car, bus, train, and air. The board of directors has voted to build the ten-million dollar complex recommended in the study. Unfortunately, due to the short summer season, the complex will have to be built in stages. The first stage (year 1) will contain a day lodge, chair lift, rope tow, generator house (for electricity), and a parking lot designed to accommodate 400 cars and 30 buses. The second and third stages will include a hotel, ice rink, pool. shops, two additional chair lifts, and other attractions. The board has decided that stage one should begin no later than April 1 and be completed by October 1. in time for the next skiing season. You have been assigned the task of project manager, and it is your job to coordinate the ordering of materials and construction activities to ensure the project's completion by the required date. After looking into the possible sources of materials, you are confronted with the following time estimates. Materials for the chair lift and rope tow will take 30 days and 12 days, respectively, to arrive once the order is submitted. Lumber for the day lodge, generator hut, and foundations will take 9 days to arrive. The electrical and plumbing materials for the day lodge will take 12 days to arrive. The generator will take 12 days to arrive. Before actual construction can begin on the various facilities, a road to the site must be built; this will take 6 days. As soon as the road is in, clearing can begin concurrently on the sites of the day lodge, generator house, chair lift, and rope tow. It is estimated that the clearing task at each site will take 6 days, 3 days, 36 days, and 6 days, respectively, The clearing of the main ski slopes can begin after the area for the chair lift has been cleared; this will take 84 days. The foundation for the day lodge will take 12 days to complete. Construction of the main framework will take an additional 18 days. After the framework is completed, electrical wiring and plumbing can be installed concurrently. These should take 24 and 30 days. respectively. Finally, the finishing construction on the day lodge can begin; this will take 36 days. Installation of the chair lift towers (67 days) can begin once the site is cleared, lumber delivered, and the foundation completed (6 days). Also, when the chair lift site has been cleared. construction of a permanent road to the upper towers can be started; this will take 24 days, While the towers are being installed, the electric motor to drive the chair lift can be installed; the motor can be installed in 24 days. Once the towers are completed and the motor installed, it will take 3 days to install the cable and an additional 12 days to install the chairs. Installation of the towers for the rope tow can begin once the site is cleared and the foundation is built and poured; it takes 4 days to build the foundation, pour the concrete and let it cure, and 20 days to install the towers for the rope tow. While the towers are being erected, installation of the electric motor to drive the ope tow can begin; this activity will Page I of 2 EGN 3103 Project Management take 24 days. After the towers and motor are installed, the rope tow can be strung in 1 day. The parking lot can be cleared once the rope tow is finished; this task will take 18 days. The foundation for the generator house can begin at the same time as the foundation for the lodge; this will take 6 days. The main framework for the generator house can begin once the foundation is completed; framing will take 12 days. Assignment: 1. Identify the critical path on your network. 2. Can the project be completed by October 1? The schedules is shown below: The critical path for this schedule is: Build road to site  Clear chair lift  Construct chair lift foundation  Install chair lift towers  Install chair lift cable  Install chairs. You can note that those activities are underlined in the table above and shown in red on the Gantt chart. If the project is started on April 3, 2017 (April 1 is a Saturday), then it is completed on Friday, September 29, 2017. That is 130 days or 26 weeks. Hint: When assigning this exercise you should remind students to use an April 3, 2017 start date. 18. The optical disk project team has started gathering the information necessary to develop the project network—predecessor activities and activity times in weeks. The results of their meeting are found in the following table. The Microsoft Project data entry is shown below. The start date is set to January 2, 2017 since January 1 is a Sunday. The estimated completion time is 44 weeks, so yes, the project can be completed in 45 weeks if everything goes as planned. A network for the optical disk project is presented below detailing the critical path. Below is the same network as generated by Microsoft Project. Teaching Note: Prior to assigning this exercise you should announce to the students that they should assume that the project workweek will be 5 days (Monday - Friday) and that the project is scheduled to start January 2, 2017. Lag Exercises 19. From the following information, compute the early, late, and slack times for each activity. Identify the critical path. The critical path is A-C-E-F. 20. Given the following information, compute the early, late, and slack times for the project network. Which activities on the critical path have only the start or finish of the activity on the critical path? The critical path is A-B-D-E-F-G-H-I. 21. Given the information in the following lag exercises, compute the early, late, and slack times for the project network. Which activities on the critical path have only the start or finish of the activity on the critical path? The critical path is A-B (finish only)-C-D-F. 22. Given the network below, compute the early, late, and slack time for each activity. Clearly identify the critical path. The critical path is A-D-E-F-G. 23. The Cyclon project team has started gathering information necessary to develop a project network—predecessor activities and activity time in days. The results of their meeting are found in the following table: Part A. Create a network based on the above information. How long will the project take? What is the critical path? The project is scheduled to take 80 days. The critical path consists of activities: 2, 3, 5, 6, 7, 8, 10, 11, 12, 13. CyClon Project Entry Table and Gantt Chart Part A is shown below: Part B. Upon further review the team recognizes that they missed three finish-to-start lags. Procure prototype parts will involve only 2 days of work but it will take 8 days for the parts to be delivered. Likewise, Order stock components will take 2 days of work and 8 days for delivery and Order custom components 2 days of work and 13 days for delivery. Reconfigure the CyClon schedule by entering the three finish-to-start lags. What impact did these lags have on the original schedule? On the amount of work required to complete the project? The schedule still takes 80 days to complete and there is no change in the critical path. However instead of taking 98 days of work to complete, the project will only take 69 days of work! We obtain 69 days by totaling the number of days for each lag. CyClon Project Entry Table and Gantt Chart Part B is shown below: Part C. Management is not happy with the schedule and wants the project completed as soon as possible. Unfortunately, they are not willing to approve additional resources. One team member pointed out that the network contained only finish-to-start relationships and that it might be possible to reduce project duration by creating start-to-start lags. After much deliberation the team concluded that the following relationships could be converted into start-to-start lags: Procure prototype parts could start 6 days after the start of Design. Fabricate parts could start 9 days after the start of Design. Laboratory test could begin 1 day after the start of Assemble prototype. Field test could start 5 days after the start of Laboratory test. Adjust design could begin 7 days after the start of Field test. Order stock and Order custom components could begin 5 days after Adjust design. Test unit could begin 9 days after the start of Assemble test production unit. Document results could start 3 days after the start of Test unit. Reconfigure the CyClon schedule by entering all nine start-to-start lags. What impact did these lags have on the original schedule (Part A)? How long will the project take? Is there a change in the critical path? Is there a change in the sensitivity of the network? Why would management like this solution? CyClon Project Entry Table and Gantt Chart Part C is shown below. The project duration has been reduced 15 days as a result of introducing the start-to-start lags. The project is now estimated to be completed in 65 days. There is a change in the critical path but the sensitivity of the network does not change much. Procure prototype parts is no longer on the critical path and now has one day of slack while Fabricate parts which had two days of slack is now critical. Management would like this solution since it does not appear to involve any additional costs. Case 6.1 Advantage Energy Technology Data Center Migration Brian Smith, network administrator at Advanced Energy Technology (AET), has been given the responsibility of implementing the migration of a large data center to a new office location. Careful planning is needed because AET operates in the highly competitive petroleum industry. AET is one of five national software companies that provide an accounting and business management package for oil jobbers and gasoline distributors. A few years ago, AET jumped into the “application service provider” world. Their large data center provides clients with remote access to AET’s complete suite of application software systems. Traditionally, one of AET’s primary competitive advantages has been the company’s trademark IT reliability. Due to the complexity of this project, Brian will have to use a parallel method of implementation. Although this will increase project costs, a parallel approach is essential if reliability is not to be compromised. (Rest of case not shown due to length.) Teaching Note: We recommend pointing out to students that this is a very sensitive schedule with multiple critical paths. Students should recognize that a delay in any one of the Switchover Meetings will not only extend the duration of the project but alter the critical path configuration. 1. Generate a priority matrix for AET’s system move. Priority Matrix TIME PERFORMANCE COST Constrain X Enhance X Accept X Upon using this case the authors found several points of confusion. We recommend making the following announcements before assigning this case: Even though ordering Ventilation System, New Racks, and Power Supplies/Cables should probably only take one day of actual work with the remaining duration being the time necessary for the vendor to fill and ship the order, assign these tasks the full duration for simplicity sake. Likewise, the raised floor is likely to be completed sometime after the start of the Renovation of the Data Center, students should still assume that City Inspection cannot occur until the Renovation is entirely completed. 2. Develop a WBS for Brian’s project. Include duration (days) and predecessors. 3. Using a project planning tool, generate a network diagram for this project. The Gantt chart is shown below. Now, the network diagram is shown below. In order to make it fit, the diagram is so small that it is hard to tell much about the diagram. Case 6.2 Shoreline Stadium Case The G&E Company is preparing a bid to build the new 47,000-seat Shoreline baseball stadium. The construction must start on July 3, 2017, and be completed in time for the start of the 2020 season. A penalty clause of $250,000 per day of delay beyond April 3 is written into the contract. (Rest of case not shown due to length.) 1. Will the project be able to be completed by the April 3rd deadline? How long will it take? The project is estimated to take 945 days and be completed by Friday, March 28, 2020. This is only six calendar days ahead of schedule. 2. What is the critical path for the project? Clear Stadium site+Demolish building+Set Up Construction site+Drive Support Pilings+Pour Lower Concrete Bowl+Construct Upper Steel Bowl+Install Seats+ Construct Steel Canopy+Install Roof Tracks+Install Roof+Inspection. 3. Based on the schedule would you recommend that G&E pursue this contract? Why? Include a one-page Gantt chart for the stadium schedule. Some students will say “no” because on a project of this size and duration you would want at least a one to two month buffer to absorb unexpected deadlines. Others will say if you have confidence in your estimates then the answer should be “yes” even with only a six day buffer. They should point out that overtime and working on weekends could be used to stay on schedule if delays occur. A few students may argue that G&E can endure limited penalty costs given the profit margin for the project. While there is some truth to this logic, the loss of future business due to damaged reputation is a strong counter argument against this line of reasoning. The WBS and Gantt chart are shown below: Solution Manual for Project Management: The Managerial Process Erik Larson, Clifford F. Gray 9781259666094, 9780078096594