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CHAPTER 4
MANAGING PROJECT PROCESSES
THE CONCEPT

A project is an interrelated set of activities that has
a definite starting and ending point and that results
in a unique outcome for a specific allocation of
resources
 Consisting of three major activities : defining &
organizing, planning, monitoring & controlling
DEFINING AND ORGANIZING PROJECT

Selecting the project manager and team :
organizational structure (functional, pure, matrix),
control and efficiency
 Defining the scope and objectives : scope, time
frame and allocated resources
 Planning the project format : guidelines for
meetings, resolving issues, communication
PLANNING PROJECTS

Defining the work breakdown structure : activity,
ownership and procedure
 Diagramming the network - PERT/CPM :
 identifying and organizing the data and the
interrelationship between activities
 estimating the completion time of the project
 highlighting the crucial activities to completing projects
on schedule
 analyzing the time & cost implications of resources
trade-offs

Developing the schedule :
 the critical path is the sequence of activities between
a project’s start and finish that takes the longest time
to complete
 activity slack is the maximum length of time that an
activity can be delayed without delaying the entire
project (latest start - earliest start time or latest finish
- earliest finish time)
 free slack = earliest start time of the next activities earliest finish time of the current activities
 the
earliest finish time = earliest start time + t
 the earliest start time is the earliest finish time of the
preceding activity or the latest of the earliest finish
time of the preceding activites
 the latest start time = the latest finish time - t
 the latest finish time is the latest start time of the
activity immediately following it or the earliest of the
latest start time of the subsequent activities

Analyzing cost-time trade-offs : keeping cost at
acceptable level as important as meeting schedule dates
 total project cost = (direct + indirect + penalty) costs
 crashing or expediting by shorten individual activities
(by increasing its direct costs) to reduce overall project
completion time and consequently its (indirect) costs,
gain additional revenues and to avoid penalty costs
 cost to crash per week = (CC-NC)/(NT-CT)
 minimizing cost

Assessing risk
 the notion of uncertainty relates to project timing and
costs, such as weather, labor shortages, supply delays
etc
 incorporating uncertainty into the network model by
using computer simulation or statistical analysis
 computer simulation : choosing activity times of
critical path from probability distribution randomly
which will result in a probability distribution of
completing dates
 statistical analysis
approach : optimistic, most
likely and pessimistic time derived from a beta
probability distribution to calculate the expected
time and variance
 activity duration times are independent random
variables which approach normal distribution as
the number of random variables increases
 the sum of (earliest) expected times and variances
of the critical path
MONITORING AND CONTROLLING PROJECT

Monitoring project status :
 Open issues and risks
 Schedule status : negative slack and crashing
 Monitoring project resources :
 resources leveling
 resources allocation
 resources acquisition