Project Management: Phases, Selection, and PERT/CPM

Posted on Feb 7, 2025 in Business Administration and Management (BAM)

Project Management

  • All projects are expected to achieve the following performance goals: to be completed within time/schedule, cost/budget, and quality guidelines. To accomplish this, projects must be authorized, their objectives and scope must be established, a project manager should be appointed, and the project must be planned.
  • Projects go through a series of stages or phases—a life cycle—which include project initiation (conception, feasibility study/selection), planning and scheduling, execution, control, and closeout.
  • This involves factors such as budget, availability of personnel with appropriate knowledge and skill, cost–benefit considerations, financial benefits (e.g., return on investment and net present value), and how the project will contribute to the company’s strategy.
  • The following steps for project selection have been suggested:
    1. Establish a project council (e.g., the executive committee).
    2. Identify some project categories (e.g., long vs. short term, minor vs. major) and criteria (e.g., business value, customer satisfaction, process effectiveness, employee satisfaction).
    3. Collect project data.
    4. Assess resources (e.g., labor, dollars) availability.
    5. Prioritize the projects within categories.
    6. Select projects to be funded.
    7. Communicate the results to stakeholders and provide the reasons for selection or non-selection of each project.
  • The project manager is responsible for effectively managing each of the following:
    1. The work, so that all of the necessary activities are accomplished in the desired sequence, and performance goals are met.
    2. The human resources, so that those working on the project have direction and motivation.
    3. Communications, so that everybody has the information they need to do their work (usually through regular meetings), and the customer/sponsor is well informed. Logs of actions, issues, and risks should be kept to manage the project, and to have as project history.
    4. Quality, so that the specific objective is realized.
    5. Time, so that the project is completed on schedule.
    6. Costs, so that the project is completed within budget.
  • Risk response includes:
    1. Redundant (backup) systems; for example, an emergency generator could supply power in the event of an electrical failure.
    2. Using a less complex process or a more stable supplier.
    3. Frequent monitoring of critical project aspects with the goal of catching and eliminating problems in their early stages, before they cause extensive damage.
    4. Transferring risks, say by outsourcing a particular component of a project and requiring performance bonds.
    5. Risk-sharing, for example, as in an oil and gas consortium.
    6. Extending the schedule, creating contingency funds, reducing project scope, clarifying the requirements, obtaining information, and improving communications.
  • By using PERT and CPM, managers are able to obtain:
    1. A graphical display of project activities and their sequential relationship.
    2. An estimate of how long the project will take.
    3. An indication of which activities are most critical to timely project completion.
    4. An indication of how long any activity can be delayed without delaying the project.

Using PERT/CPM

  • Once these values are found, they can be used to find:
    1. Expected project duration.
    2. Activity slack times.
    3. The critical path.
  • ES, the earliest time the activity can start.
  • EF, the earliest time the activity can finish.
  • LS, the latest time the activity can start and not delay the project.
  • LF, the latest time the activity can finish and not delay the project.
  • First, we calculate the earliest start and finish times for each activity, starting from the left at the start node and moving to the right of the precedence network (called a forward pass), using the following two simple rules:
    1. The earliest finish time for any activity is equal to its earliest start time plus its expected duration, t.
    2. ES for an activity with one immediate predecessor is equal to the EF of that node. ES for an activity with multiple immediate predecessors is equal to the largest EF of those nodes. Let ES of the start node be zero.
  • Now, we calculate the latest start and finish times, starting from the right (i.e., the end node) and moving to the left of the precedence network (called a backward pass), using the following two simple rules:
    1. The latest start time for any activity is equal to its latest finish time minus its expected duration.
    2. For a node with one immediate successor, LF equals the LS of that node. For a node with multiple immediate successors, LF equals the smallest LS of those nodes. Let LF of the end node equal its EF.