1

Chapter 3

Project Management
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OBJECTIVES

• Definition of Project Management

• Work Breakdown Structure
• Project Control Charts
• Structuring Projects
• Critical Path Scheduling
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Project Management
Defined
• Project is a series of related jobs usually
directed toward some major output and
requiring a significant period of time to
perform
• Project Management are the management
activities of planning, directing, and controlling
resources (people, equipment, material) to meet
the technical, cost, and time constraints of a
project
• 中華專案管理學 會
• PMI
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Gantt Chart
Vertical Axis:
Always Activities Horizontal bars used to denote length
or Jobs of time for each activity or job.

Activity 1
Activity 2
Activity 3
Activity 4
Activity 5
Activity 6

Time Horizontal Axis: Always Time

 5

Organizational structures
• Pure project
– a self-contained team works full-time on the
project
• Functional project
– housed within a functional division
• Matrix project
– Utilize people from different function areas
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Pure Project
A pure project is where a self-contained team
works full-time on the project

Advantages

• The project manager has full authority over

the project
• Team members report to one boss
• Shortened communication lines
• Team pride, motivation, and commitment are
high
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Structuring Projects: Pure Project

Disadvantages

• Duplication of resources
• Organizational goals and policies are
ignored
• Lack of technology transfer
• Team members have no functional
area "home"
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Functional Project
A functional project is housed within
a functional division
President

Research and
Engineering Manufacturing
Development

Project Project Project Project Project Project Project Project Project

A B C D E F G H I

Example, Project “B” is in the functional

area of Research and Development.
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Functional Project: Advantages

• A team member can work on several

projects
• Technical expertise is maintained
within the functional area
• The functional area is a “home” after
the project is completed
• Critical mass of specialized knowledge
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Functional Project:
Disadvantages
• Aspects of the project that are not
directly related to the functional area
get short-changed
• Motivation of team members is often
weak
• Needs of the client are secondary and
are responded to slowly
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Matrix Project Organization Structure

President

Research and
Engineering Manufacturing Marketing
Development

Manager
Project A

Manager
Project B

Manager
Project C
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Structuring Projects
Matrix: Advantages
• Enhanced communications between
functional areas

• Pinpointed responsibility

• Duplication of resources is minimized

• Functional “home” for team members

• Policies of the parent organization are

followed
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Structuring Projects
Matrix: Disadvantages

• Too many bosses

• Depends on project manager’s

negotiating skills

• Potential for sub-optimization

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Work Breakdown Structure

A work breakdown structure defines the
hierarchy of project tasks, subtasks, and
work packages
Level Program

1 Project 1 Project 2

2 Task 1.1 Task 1.2

3 Subtask 1.1.1 Subtask 1.1.2

4 Work Package 1.1.1.1 Work Package 1.1.1.2

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Network-Planning Models
• A project is made up of a sequence of activities
that form a network representing a project
• The path taking longest time through this
network of activities is called the “critical
path”
• The critical path provides a wide range of
scheduling information useful in managing a
project
• Critical Path Method (CPM 要徑法 ) helps to
identify the critical path(s) in the project
networks
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Prerequisites for Critical Path

Methodology

A project must have:

• well-defined jobs or tasks whose completion

marks the end of the project;

• independent jobs or tasks;

• and tasks that follow a given sequence.

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Types of Critical Path Methods

• CPM with a Single Time Estimate
– Used when activity times are known with certainty
– Used to determine timing estimates for the project, each activity
in the project, and slack time for activities
• CPM with Three Activity Time Estimates
– Used when activity times are uncertain
– Used to obtain the same information as the Single Time Estimate
model and probability information
• Time-Cost Models
– Used when cost trade-off information is a major consideration in
planning
– Used to determine the least cost in reducing total project time
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Steps in the CPM with Single Time

Estimate
1. Activity Identification
2. Activity Sequencing and Network
Construction
3. Determine the critical path
– From the critical path all of the project
and activity timing information can be
obtained
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CPM with Single Time Estimate

Consider the following consulting project:
Activity Designation Immed. Pred. Time (Weeks)
Assess customer's needs A None 2
Write and submit proposal B A 1
Obtain approval C B 1
Develop service vision and goals D C 2
Train employees E C 5
Quality improvement pilot groups F D, E 5
Write assessment report G F 1

Develop a critical path diagram and determine

the duration of the critical path and slack times
for all activities.
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First draw the network

Act. Imed. Pred. Time

A None 2
B A 1
C B 1
D C 2
E C 5
F D,E 5
D(2)
G F 1

A(2) B(1) C(1) F(5) G(1)

E(5)
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Determine early starts and early finish times

ES=4
EF=6

ES=0 ES=2 ES=3 D(2)

ES=9 ES=14
EF=2 EF=3 EF=4 EF=14 EF=15

A(2) B(1) C(1) F(5) G(1)

ES=4
EF=9
Hint: Start with ES=0
and go forward in the E(5)
network from A to G.
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Hint: Start with LF=15

or the total time of the
Determine late starts ES=4 project and go
and late finish times EF=6 backward in the
network from G to A.
ES=0 ES=2 ES=3 D(2)
ES=9 ES=14
EF=2 EF=3 EF=4 LS=7 EF=14 EF=15
LF=9
A(2) B(1) C(1) F(5) G(1)
ES=4
LS=0 LS=2 LS=3 EF=9 LS=9 LS=14
LF=2 LF=3 LF=4 LF=14 LF=15
E(5)

LS=4
LF=9
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Critical Path & Slack

ES=4
Slack=(7-4)=(9-6)= 3 Wks
EF=6

ES=0 ES=2 ES=3 D(2)

ES=9 ES=14
EF=2 EF=3 EF=4 LS=7 EF=14 EF=15
LF=9
A(2) B(1) C(1) F(5) G(1)
ES=4
LS=0 LS=2 LS=3 EF=9 LS=9 LS=14
LF=2 LF=3 LF=4 LF=14 LF=15
E(5)

LS=4 Duration=15 weeks

LF=9
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Example 3.1 (P. 82)

Activity CPM activities
designation Immediate Time (weeks)
processors
Design A - 21

Build prototype B A 5

Evaluate C A 7
equipment
Test prototype D B 2

Write equipment E C, D 5
report
Write method F C, D 8
report
Write final report G E, F 2
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Example 2. CPM with Three Activity Time

Estimates

Immediate
Task Predecesors Optimistic Most Likely Pessimistic
A None 3 6 15
B None 2 4 14
C A 6 12 30
D A 2 5 8
E C 5 11 17
F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28
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Example 2. Expected Time

Calculations
ET(A)= 3+4(6)+15
Immediate Expected 6
Task Predecesors Time
A None 7 ET(A)=42/6=7
B None 5.333
C A 14 Immediate
Task Predecesors Optimistic Most Likely Pessimistic
D A 5 A None 3 6 15
E C 11 B
C
None
A
2
6
4
12
14
30
F D 7 D A 2 5 8
E C 5 11 17
G B 11 F D 3 6 15
H E,F 4 G B 3 9 27
H E,F 1 4 7
I G,H 18 I G,H 4 19 28

Opt. Time + 4(Most Likely Time) + Pess. Time

Expected Time =
6
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Ex. 2. Expected Time Calculations

Immediate Expected ET(B)= 2+4(4)+14

Task Predecesors Time 6
A None 7
B None 5.333 ET(B)=32/6=5.333
C A 14
D A 5 Immediate
E C 11 Task Predecesors Optimistic Most Likely Pessimistic
A None 3 6 15
F D 7 B None 2 4 14
G B 11 C
D
A
A
6
2
12
5
30
8
H E,F 4 E C 5 11 17
F D 3 6 15
I G,H 18 G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28

Opt. Time + 4(Most Likely Time) + Pess. Time

Expected Time =
6
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Ex 2. Expected Time Calculations

Immediate Expected ET(C)= 6+4(12)+30
Task Predecesors Time
A None 7 6
B None 5.333
C A 14 ET(C)=84/6=14
D A 5
E C 11 Immediate
Task Predecesors Optimistic Most Likely Pessimistic
F D 7 A None 3 6 15
G B 11 B
C
None
A
2
6
4
12
14
30
H E,F 4 D A 2 5 8
E C 5 11 17
I G,H 18 F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28

Opt. Time + 4(Most Likely Time) + Pess. Time

Expected Time =
6
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Example 2. Network

Duration = 54 Days
C(14) E(11)

A(7) H(4)
D(5) F(7)

I(18)

B G(11)
(5.333)
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Example 2. Probability Exercise

What is the probability of finishing this project in
less than 53 days?

p(t < D)
D=53
t
TE = 54
D - TE
Z =
∑ cp
σ 2
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Pessim. - Optim. 2
Activity variance, σ = (
2
)
6

Task Optimistic Most Likely Pessimistic Variance

A 3 6 15 4
B 2 4 14
C 6 12 30 16
D 2 5 8
E 5 11 17 4
F 3 6 15
G 3 9 27
H 1 4 7 1
I 4 19 28 16
(Sum the variance along the critical
path.) ∑ = 41
σ 2
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p(t < D)

t
D=53 TE = 54
D - TE 53- 54
Z = = = -.156
∑σ cp
2 41

p(Z < -.156) = .438, or 43.8 % (NORMSDIST(-.156))

There is a 43.8% probability that this project will be

completed in less than 53 weeks.
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Ex 2. Additional Probability Exercise

• What is the probability that the project

duration will exceed 56 weeks?
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Example 2. Additional Exercise Solution

p(t < D)

t
TE = 54
D=56
D - TE 56 - 54
Z = = = .312
∑σ cp
2 41

p(Z > .312) = .378, or 37.8 % (1-NORMSDIST(.312))

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Example continued (P. 84)

Complete the project in 35 weeks
CP1: A-C-F-G
CP2: A-B-D-F-G
Activity a m b ET variances
designation
A 10 22 28 21 9
B 4 4 10 5 1
C 4 6 14 7 2 7/9
D 1 2 3 2 1/9

E 1 5 9 5 1 7/9
F 7 8 9 8 1/9

G 2 2 2 2 0
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Time-Cost Models
• Basic Assumption: Relationship
between activity completion time and
project cost

• Time Cost Models: Determine the

optimum point in time-cost tradeoffs
– Activity direct costs
– Project indirect costs
– Activity completion times
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CPM Assumptions/Limitations
• Project activities can be identified as entities (There
is a clear beginning and ending point for each
activity.)
• Project activity sequence relationships can be
specified and networked
• Project control should focus on the critical path
• The activity times follow the beta distribution, with
the variance of the project assumed to equal the sum
of the variances along the critical path
• Project control should focus on the critical path
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Time­Cost Trade­offs
• Activity crashing: reduce activity times to 
complete a project earlier (at a cost, of course)
• To reduce project completion time:
• Focus on the critical activities!!
• Be careful!!  When you reduce the critical path, it may no 
longer be the critical path anymore.  Check it again!!
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Crashing Example
5, 2

B NT: normal time

CT: crash time
$18, $9
2, 1 3,1

A D
$10, $6
4, 3 $9, $5

C NC: normal cost

CC: crash cost
$8, $6
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Crashing example
Activity Avg.  Crash  Normal  Crash  Cost per day to  # of days an 
Time time cost cost expedite activity may be 
shortened
A 2 1 6 10 (120­6)/1=4 1

B 5 2 9 18 (18­9)/3=3 3

C 4 3 6 8 (8­6)/1=2 1

D 3 1 5 9 (9­5)/2=2 2
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Project  Critical  Least  Cost of  Total Cost

completion  path expensive  expediting
time activity
10 A­B­D ­ 0 26
9 A­B­D D 2 28
8 A­B­D D 2 30
7 A­B­D B 3 33
6 A­B­D A 4 37
A­B­C
5 A­B­D B+C 5 42
A­C­D
5 A­B­D B ? ?
A­C­D
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Crashing Example
B
6

A D E
7 8 10

C
4
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Crashing example
Activity Avg.  Crash  Normal  Crash  Cost per day to  # of days an 
Time time cost cost expedite activity may be 
shortened
A 7 5 $70 100 (100­70)/2=15 2

B 6 3 60 80 (80­60)/3=6.67 3

C 4 2 40 60 (60­40)/2=10 2

D 8 6 80 120 (120­80)/2=20 2

E 10 7 10 40 (40­19)/3=10 3

• Q: By how many days can I expedite 
this project if I had a budget of $24?
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例題
活動 描述 立即活 預計完成
動 時間
製造活動 A 設計原型 90
B 材料決定及購買 A 15
C 原型製造 B 5
D 設計修正 G 20
E 第一次生產 D 21
訓練活動 F 訓練幕僚人員 A 25
G 幕僚人員建議 C, F 14
H 銷售人員訓練 D 28
廣告活動 I 生產前廣告活動 A 30
J 生產後廣告活動 D, I 45
 46

例題
活動 ES EF LS LF Slack 成本 / 日
A 0 90 0 90 0 25000
B 90 105 95 110 5 12000
C 105 110 110 115 5 18000
D 129 149 129 149 0 15000
E 149 170 173 194 24 11000
F 90 115 90 115 0 10000
G 115 129 115 129 0 5000
H 149 177 166 194 17 14000
I 90 120 119 149 29 17000
J 149 194 149 194 0 30000
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延遲分 析
• 單一延遲
– 要徑活動
– 非要徑活動
• 多重延遲
– E 延遲 15 天 ; I 延遲 15 天
– B 延遲 4 天 ; E 延遲 15 天
– B 延遲 4 天 ; C 延遲 4 天 ;
 48

資源分配 resource leveling

• 考慮各活動開始的時程
• 決定哪些在尖峰期花費的活動有寬鬆
• 介於 ES 與 LF 之間 , 將介於尖峰之非要
徑活動重新安排
• 以 ES 計算第 118 天的累積總成本 , 工作
A, B, C, F 均已完成 , 工作 G 已作了 3 天
, 工作 I 已作了 28 天 , 故累積總成本為
3,261,000
• 以 LS 計算第 118 天的累積總成本 , 工作
A, B, C, F 均已完成 , 工作 G 已作了 3 天 ,
故累積總成本為 2,785,000
 49

DAY 118
活動 ES EF LS LF Slack 成本 / 日
A 0 90 0 90 0 25000
B 90 105 95 110 5 12000
C 105 110 110 115 5 18000
D 129 149 129 149 0 15000
E 149 170 173 194 24 11000
F 90 115 90 115 0 10000
G 115 129 115 129 0 5000
H 149 177 166 194 17 14000
I 90 120 119 149 29 17000
J 149 194 149 194 0 30000
CPM: A-F-G-D-J
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ES 時程 每日支 出
B, F, I: 39 C, F, I: 45 F, I: 27 G, I: 22 G: 5 D: 15

60

40
A:25
20

0
1 31 61 91 121 151 181

CPM: A-F-G-D-J E, H, J: 55 H, J: 44 J: 30
 51

調整尖峰時間 149-170
E, H 都非 CPM, 將成本高的 H 調至 LS=166
B, F, I: 39 C, F, I: 45 F, I: 27 G, I: 22 G: 5 D: 15

60
40
A:25
20
0
1 31 61 91 121 151 181

CPM: A-F-G-D-J E, J: 41 E, H, J: 55 H, J: 44
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最終狀況
B, F: 22 C, F: 28 F, I: 27 G, I: 22 D, I: 32 D: 15

60
40
A:25
20
0
1 31 61 91 121 151 181

CPM: A-F-G-D-J E, J: 41 E, H, J: 55 H, J: 44
 53

線性規 劃法
目標函 數為專 案完 成時間
Min Xff
ST
Xff >= Xe+21 Xff >= Xh+28
Xff >= Xj+45 Xe >=Xd+20
Xh >= Xd+20 Xj >= Xd+20
Xj >= Xi+30 Xd >=Xg+14
Xg >= Xc+5 Xg >= Xf+25
Xi >= Xa+90 Xf >=Xa+90
Xc >= Xb+15 Xb >= Xa+90
All Xff >= 0