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Project screening
Birth of the project First phase of the project

Project Management
Project Identification and Screening

Project Selection
Project identification Project Appraisals Project selection

Project Identification
Objective should be clear SWOT analysis Alternate project possibilities

Searching New Ideas

What are the objectives? Brainstorming Emerging market trends SWOT Other Constraints

Motivation
Means to accomplish some goal or objective Ex. Market growth, Family objective, Individual objective etc.

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Objective
To increase Project To minimize threats of losses To become more competitive (Jet has acquire Air shara) To provide help after a disaster To train people in a new era (Oracle is new) To reduce pollution in Delhi To become a successful Entrepreneur

SWOT Analysis
Motivated by objective Experience What type of experience in the same field Resource Environmental Pressures (Ceat Tyre) Keeping this factors in mind an analysis of Strength/Weakness/Opportunities/Threats is made to identify and select suitable projects It should not be done in isolated manner Turthful

Strength
Experience and expertise Financial position (How much you have and how much you can raise) Capital raising capability Industrial contacts Foreign collaborations

Weakness (Internal)
Newer unfamiliar Technologies Inability to raise huge investments lack of experience lack of trained personal inability to forecast market trends

Opportunities
Emerging technologies new product with new markets New process with better features special financing schemes (Taking Cart loans etc) Government and other incentives (Incentives for particular zone )

Threat
Competitors Poor state of the economy (Good product but people buying capability) Outdated technologies New products and services

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How idea products comes

. Marketing and sales department (They are in touch with the consumers etc) - More idea . Research and Development (New product and Process etc) ...Catch on idea and work on this .Top Management . Product department (Simplification in manufacturing.) . Consumer

Brainstorming (Way to generate Ideas)

-> Good means to generate ideas ->Focus on UNINHIBITED (encourage the people to think creativity )participation by a group ->Listing of all ideas without suppressing creativity at source (Even silly ideas should be ) -> List of ideas subjected to screening and evaluation subsequently

Screen Ideas
Poor Fair Good Vgood Exc. Weigh 1 2 3 4 5 % Cost 20% Risk 30% Return 40% Hazard 10%

Criteria
Investment Rate of Return Risk Likely Profit Pay back Period Similar to Existing Business Flexibility Environment impact completion

Mortality of New project ideas

Screening (35 ideas) Appraisals (10 ideas) Final one projects (1 idea)

Reduce Vehicular Pollution in Mumbai

Restrict registration of new vehicle Enforce strict emission regulations for vehicles Ban diesel car Public transport Growing more trees Car pooling Ban vehicles more than 10 years

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Summary
Objective -> Brainstorming -> SWOT>Project possibilities -> (Screening) using criteria Candidate for Project Propsal

Project Appraisal -1
Feasibility (worthwhile) Market analysis Financial Analysis Social Economical Demand Analysis Economic Analysis Ecological Analysis

Market Appraisal
What would be the aggregate demand of the proposed product/Service? Market share of the product?

Market Appraisal (Issues)

Past and Current demand trends Past and Current Supply position Production possibilities and constrains Exports and Imports Nature of Competition Cost structure Elasticity of Demand (Change in price.)

Market Appraisals (Issues Cont.)

Consumer Behavior -Motivation, Attitudes ,Preferences ,requirements Distribution Channels - Marketing policies - Administrative ,Technical and Legal Constraints

Technical Appraisals
Whether Prerequisite for the success of the project considered? Good Choices with regard to Location ,size ,process ,machines etc Preliminary test and studies (Soil test ,etc) Availability of Raw Materials ,Power and other inputs Optimal scale of operations (Machine should be run with minimum load) Choice of suitable production process Choice of appropriate machines and equipment

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Technical Appraisal
Effluents and waste disposal Proper layouts of Plants (Man and Material movement) Realistic work schedule Socially acceptable technology

Economic Appraisals
Social Cost benefit Analysis (Displacement of people and Job opportunity etc) Direct economic benefits and cost in terms of shadow prices (Land cost should be less than the project cost then it is ok) Impact of project on distribution of income in society.

Economic Apprisals
Impact on level of saving and investments in the society (Nsc,Bonds etc) Impact on fulfillment of the national goals. - Self sufficiency - Employment

Ecological Apprisals
Impact of the project on quality of - Air - Water - Noise -Vegetation -Human Life

Ecological Appraisal
Major projects ,such as these ,Cause environmental damages. Power Plants Irrigation schemes Industries like bulk drugs chemical processing and Leather Processing Likely damage and the cost of restration

Financial Appraisals
Whether the project is financially viable? 1. servicing debt 2.Meeting return expectations

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Financial Appraisals
Investment and financial Phasing of the total cost Means of financing (Source ) Cost of capital ( Depends on the interest) Projected Profitability Breakeven Point Cash flow in the projects Investment worthwhile? - Net present value - IRR - Payback period Loan Returning Capability -Dept service coverage ratio Level of Risk --IRR and PAY BACK GRAPH

Financial Appraisal of the projects

Estimation of cost of the project and its timings (When is the cost is going to incur.) Estimation of the likely revenues during each period Cost of capital (Depending on the Earning capability, Current interest etc) The planning horizon of the project (No of years) Risk in the project is evidenced by the the worst and best of cost and revenues

Financial Appraisal
NPV IRR Simple before /after tax rates of return Equivalent annual cost (Time value money) (Equal distribution of NPV) Pay back period (Low is best)

Criteria for Debt Repayment

Benefit/cost ratio of discounted cash flow Dept service coverage ratio Company reputation Track record of the past repayment of the loan.

Sample Project
Initial investment Rs. 3,00,000 Annual cost of operation 20,000 Expected annual revenues First 2 years -> 1,00,000 Next 3 years -> 2,00,000 Planning horizon 5 years

Calculations
Revenues 100 100 200 Cost 300 20 20 20

200 200 20 20

Time 0 1 2 3 4 5 (All cost and revenue are in thousand)

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Debt service coverage ratio

1> Total cash accrual Profit after tax Depreciation (Should be added) Interest on term loan 2> Dept service requirement Interest on term loan Repayment of term loan Financial institution needs this report

Debt service coverage Ratio

Total cash accrual/Dept service requirement DSCR is b/w 1.5 to 2 is best <1.5 means loan period is high >2 means loan for short period

Project Management
Project selection Purpose : To select the suitable project

Criteria
Investment Return (IRR) Payback Net Present Value (NPV) RISK (High, Low Subjective) Future Growth Prospects Similarity to existing Business Environmental implications

Evaluation of the Projects

Rarely Only one project may meet all the criteria and that become the dominant (Best in all criteria) project .This project should clearly be chosen. Difficult in choosing the non dominant projects (Good in one criteria bad in some criteria). Management priority is final in the (non dominant project).

Criteria

Tangible
(Measurable in Rs,.Percentage, Year,Rs/year) (Commensurate units and Non Commensurate units)

Non Tangible (Non Measurable) (Score on subjective scale 0-9)

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Decision Matrix
Preparing Matrix with the help of all criteria and Project We may not be able to add the all evaluation because of different in the measurement. We have do the normalization to bring all the evaluation into single.

The Preferred Solution

Dominant solution (All criteria is ok) Pareto optimal solution or Choosing non dominated solution set. Selection from out of the non dominant solution will involve tradeoffs and governed by the priorities/Weight ages.

Weight ages to Criteria

Mutual consultation or Polls( Talking to the management people and take their opinion) Pair wise comparison (What are the criteria to be chosen for comparison?) Expert Judge /Computer software/AHP (Analytical hierarchy process)

Criteria for Project Selection

C1 (Investment In Lakhs Rs) 10 W 2 B C2 (Pay Back Period) 10 W 2 B C3 (IRR) 10 W 40 B C4 Risk (V high(W), high, Low, v low(B)) C5 Future Growth (V high(B), high, Low, v low(W)) C6 Similar to existing business (V high(B), high, Low, v low(W))

Performance of the competing Projects

c1 (Inv.) c2 (IRR) c3 (Pay Back) C4(Risk) c5(FG) C6(Similler) P1 10 40 8 High Good V.Good P2 6 25 4 v.High Med. Good P3 8 30 10 Low V.Good Medi. P4 3 10 3 Med Poor V.Poor P5 2 20 2 V.Low V.Poor Poor Green-> Worst : Blue-> Best IF All the criteria is Good for the particular project that is called Dominant Project. All the above projects are called non dominant because of ?? X1 X2 X3 X4 X5 X6

Fighter Aircraft Selection An Example

Maximum Speed (Mach Number) Ferry Range (Nautical Miles) ..With out Refilling how much distance ? Maximum Pay load (LBS) ..How much weight it can carry? Acquisition Cost (Million $) Reliable (High- Low) Maneuverability (High Low) ..How Quickly Manipulate/Easy take off X2 15000 2700 2000 1800 x3 20000 18000 21000 20000 X4 5.5 6.5 4.5 5 X5 Avg. Low High Avg. x6 V.high Avg. High Avg.

A1 A2 A3 A4

X1 2.0 2.5 1.8 2.2

X4 is cost criterion (Low is good) and rest all are benefit criterion (High) TOPSIS (Technique for order preference using similarity to idle solution)

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Scale for Intangibles

Cost attribute
Very High 1 High 3 Avg 5 Low 7 V.Low 9 X1 2.0 2.5 1.8 2.2 X2 15000 2700 2000 1800 x3 20000 18000 21000 20000 X4 5.5 6.5 4.5 5

Normalized Decision Matrix

1 3 5 7 9 A1 A2 A3 A4 X1 2.0 2.5 1.8 2.2 X2 15000 2700 2000 1800 x3 20000 18000 21000 20000 X4 5.5 6.5 4.5 5 X5 (B.A) 5 3 7 5 x6(B.A) 9 5 7 5

Benefit attribute(B.A)
Very low Low Avg High Very high X5 (B.A) Avg(5) Low (3) High (7) Avg.(5)

Example . 2/(Sqrt( (2.0*2.0)+(2.5*2.5)+(1.8*1.8)+(2.2*2.2) X1 .4671 .5839 .4204 .5139 X2 .3662 .6591 .4882 .4392 x3 .5056 .4550 .5308 .5056 X4 .5063 .5983 .4143 .4603 X5 (B.A) .4821 .2887 .6736 .4811 x6(B.A) .6708 .3727 .5217 .3727

A1 A2 A3 A4

x6(B.A) V.high(9) Avg.(5) High(7) Avg.(5)

A1 A2 A3 A4

Normalized decision Matrix with Weight

Weight .2 .1 .1 .1 X1 X2 x3 X4 A1 .4671 .3662 .5056 .5063 A2 .5839 .6591 .4550 .5983 A3 .4204 .4882 .5308 .4143 A4 .5139 .4392 .5056 .4603 Calculation : A1X1 * .2 ..A1X2 * .1 X1 X2 x3 X4 A1 .0934 .0366 .0506 .5063 A2 .1168 .0659 .0455 .0598 A3 .0841 .0488 .0531 .0414 A4 .1028 .0439 .0506 .0460 (Largest is best for X1 ,X2,X3,X5,X6) Lowest is best for X4 ..Because of the cost Blue - Best ..Underline -> Worst .2 X5 (B.A) .4821 .2887 .6736 .4811 X5 (B.A) .0962 .0577 .1347 .0962 .3 (Preference) x6(B.A) .6708 .3727 .5217 .3727 x6(B.A) .2012 .1118 .1565 .1118

Ideal and Negative ideal Solution

Mention Ideal as A* and Negative ideal Solution as AA1 A2 A3 A4 X1 .0934 .1168 .0841 .1028 X2 .0366 .0659 .0488 .0439 x3 .0506 .0455 .0531 .0506 X4 .0506 .0598 .0414 .0460 X5 (B.A) x6(B.A) .0962 .2012 .0577 .1118 .1347 .1565 .0962 .1118

A* (.1168,.0659,.0531,0414,.1347,.2012) Idle Solution

A- (..0841,.0366,.0455,.0598,.0577,.1118) Negative idle Solution

Separation Measure
X1 A1 A2 A3 A4 .0934 .1168 .0841 .1028 X2 x3 .0366 .0506 .0659 .0455 .0488 .0531 .0439 .0506 X4 .0506 .0598 .0414 .0460 X5 (B.A) x6(B.A) .0962 .2012 .0577 .1118 .1347 .1565 .0962 .1118

Negetive
A- (..0841,.0366,.0455,.0598,.0577,.1118) Negative idle Solution

Choose A- values X1 X2 x3 square(.0934-.0841) square (.0366-.0366) .o598) etc. X4 X5 (B.A) x6(B.A) square(.0506-.0455) square(.0506-

A* (.1168,.0659,.0531,0414,.1347,.2012) Idle Solution A- (..0841,.0366,.0455,.0598,.0577,.1118) Negative idle Solution

A1 A2 A3 A4

Choose A* values X1 X2 square(.0934-.1168) square (.0366-.0659) square(.1168-.1168) etc square(.0841-.1168) square(.1028-.1168) x3 X4 X5 (B.A) x6(B.A) square(.0506-.0531) square(.0506-.o414) etc.

A1 A2 A3 A4

Sqrt (A1X1+A1X2+A1X3+A1X4+A1X5+A1X6) Become A1*. Sqrt (A2X1+A2X2+A2X3+A2X4+A2X5+A2X6) .Become A2*.. Sqrt (A3X1+A3X2+A3X3+A3X4+A3X5+A3X6) Become A3* squrtA4X1+A4X2+A4X3+A4X4+A4X5+A4X6) .. Become A4

.0545 .1197 .0580 .1009

Sqrt (A1X1+A1X2+A1X3+A1X4+A1X5+A1X6) Sqrt (A2X1+A2X2+A2X3+A2X4+A2X5+A2X6) Sqrt (A3X1+A3X2+A3X3+A3X4+A3X5+A3X6) squrtA4X1+A4X2+A4X3+A4X4+A4X5+A4X6)

Become A1-. ..0983 .Become A2-.. .0439 Become A3- .0920 .. Become A4- .0458

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Value of separation
Idle Solution Negative Idle Solution

Ranking the Project

A1 First (We have to chose this first) A3 - Second A4 - Third A2 - Fourth

A1* A2* A3* A4*

.0545 .1197 .0580 .1009

A1A2A3A4-

.0983 .0439 . 0920 .0458

Relative closeness: A1-/(A1- + A1*) = .0983/(.0545+.0983) = .0983/.1528 = .643 A2-/(A2- + A2*) = .0439/(.0439+1197) =.268 A3-/(A3- +A3*) = .0920/(.0920+.580) =.613 A4-/(A4- + A4*) = .0458/(.0458-.1009) =.312

Methods
TOPSIS (Technique for order preference using similarity to idle solution)
Weight 0.1 Style Civic Hona City Ford Mazda 7 8 9 6

Example 2
0.4 Reliability 9 7 6 7 0.3 Fuel Economic. 9 8 8 8 0.2 Cost 8 7 9 6

TOPSIS Method should be used to chose the best project

Project Process Groups

Initiating Project Charter and Stake holder Planning Project Management Plan Executing - Executing as per the PMP Monitoring & Controlling Monitoring the project as per the PMP Closing Payment and release the resource

End of Project Selection

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Knowledge Area
SCOPE TIME COST HR QUALITY RISK COMMUNICATION

Project Mangers Position

- Functional Organization - Projectized Organization - Best

Project Charter
Official document to start the project Business case should be there Summary milestones Sponsor will sign the project charter Project Manger will be assigned.

Scope
Product scope : the features and functions of the product or service the you and your team are building Project Scope : All the work need to done to make the product - Scope Creep means changes coming in between (Bisleri Bottle example)

Scope
Collect requirement Define Scope Create WBS (work break down structure)

Requirement decision
Unanimity Everyone agrees on the decision Majority More than half Plurality Idea that gets the most votes Dictatorship One person make the decision

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WBS
Work Break down structrue -What are the work needs to be done -WBS does not show the order of the work packages/Dependencies. - Work involved in creating the product. - Work break down structure can be broken down by project phase. - WBS can be broken down by deliverables

Work Package
Work package is the lowest level in the WBS Control accounts are established for the work package (for accounting purpose)

Project Representation
- How the project will be represented - Project network is the continent way to represent - What are all goes into - What are the advantages - What are the prerequisite of the project

Formation of the project team

Appointment of the project manager Selection of project team Members Briefing meeting amongst the team members Broad consensus of the scope of the project and time frame Development of work break down structure and allocation of responsibilities

Work BreakDown Structure(WBS)

Breakdown of the total project task into components to establish - How work will be done? - How people will be organized? - How will be resource will be allocated? - How progress would be monitored?

Work Breakdown Structure

Project System1 System 2 System 3

Sub sys1 Sub Sys2 Sub sys3 Task 1 WB1 Task 2 WB2 Task 3 st1 WB3 Task 4 st2 Task 5

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WBS
Hardware orientation (Identification of the basic Work packages) Agency orientation (Based on the assignment of responsibility of different agencies) Function oriented (Design, procurement etc)

WBS cont.
Generally a WBS includes 6-7 levels WBS does not show the sequencing of work What is the quantum of the work ? WBS should be developed by the individuals knowledge about the work. Break down the project only to a level sufficient to produce estimate

Work Breakdown Structure

Missile
Guidence Control system Rocket Launching Platform

Ballestic Shell

Propulsion Engine

Re Entry Vehile

Stage 1

Stage II

Solid Fuel

Means of Project Repre.

Project Name and Desc. List of jobs that constitute the project Gantt chart / Bar chart will show when the activity takes place Project Network showing activities , their dependencies and relations (AOA and AOA)

AON

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Alternative project representations

AOA(Activity on Arc) AON(Activity on Node) Arrow diagram Precedence Network Event Oriented Activity oriented Activity On Arc Activity on Node
I j

Activity Durations
Deterministic - Previous experience yields fairly accurate estimation of the activity duration. It is single time estimate is used. ex . Construction and market survey Probabilistic - New activities being carried out for the first time, R&D activity and uncertainty in timing .Three time estimates are commonly used to for each

Example 1
Job A B C D E F G H I predecessors A A,B D D C,E C,E F,G,H Duration 2 3 1 4 5 8 6 4 3
c A 2

Nw for AOA
Dummy arc is required in AOA (Logical Dummies/d1 and Parallel dummies d2)
h 5 1 2 1 3 3 4 4 8 B d1 D e 5 6 f 7 i 3 8 g d2 4 6

Critical Path
Longest path in the network Lower bound on the project duration (Minimum time) Selective control for the management. Can be determined by : - Enumeration of all the paths in the network. (Discussion on crashing) - Event based computations (A-O-A Networks) - Activity based computations (A-O-N Networks)

Path Enumeration
To find the no of paths.

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Forward Pass (Early occurrence)

Initialization For first node E1=0 (The project start time) (This is applicable to all start nodes) For next node onwards Node 2 = Max (Previous nodes value + task time)
2 A 2 2 0 1 3 3 B d1

Event see the node 5 why it is 12

12 2 A 0 2 1 3 3 4 4 8 B 3 d1 D 7 f 7 e 5 6 i 3 8 2 1 g d2 18 21 5 c h 4 6 16

Backward pass (Late occurrence)

Initialization Start from Last Node En=Project duration identified during forward pass (Last node value) For next node onwards Node 2 = min (of successor nodes value) - task time (See the node 4 ..Lower value)
12 2 A 0 2 1 0 3 3 4 3 7 (minimum value) 4 8 18 21 (Backward Pass start) B 3 2 1 3 d1 D 7 f 7 e 5 6 i 3 8 12 (Min value) 5 c h 4 18 g 6 d2 18(Maxium value) 21 16

Early and late schedule

Job A B C D E F G H I Duration 2 3 1 4 5 8 6 4 3 ES 0 0 2 3 7 7 12 12 18 EF 2 3 3 7 12 15 18 16 21 LS 1 0 11 3 7 10 12 14 18 LF Total Float 3 1 3 0 12 9 7 0 12 0 18 3 18 0 18 2 21 0

Total Float = LS-ES or LF-EF Float 0 indicate critical Patch ( B-D-E-G-I) Arcs joining b/w two critical nodes cant be the critical activity

Gantt chart showing activity schedule

Job A B 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 B-D-E-G-I

Critical Path

12 2 A 0 2 1 0 3 3 4 3 4 8 B 3 2 1 3 d1 D 7 e 5 5 c h 4

16 6 18 g 6 f 7 18 7 (minimum value) i 3 8 d2 18(Maxium value) 21

12 (Min value)

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Event Slacks
Slack on Node I ( Li-Ei) Slack on Node J (Lj-Ej) Total Float = F1(ij) = Lj-Ei-Tij (Maximum flexibility) Safety Float = F2(ij)=Lj-Li-Tij (Predecessor utilize the float) Free Float =F3(ij) =Ej-Ei-Tij (Successor utlize the float) Indep.float =Max(0,Ej-Li-Tij) (Starting late and trying to reach early finish)Ei Ej Tij
I Lj Li

Float computations
Total float =LS-ES =LF-EF Safety Float = Total Float Slack in the prec. Node (TF-(Li-Ei)) Free float = Total Float Slack in the succ. Node (TF-(Lj-Ej)) Independent Float = Total Float max (0,Total float (Slack in succ. And Slack in Prec.)
Ei

Tij

Ej

Li

Lj

Ei (Early start)

Li (Late Start)

Ej (Early Finish)

Lj (Late Finsh)

Floats
Job Total Safety Free Independent A 1 1 0 0 B 0 0 0 0 C 9 8 9 8 D 0 0 0 0 E 0 0 0 0 F 3 3 3 3 G 0 0 0 0 H 2 2 0 0 I 0 0 0 0 For Non critical Path: C(T)=EF-ES=9, C(Saf)=(9-(3-2) = 8, C(Free)=9-(12-12)=9 ,C(ind)=9- ((3-2) + 12-12) =8 F(T)=10-7=3,F(Saf)=3-(7-7)=3, F(Free)=3-(18-18)=3,F(Ind)=3-(7-7)+(18-18) H(T)=14-12=2,H(Saf)=2-(12-12)=2 ,H(Free)=2-(18-16)=0,H(ind)=2-(12-12)+(18-16)=0 (To find out the total flat use the chart of ES,LS,EF,LF) To find the Free flot,saf float and ind flot use the n/w diagram (Early and late occurrence) A(T)=1-0=1, A(Saf)=1-(0-0)=1 ,A(Free)=1-(3-2) = 0, A(ind)= 1- (0-0) +( 3-2) For critical path: All float will be 0

Interpretation
Successors
Early
EARLY Free

Late
Total

Predecessors
LATE Independent Safety Total : Predecessor start as early as possible and successor start as late as possible Independent : Predecessor start as late as possible and successor start as early as possible Free : Predecessor and Successor start as early as possible Safety : Successor start as late as possible and predecessor start as late as possible

AON Benefits
Basic Scheduling computation can be done on both AO-N or A-O-A Networks A-O-N networks are simple to draw There are no float anomalies in AON network A-O-N networks are becoming more popular in Computer packages Lead easily to PDM with expanded precedence relationships (FS,SF,FF,SS) Used in type of floats.

Float/Slack
When it comes to project activity management, activity sequencing is one of the main tasks. Among many other parameters, float is one of the key concepts used in project scheduling. Float can be used to facilitate the freedom for a particular task. Let's have a look at the float in detail. Float: When it comes to each activity in the project, there are four parameters for each with related to the timelines. Those are defined as: Earliest start time (ES) - The earliest time, an activity can start once the previous dependent activities are over. Earliest finish time (EF) - This would be ES + activity duration. Latest finish time (LF) - The latest time an activity can finish without delaying the project. Latest start time (LS) - This would be LF - activity duration. The float time for an activity is the time between the earliest (ES) and the latest (LS) start time or between the earliest (EF) and latest (LF) finish times. During the float time, an activity can be delayed without delaying the project finish date.

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Float
Slack (SLACK: THE AMOUNT OF TIME THAT A TASK CAN SLIP BEFORE IT AFFECTS ANOTHER TASK OR THE PROJECT'S FINISH DATE. FREE SLACK IS HOW MUCH A TASK CAN SLIP BEFORE IT DELAYS ANOTHER TASK. TOTAL SLACK IS HOW MUCH A TASK CAN SLIP BEFORE IT DELAYS THE PROJECT.) is the amount of time that a task can slip before it affects another task or the project's finish date. Use the Early Start, Early Finish, Late Start, Late Finish, Start Slack, and Finish Slack fields to analyze project schedule delays and find available slack in your schedule

Types of Floats Leads and Lags:

Leads and Lags are types of float. Let's take an example to understand this. In project management, there are four types of dependencies: Finish to Start (FS) - Later task does not start until the previous task is finished Finish to Finish (FF) - Later task does not finish until the previous task is finished Start to Start (SS) - Later task does not start until the previous task starts Start to Finish (SF) - Latter task does not finish before previous task starts Take the scenario of building two identical walls of the same house using the same material. Let's say, building the first wall is task A and building the second one is task B. The engineer wants to delay task B for two days. This is due to the fact that the material used for both A and B are a new type, so the engineer wants to learn from A and then apply if there is anything to B. Therefore, the two tasks A and B have a SS relationship. (Second is having the start dependency- SS)

Example A-O-N
Job A B C D E F G H I Precedence A A,B D D C,E C,E F,G,H Duration (days) 2 3 1 4 5 8 6 4 3
2 1

AON
6

C A

4 3 3 D E 5 H B 8 4 I

Forward Pass and Backward Pass AON

FP For all the beginning activity Early Start Value (ES) = 0 Early finish = ES + Duration Early Start of the next nodes are compute as follow as ES = Max (EF of the predecessors) BP Start from the last activity. Last Acti. ES will become the LS and EF will become LF Next node-> LF (Late Finish) -Duration = LS (Late start) EF = Min (Late Finish of the successor activity)

Forward Pass/Backward Pass

2 2/3 1 6 12/18

0/2

C A 11/12

G 12/18 7/12

ES/EF

1/3

3/7 3 E 5 4 12/16 I H 14/18 7/15 18/21 18/21

3 0/3

D 3/7

7/12 8

0/3 LS/LF F 10/18

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Float calculation
Job A B C D E F G H I Duration 2 3 1 4 5 8 6 4 3 ES 0 0 2 3 7 7 12 12 18 EF 2 3 3 7 12 15 18 16 21 LS 1 0 11 3 7 10 12 14 18 LF Total Float 3 1 (LS ES or LF EF) 3 0 12 9 7 0 12 0 18 3 18 0 18 2 21 0

Float Interpretation

Successors
Early
EARLY Free

Late
Total

Predecessors
LATE Independent Safety Total : Predecessor start as early as possible and successor start as late as possible Independent : Predecessor start as late as possible and successor start as early as possible Free : Predecessor and Successor start as early as possible Safety : Successor start as late as possible and predecessor start as late as

Float 0 indicate critical Patch ( B-D-E-G-I)

Difference b/w Total float and free floats

THREE TYPES OF FLOATS INDEPENDENT FLOAT (IF) Shows the time available even if an activity has a Late Start and Early Finish. It is most adverse type of float and often results in a negative figure. FREE FLOAT (FF) Also called Normal Float, it shows time for which an activity can be delayed without delaying the early start of successor activity/activities. If there are more than one succeeding activities, minimum of the floats would be taken as free float. FF will always be less than or equal to TF and never more. In all critical activities, FF is always zero. TOTAL FLOAT (TF) It shows time for which an activity can be delayed from its ES without delay in project completion. (In FF, when one activity was delayed, the succeeding activity was started on time as per its ES and not delayed.) As in FF, in case of more succeeding activities, minimum to be taken. in TF, however, if one activity is delayed, the succeeding activity or activities would be affected or re-scheduled. On Critical Activities, TF is always zero ( as well as FF) Different b/w Free and Total Floats LS/LF

Computation of Float
Slack on pre. Node = Max (LF of pre. ) - ES ES/EF Slack on suc. Node = LF Min (ES of succ.)
K1 ES/EF i1 K2

J1 I2 K3 LS/LF I3

Total float is the amount of time that a schedule activity can be delayed from its early start date without missing the project finish date or violating any schedule constraints. The free float is the time that a schedule activity can be delayed without delaying the early start date of any subsequent activities. In determining the amount of float in a task, you need to look at both types of float.

Floats for the example

Job A B C D E F G H I Total 1 0 9 0 0 3 0 2 0 Safety 1 0 8 0 0 3 0 2 0 Free 0 0 9 0 0 3 0 0 0 Independent 0 0 8 0 0 3 0 0 0

Float Computation For Node A

Total Float = LS - ES = LF EF = 1 Saf. Float =Total Float [Max (LF of Pre. Node) ES] = 1 (0-0) = 1 Free Float = Total Float [LF Min (ES of Succ.node)] = 1 (3-2) = 0 Inde. Float = Total Float - Both the latter Terms = 1 (0+1) =0

0/2 c A

2/3

1/3 D

3/7

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Float For Activity C

Total Float = LS - ES = LF EF = 9 Saf. Float =Total Float [Max (LF of Pre.) ES] = 9 (3-2) = 8 Free Float = Total Float [LF Min (ES of Succ.)] = 9 (12-12) = 9 Inde. Float = Total Float - Both the latter Terms = 9 (1+0) =8 12/18 ES/EF

Float For Activity F

Total Float = LS - ES = LF EF = 3 Saf. Float =Total Float [Max (LF of Pre.) ES] = 3 Free Float = Total Float [LF Min (ES of Succ.)] = 3 = Inde. Float = Total Float - Both the latter Terms =3 = =

G ES/EF 2/3 18/21 A LS/LF 7/15 C 12/16 ES/EF D H LS/LF 3/7 10/18 F I

1/3 11/12

Precedence Diagram Method

Generalized Precedence Relationship -Start to Start (SS) -Finish to Finish (FF) -Start to Finish (SF) -Finish to Start (FS) Lag 0

SS Start Start (Lag)

Constraint is in only in Start
u2 U1 v2

U1

V1 U2

Activity U SS Lag Activity v

V1

V2

FF Lag

Project Scheduling with Probabilistic Activity Times

Uncertain Activity Duration For each activity in the Project three time estimates are obtained . - Optimistic (Best scenario) - a - Most likely (Middle of the both) - m - Pessimistic (Worst Scenario) b Mean of activity duration = ( a + 4m+b ) /6 Variance of the duration = Square((b-a)/6) Standard Deviation of activity duration = Sqrt of variance = (b-a)/6
Activity v

u2

U1

v2

U1

V1 U2

Activity U SS Lag

Beta distribution is used in Probabilistic.

V1

V2

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Why Project Networks

A convenient way to show activities and precedence in relation to the whole project - Basis for the project planning. - Responsibility Allocation - Definition of sub contracting units - Role of different players Basic scheduling and establishment of work time tables

Why project networks..cont.

Critical Path determination and selective management control. Resource planning for projects
- Project crashing with time cost tradeoffs - Resource aggregation - Resource leveling - Limited resource allocation Project Implementation -Time table for implementation, - Monitoring and reporting Progress - Updating schedules and resources -Co-ordination of different work with Agencies.

Project Networks
Project network is thus a common vehicle for planning ,communicating and implementing the project right from the beginning.

Example
- Organizing one day seminar
Decide data, venue and budget for seminar Identify speakers and participants Contact the speakers and finalize the dates Print seminar brochure Mail brochure to tentative participants Estimate no of participants Decide menu for lunch ,tea and coffee. Arrange Catering Arrange Projection facility at venue Receiving guest at registration , Conduct seminar and Send of all

Organizing one day seminar

Example 2
Job
A B C D E

Activities Predecessors A1.Decide data, venue and budget for seminar ---A2.Identify speakers and participants ---A3.Contact the speakers and finalize the dates A2 A4.Print seminar brochure A1,A3 A5.Mail brochure to tentative participants A4 A6.Estimate no of participants A5 A7.Decide menu for lunch ,tea and coffee. A6 A8. Arrange Catering A1,A7 A9. Arrange Projection facility at venue A6 A10. Receiving guest at registration A8 ,A9 A11.Conduct seminar A8 A9 A10 A12. See off Guests A11

Predecessors

A,B B,C

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Scheduling with AON

Basic Scheduling computations can be done on both AOA and AON AON networks are simple to draw There are no float anomalies in AON network. AON networks are more popular in Computer packages Lead Easily to PDM (Precedence Diagramming Method (SS,SF,FS,FF)
Job A Predecessors -

Example
Durations 2

Consistency and Redundancy in Project Networks

Project Network should not contain any cycles If the project network contains any cycles that network is called inconsistency network. d 2 a 4 c 1 e b 3

Inconsistency Project Networks

Cycle exists in this network

a
1

2 c

d 4 e 3

Methods of consistency checking

Topological ordering of activities activity list is used Fulkersons numbering rule-AON or AOA Squaring adjacency matrix Not N/w Maromonts procedure Adjacency or Network

Topological ordering
Select the job which has no predecessors and place it on top of the list step 1 Delete the job just placed from the predecessor list of remaining jobs step 2 Identify any new source step 3 Again repeat step 2 till 1> There are no sources on the list of remaining jobs . This shows the presence of inconsistency in the network 2 >All jobs are placed in the list ,which now topologically ordered showing there are no inconsistencies.

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Example 1
Consistency Network :
Job Predecessors A1 A2 A3 A1 A4 A1 A5 A2,A3 This is Topologically ordered list Job A1 A2 A3 A4 A5 Predecessors A2,A5 A1,A3 A4

Example 2
Inconsistency Network :

This is Not Topologically ordered list

A1
1

2 A3

A4 4 A5 3
1

A1 A2

2 A3

A4 4 A5 3

A2

Fulkersons Numbering rule

Step 1 : Identify the source node(s) in the network and number them sequentially from 1 onwards Step 2: For each numbered node delete the outgoing arcs and identify the new source Step 3 : Number the newly discovered source sequentially Continue the step 3 till any one of the below 1>All the nodes are numbered indicating the consistency in the network. 2> The absence of the sources in the unnumbered nodes indicating the inconsistency.

Example 1
Fulkersons Numbering Rule Step 1

Fulkersons Rule
Step 2

Fulkersons Rule

2 1

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Matrix Representation
No source ..Unable to Number.. Inconsistency exists in the network 1 2 3 4

??

1 0 0 0 0

2 1 0 0 0

3 1 1 0 0

4 0 1 1 0

2 A1 4 A3 1 A2 3 A5

Node Arc Incidence Matrix

1 2 3 4 a1 -1 1 0 0 a2 -1 0 1 0 a3 a4 0 0 -1 - 1 0 0 1 1 a5 0 0 -1 1
2 A1 4 A3 1 A2 3 A5

Circuit Matrix
a1 L1 1 L2 0 L3 1 a2 -1 0 -1 a3 1 -1 0 a4 0 1 1 a5 0 -1 -1
2 A1 4 A3 1 A2 3 A5

Matrix Squaring Procedure

- Multiply the adjacency matrix itself (N-1) times. - If 1 appears in the diagonal means it is inconsistency in the network.
M=

Matrix Squaring Procedure

1 2 3 4

1 0 0 0 0

2 1 0 0 1

3 0 1 0 0

4 1 0 1 0

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Squaring Matrix
1 2 3 4 M 1 2 3 0 1 0 0 0 1 0 0 0 1 0 0 4 1 0 1 0 X M 1 2 3 4 1 0 1 0 1 2 0 0 1 0 3 4 0 0 0 1 0 0 1 0 = Sq(M) 1 2 3 1 0 1 1 2 0 0 0 3 0 4 0 1 0 0 1 M 4 0 1 0 0 1 2 3 4 1 0 0 0 0 2 1 0 0 1 3 0 1 0 0 4 1 1 0 = 2 1 0 3 4 1 0 0 0 0 M3 2 0 1 0 0 3 1 0 1 0 4 1 0 0 1 X

Assignment
Convert this N/W into Matrix Using Adj.squ. matrix Method find out inconstancy.
2 3

-> See the 1s in the diagonal shows that inconsistency exists in this network -> Indicated that 2nd ,3rd and 4th nodes are having loop and inconstancy

Assignment
Convert this N/W into Matrix Using Adj.squ. matrix Method find out inconstancy is there or not. Find M4 and show the result
2 3 1

Marimonts Procedure
Draw the network diagram Number the Nodes Name the arcs Remove the source and Sink Node and Arc cant be deleted means ..Residual network exists and inconsistency exists

Marimonts Procedure
3 4

Marimonts procedure using Matrix

Prepare the network for the above example Identify the source and sink Remove the source column (All 0s) and associated row (All may 0 May not 0) Continue the above step If you are unable to remove all the columns an row ..Inconsistency exists.

6
2 5

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Matrix For Marimonts

1 1 2 3 4 5 6 7 0 0 0 Source 0 0 0 0 2 1 0 0 0 0 0 0 3 1 0 0 0 0 0 0 4 0 1 1 0 0 1 0 5 0 1 0 1 0 0 0 6 0 0 0 0 1 0 0 7 0 0 0 0 0 1 0 Sink

Redundancy Check Network

Job
A B C D E F G

Immediate Predecessors
--A A B,C B,D C,D B,D,E,F

Network
Job A B C D E F G Predecessors A B C D E F G X X 0 X X 0 X 0 X 0 0 X X 0 X 0 X

Crossed one are not required ..Redundancy exists (Unnecessary arcs)

F C G D A

X X
B

-> List should be in topological order -> Convert the detail into tabular form as above with cross. Go to each and every cross and find the corresponding jobs and populate the cell with 0 -> If the cell is not empty and already crossed X then highlight ..Highlighted X is redundancy in network..

Time Cost Trade offs in project

Flexibility in activity duration
Normal Duration :Entails least Activity cost. With expenditure of additional resource it is possible to accomplish the activity In shorter duration. The minimum possible duration of the activity is its crash duration, when its cost is highest. For technological reason it is not possible to shorten the duration below the crash limit even by spending more money and resources.

Time-Cost Relationship

Even you spend more money We cant reduce the time Direct Cost Of Job

Normal Cost

Crash Duration

Norma Duration -

Job Duration

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Direct and Indirect Cost

Crash DurationCost will be high C O S T

Activity Direct Cost

Cost of planning and design Raw material Labour cost Manufacturing and labour cost Travel, communication cost Consultation fees.

Normal Duration cost is low Cost

Cost will increase proposition to the Duration

Duration Direct Cost

Duration

Project schedule influence the direct and indirect cost of the Project

Activity Indirect Costs

Managerial services (Admin staff) Indirect supplies (Stationeries etc) Equipment Rentals Allocation of fixed expenses Site office maintenance Indirect cost increase with the duration of the project. Linear

Time Cost Trade off Linear

A I C O S t J

A (Acitivity A)

Lij (Crash Time)

Uij (Normal Time)

Time Cost Tradeoffs

Non Linear (Convex)
A I C O S t J C O S t

Time Cost Tradeoffs

Non Linear (Concave)
A I J

A (Acitivity A)

A (Acitivity A)

Lij (Crash Time)

Uij (Normal Time)

Lij (Crash Time)

Uij (Normal Time)

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Discontinuous-Cost tradeoffs

Discrete Cost tradeoffs

I Technology 3 C O S t A (Acitivity A) Technology 1

J C O S t

By Air By Own Truck By Couriour

Lij (Crash Time)

Uij (Normal Time)

Lij (Crash Time)

Uij (Normal Time)

Heuristics Approach Procedure-I and II

Start with the Normal Project Duration Obtain Critical Path Choose the activity on the critical path which is cheapest to crash. Crash the activity till either another patch become critical or the activity is fully crashed. Procedure II Determine the most economical set of activities to be crashed or relaxed to Reduce the durations all critical paths. No further crashing is possible at least one critical path can not be reduced. When two are more activities on any path are simultaneously crashed ,Some Some previously crashed activity may be relaxed.

Sample Project

F 2 A D

B 4 1

G 5 H

Cost Slope for any Activity

Cost Slope for any Activity =(Crash CostNormal cost) /(Normal Duration-Crash Duration)

Time and Cost Data

Activity Normal Crashed Cost Slope --------------------------------------------------------------------------------------------------------------------Days Rs Days Rs RS/Day --------------------------------------------------------------------------------------------------------------------A 4 100 3 200 100 ( 200-100)/(4-1) B 7 280 5 520 120 C 3 50 2 100 50 D 2 200 3 360 80 E 2 160 2 160 Infinity F 10 230 8 350 60 G 7 200 5 480 140 H 2 100 1 200 100

Crash Cost Activity A C O S T Normal Cost Crash Duration Normal Duration

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Computations P1
Identify all the paths in the n/w Find the critical path Crashing has to be done in the critical path. Calculate the Cost Slope for Individual activity Tabulate the same -> All paths in the row -> All Activity in Column -> End of the row mention the total length of the path -> End of the column mention the how many days can be crashed -> In each cell mention the Cost slope of the activity

Computations P1
Activities Length Paths A B C D E F G H ADG 100 80 140 16 * (Critical Path) AF 100 60 14 BG 120 140 14 CEG 50 X 140 12 CH 50 100 5 ----------------------------------------------------------------------------1 2 1 2 0 2 2 1

Computation P2
Activities Length Paths A B C D E F G H ADG 100 80 140 14 * AF 100 60 14 * BG 120 140 14 * CEG 50 X 140 12 CH 50 100 5 ----------------------------------------------------------------------------1 2 1 0 0 2 2 1 - Activity Ds Cost slope is low. We have to choose first. - If we crash D we can reduce 2 days but we have to spend (80*2)=160 - Path length will change from 16 to 14 and D crash time become 0 - There are 3 critical paths . All are having 14 values

P3
Activities Length Paths A B C D E F G H ADG 100 80 140 13 * AF 100 60 13 * BG 120 140 13 * CEG 50 X 140 11 CH 50 100 5 ----------------------------------------------------------------------------0 2 1 1 0 2 1 1 We have to take all the 3 paths now AB (220) 1 (Minimum of AB) AG (240) -> 1 ( Min of AG) FG (200) -> 2 (It is cheapest ..But it is not optimal) DFB (260) D cant be crashed ..This option is not available New Option -> Crash AG by 1 day and relax D by 1 day (Not 2 days) ie (100+140-80)=160..This has become cheap and we have to work on this. D has become again 1 (Relaxed) G has become 1 (2-1) Path CEG become 11 Now Critical paths are same.

P4
Activities Length Paths A B C D E F G H ADG 100 80 140 12 * AF 100 60 12 * BG 120 140 12 * CEG 50 X 140 10 CH 50 100 5 ----------------------------------------------------------------------------0 2 1 1 0 1 0 1
We have to take all the 3 paths now AB (220) 1 (A is already crashed) AG (240) -> 1 (A is already crashed) FG (200) -> 1 (Minimum of F and G) ----We can take this DFB (260)-> 1 (Minimum D F B) G has become 0 F has become 1 from2 All critical path length bcome 12 Again 3 critical path

P5
Activities Length Paths A B C D E F G H ADG 100 80 140 AF 100 60 BG 120 140 CEG 50 X 140 CH 50 100 ----------------------------------------------------------------------------0 1 1 0 0 0 0 1
We have to take all the 3 paths now AB (220) 1 (A is already crashed) AG (240) -> 1 (A is already crashed) FG (200) -> 1 (G is already crashed) DFB (260)-> 1 (Minimum D F B) - Only option available D has become 0 F has become 0 B has become 1 All critical path value from 11 ADG Cant be crashed further because all A and D and G -Project cant be reduced further.11 day is the crash day.

11 * 11 * 11 * 10 5

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Pareto Optimal Frontier

260 780 P5 Crash BDF

Pareto Optimal Frontier

The total direct cost ,Z vs Project duration, T is a piece wise linear Convex function with progressively non decreasing slopes as the project Compress from normal to crash duration The above feature is found whenever the activity-cost trade off is linear.

200 520

P4

Crash A,G by 1 day

Crash 1 day on AG and Relax 1 day on D 160 (100+140-80) 320 80*2 160 P3 Crashed D by 2 days

P2

P1 12 13 14 15 16

11

Managerial Decision on Z-T Curve Bounds of project duration and cost. Minimum budget for the project duration Minimum duration achievable for given budget The total project cost curve (Direct and indirect ) The project duration and schedule to achieve the minimum project cost (Graph for direct cost ,indirect cost and total cost)

Resource-Profiling
Project Network Activity Times

Non Renewable Resources

In nonrenewable resources the total resource consumption over the entire planning horizon is of concern.
Activity resource data

A C T I V I T Y

A1 A2

Resource 5 Resource 7 Resource 3 A3 Schedule Time No of resource required 3 No of resource required 10 Resource Usage Profile

No of resource required 15 RU ES 15 SA OG 10 UE 3 R C E Time

RU ES 15 SA OG 10 UE 3 R C E Time

Renewable resources
In renewable resource the concern is with the total resource usage at each point of time

Non Renewable Resource

Money, Fuel, Energy and Raw Materails - Time cost trade offs is used . Objective : To minimize the total consumption of non-renewable resources Over the feasible range of Project Durations.

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Renewable resources
Manpower , Machines , Power - Resource Aggregation (What are the resource required during the schedule) - Resource Leveling (Change the schedule to get better profiling) - Limited resource allocation (Minimize the project duration)

Resource Aggregation
To construct resource usage profiles from The project schedule and activity resource data.

R(t)

Resource Levelling
To smoothen the resource usage profile By shifting the slack jobs without worsening Project duration.
Original Profile Job has been shifted to get better profile R(t) R(t)

Resource Allocation
By shifting the duration we can maintain the profile.
Resource Limited More resource is required Original Profile

Job has been shifted to get better profile

Original t t

Changed Duration

Team Building
Projects are executed by the people Projects are managed by people working together as a team. Network technique should not be viewed as merely mathematical tool for planning and controlling the schedule for the projects. Network technique should be an integral part of the total process of team building.

Project Management Process

Initial project team assembly - Introduction - Goal explained - Rough Network Some issues debated - Who are all will be in the team - Would would each member contribute

Nature of Project Teams The project team is usually a new, temporary group with out previous experience working together. Complex projects require complex teams with the set of work rules and norms. High degree of learning and interdependency requires a well functioning cohesive teams.

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Project Management Process - II

The group will construct and idealized Network. The preparation of Idealized network would be done with the participation of the team members, giving them opportunity to know each others view. Involve the people right from the goal setting stage.

Project Management Process - III

Iterate towards the realistic plan through negotiations with each other and project team. Here practical constraints and limitations would be brought up by the members from their own area of expertise and experience. This is the participative Process.

Project Management Process IV

Continue the process of negotiation until the feasible solution is found. This will become the initial project plan with which project execution starts.

Aspects of team development

When the people from different department are assembled for the project they form a temporary social system and as it is new there is no system of customs that indicate proper behavior while working on the project. Each persons will bring his/her own set of customs ,belief and perception to the project.

Operating Culture
Group Mind. Common set of objectives. Explicit Vs Implicit contract.
-

Group Maturation
Forming (First meeting)- They are individuals Purpose is not clear leadership pattern and Life span , hand shaking. Storming (Conflict stage), fight and negotiations some clarity stage Norming : Norms and Practices. Performing : Team is started performing.

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Leadership styles
Structuring
- Organize and direct the work of others. - Make each person accountable - Demonstrate Coaching - Tutoring - Role model - Joint effort Encouraging -Greater responsibility with doer -Recognize and praise the good work. Delegating Motivating by giving control

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