25Project management

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1 5Project management A Activity 5.1 (page ) 1 Verify the ESTs above by working through the diagram from left to right, taking the longest route, in days, to each node. Node EST = = = = = = = Activity 5. (page 7) 1 Verify all of the LFTs by your own calculation. Node LFT = 38 3 = = = = = = 0 Activity 5.3 (page 8) 1 Draw the network for Project X. [] G A B 10 D F 5 H C E 9 Network for Project X Chapter 5 Cambridge University Press 010 1

Node 1 3 5 7 8 EST 0 0 + 8 = 8 0 + 8 + 1 = 0 + 8 + 1 = 0 0 + 8 + 1 + 10 = 3 0 + 8 + 1 + 10 + 3 = 35 0 + 8 + 1 + 10 + 3 + 3 = 38 0 + 8 + 1 + 10 + 3 + 3 + = Activity

2 Use the duration times to calculate the EST and LFT of each activity. [] A B C D E F G H EST LFT Identify the critical path. [] ABDFH Explain the importance of this critical path to the operations manager. [] This identifies the minimum time for completing the project. Critical activities must finish on time for the project to be completed on time. Critical activities have no total float they cannot be delayed without delaying the completion of the project. The operations manager will know that s/he needs to carefully monitor the progress of critical activities to ensure that the project is not delayed. If any critical activity is delayed, the operations manger will seek to divert resources from non-critical activities to try and get critical activities back on track. Activity 5. answer provided on Student s CD-ROM. Revision case study 1 (page 71): Jamaica Photos Ltd 1 Construct a CP network diagram for this project based on the following information: A is the start of the project B, C and D cannot start until A is complete E follows B, C and D F has no preceding activity F must be completed before I can commence G and H follow E I follows G and H. [] B H 0 A 1 0 C E G 1 I D F 8 Chapter 5 Cambridge University Press 010

Critical activities must finish on time for the project to be completed on time. Critical activities have no total float they cannot be delayed without delaying the completion of the project.

3 Identify the critical path by inserting all ESTs and LFTs. [] Critical path = ABEGI 3 Explain why this critical path must be supervised carefully. [] As critical activities have no total float, it means that any delay in completing an activity will delay the completion of the project. In this case it would mean having a more prolonged adverse impact on production and, therefore, customer delivery times. Calculate all free and total floats for the non-critical activities. [] Free float = EST (next activity) duration EST Total Float = LFT duration EST Activity Free float Total float C D F H Analyse the usefulness of this technique to the project team, considering the possibility of delays occurring on any of the activities. [10] The technique aids the project team to calculate the minimum time for switching production from one site to the other. Identifying the project time will help minimise disruption to production and customers. The analysis provides a clear target for the project team and a basis for awarding a bonus on completion of the closure. If delays occur to critical activities, the analysis will help the project manager identify if there are resources that can be diverted to try and keep the project on time. Knowledge of the LFT provides a useful control tool for the project manager. It identifies when processing at Kingston should be suspended so as to ensure the project is completed in the minimum time. This indicates that as long as processing is suspended, by day the project can be completed within 1 days. To what extent will critical path analysis guarantee that this project will be successfully completed? [1] The analysis does not guarantee that the project will successfully be completed within 15 days. There are a number of reasons why the analysis does not guarantee successful completion of the project; these include: The timings are only estimates. This is a unique project and, therefore, managers cannot be sure exactly how long each element will take. For example, testing the new integrated processing system may take longer than two days because of unexpected difficulties. Machinery could easily be damaged during its dismantling, transport or rebuilding. Chapter 5 Cambridge University Press 010 3

In this case it would mean having a more prolonged adverse impact on production and, therefore, customer delivery times. Calculate all free and total floats for the non-critical activities.

4 The accuracy of the estimates depends on the ability and knowledge of the managers planning the closure. External factors, over which the project team has no control, can affect the closure. For example, contractors used for transporting the machinery may prove to be unreliable. However, it will aid the completion of the project with a minimum of disruption as it will ensure that the project has been planned and consideration given to which activities can be completed simultaneously. It will help identify when resources are needed and at what point activities need to occur. Further, by identifying critical activities, it will help project managers to focus on those activities that have no float, to try and prevent any delay from occurring. Revision case study (page 7): Network diagram 1 Calculate all ESTs and LSTs for the network shown in the above figure. [] Node EST LST Calculate the duration of the critical path. [] Critical path = EHKL = 8 days 3 Calculate total floats on all of the non-critical activities. [] Activity Free float Total float A 0 8 B 0 C 8 3 D 0 8 F 0 G 0 8 I 1 J 8 8 Explain the disadvantages to the operations manager of ordering goods needed for task D to arrive on: [] Day 5 The EST for activity D is 0 days, so if goods arrive on day 5, the activity will be delayed. However, this will not delay the completion of the project because activity D has 8 days of float. Therefore, it may be argued that receiving goods on day 5 is much earlier than necessary. As the latest start time for activity D is 8 days, goods could be organised to arrive then. Chapter 5 Cambridge University Press 010

However, it will aid the completion of the project with a minimum of disruption as it will ensure that the project has been planned and consideration given to which activities can be completed

5 Day 15 The EST for activity D is 0 days and, therefore, there is no benefit in ordering the necessary goods to arrive so early as they cannot be used until day 0. This would mean that the business is paying for goods long before it needs to. Essay 1 a Explain why efficient project management is important for a business operating in a competitive market. [10] Project management involves using techniques such as CPA to ensure that a project is completed on time, on budget and to the required quality. In competitive markets, efficient project management is important because: The ability to win contracts may depend on being able to complete a project to a pre-set schedule, e.g. building contracts. There may be financial penalties for late completion. If project management is inefficient, then the firm s activities will be disrupted for longer than necessary. Efficient project management aids planning the use of resources and ensuring their efficient utilisation. b Evaluate the usefulness of critical path analysis to a construction business building a new sports complex to a completely new design. [15] CPA is useful to the construction firm because: It identifies the time when different resources are required on site, e.g. bricks, roofing materials etc. It identifies when labour is required, e.g. bricklayers, electricians etc. This helps prevent labour being idle or contractors arriving too early or too late. It identifies the critical path. The site manager will be able to focus on the critical activities to ensure that they are not delayed. It identifies activities that can be completed at the same time. It identifies the minimum time for completion of the sports complex. CPA works effectively with time-based management as it is a way of focusing upon how time can be minimised. If the customer wants the sports complex finished by a particular date, CPA will indicate whether this is possible. As resources will be managed more efficiently, the building costs will be reduced. In complex projects, CPA is particularly useful as planning is critical to the efficient execution of the project. However, there are a number of weaknesses of CPA, including: As the sports complex is a new design, the accuracy of the timing estimates will be subject to uncertainty. The plans are drawn up in an office and conditions on site might not be as expected, so delays may occur. It is assumed that their own employees and their contractors can meet the targets that have been set. Chapter 5 Cambridge University Press 010 5

[10] Project management involves using techniques such as CPA to ensure that a project is completed on time, on budget and to the required quality.

6 Evaluation may consider: CPA is a planning tool and as such will aid the construction firm to manage its resources effectively. This will help costs to be minimised and profits will be increased for the firm; it will also contribute to providing customer satisfaction as it is more likely that the sports complex will be finished on time. CPA is widely used in the construction industry for the reasons outlined above. However, it is not uncommon for major projects to overrun on time and budget. A notable project on which there was a timemanagement problem was the building of the main stadium for the Olympic Games in Athens in 00 the building was only completed two months before the opening ceremony. However, even where circumstances change or estimates prove inaccurate, CPA is still a useful technique because it forces managers to plan and this will reduce delays and help control costs. Chapter 5 Cambridge University Press 010

finished on time. CPA is widely used in the construction industry for the reasons outlined above. However, it is not uncommon for major projects to overrun on time and budget.

Guidance on Critical Path Analysis

Guidance on Critical Path Analysis OCR GCE in Applied Business Unit F248 (Unit 9): Strategic Decision Making As part of the assessment for Unit F248 Strategic Decision-Making the examination may contain