Resource estimation and allocation happens to be one of the most crucial make/break points for most projects. However, this detail usually gets underestimated by project managers which consequently become evident in their lack of efficiency and effectiveness in the tasks they oversee. This lecture brings out a few techniques (scientific) as to how PMs can easily navigate their way through this difficulty.

1. Sources
•www.mindtools.com
•Production and Operations Management (Chapter 12)
by Chase & Aquilans
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2. Outline
Introduction to Project Management
Estimating Time Accurately
Risk Impact /Probability Chart
PERT Analysis
Critical Path Analysis
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3. What is project management
Definition: The planning, directing and controlling of resources to meet
the technical cost and time constraints of a project.
A project is a unique venture with a beginning and an end conducted by
people to meet established goals within parameters of cost, schedule and
quality
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4. Estimating time accurately
Set project deadlines
Determine the pricing and profitability of a project
Steps:
•Elliminate all unknowns (drill-down)
•Guess how long each task will take
•Don’t forget a safety factor – 2X
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5. Managing uncertainties
Projects are often executed in uncertain and risky
environments.
Steps:
•Be conscious of all risks
•Prioritize
•Employ risk management strategies
•Risk impact/probability chart
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6. Risk impact/probability chart
Based on the principle that a risk has two primary dimensions:
Probability - A risk is an event that "may" occur. The probability may range
between 0% and 100%
Impact - A risk always has a negative impact. The size of an impact varies by
•Cost
•Health
•Human life
•Some other critical factor
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7. Risk impact/probability chart
The extreme corners of the chart gives us:
•Low impact/Low probability risk
•Ignore
•Low impact/High probability risk
•Eliminate likelihood of occurrence or cope
•High impact/Low probability risk
•Try reducing impact
•Have a contingency plan
•High impact/High probability risk
•These are your topmost priority so spend more
time and resources to reduce their impact and
Source: www.mindtools.com
certainty
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8. Project Evaluation and Review Technique
(PERT) analysis
PERT biases time estimates away from the unrealistically short time-scales
normally assumed.
Estimated time is calculated as followed:
shortest time + 4 x likely time + longest time
-----------------------------------------------------------
6
To use this technique…
•List all activities required to complete the project in a WBS
•Estimate the time and cost each activity will take to complete
•Outline the dependencies between activities
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9. Project Evaluation and Review Technique
(PERT) analysis
Time estimates Expected
Activity Predecessor
Opt. (O) Normal (M) Pess. (P) time
A — 2 4 6 _
B — 3 5 9 5.33
C A 4 5 7 5.17
D A 4 6 10 6.33
E B, C 4 5 7 5.17
F D 3 4 8 _
G E 3 5 8 5.17
Used more in projects where time, rather than cost, is the major factor.
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10. Critical Path Analysis (CPA)
CPM calculates the longest path of planned activities to the end of a
project, and the earliest and latest that each activity can start and
finish without making the project longer.
Two main objectives:
•Critical path(i.e., activities with the longest path)
•Sub-critical paths (i.e., activities that can be delayed without
making the project longer)
The critical path is the sequence of project network activities which
add up to the longest overall duration.
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11. CPA continued
To use this technique…
•List all activities required to complete the project in a WBS
•Estimate the time and cost each activity will take to complete
•Outline the dependencies between activities
•Draw your project network diagram
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12. Project network diagram
7, 12
4, 7 D 12, 16
5
B H
3 4
0, 4 7, 8 16, 22
A E I
4 1 6
4, 6 9, 13
C G
2 6, 9 4
F
3
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13. Focus on the critical path
7, 12
4, 7 D 12, 16
5
B H
3 4
0, 4 7, 8 16, 22
A E I
4 1 6
4, 6 9, 13
C G
2 6, 9 4
F
3
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14. Time cost trade-offs
Direct cost: Costs directly associated with project activities. Example, salaries.
Increases as project time shortens
Indirect cost: Overhead costs not directly associated with a specific project.
Example, office space. Decreases as project time shortens
Crash cost: This refers to acceleration of a project in order to complete the project
sooner
Cost/unit time for crashing = Crash Cost – Normal Cost
Normal Time – Crash Time
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15. CPA continued
Determining the total crashing cost
Activity A = 2 ($500) = $1,000
Activity D = 1 ($2000) = $2,000
Total Crashing Cost = $3,000
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16. Summary
Introduction to Project Management
Estimating Time Accurately
Risk Impact /Probability Chart
PERT Analysis
Critical Path Analysis
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17. Thank you
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