PROJECT MANAGEMENT. Systems, Principles, and Applications. Taylor & Francis Group Boca Raton London New York

Transcription

1 PROJECT MANAGEMENT Systems, Principles, and Applications Adedeji B. Badiru C R C P r e s s Taylor & Francis Group Boca Raton London New York CRC Press is an imprint of the Taylor & Francis Group, an informa business

2 Preface Acknowledgments Author xvii xix xxi 1. Systems Principles for Project Management 1 Lessons from Classical Control Systems 1 Improved Organizational Performance 2 Definition of Systems Engineering 4 Project Systems Logistics 5 Systems Constraints 5 Systems Influence Philosophy 7 Systems Value Modeling 8 Example of Value Vector Modeling 9 Management by Project 11 Integrated Systems Implementation 12 Critical Factors for Systems Success 13 Early Systems Engineering 14 DODAF Systems Architecture for Project Management 14 Grand Challenges for Engineering 15 Systems View of the Grand Challenges 16 Body of Knowledge Methodology 17 Components of the Knowledge Areas 18 Step-by-Step and Component-by-Component Implementation 20 Project Systems Structure 23 Problem Identification 23 Project Definition 23 Project Planning 23 Project Organizing 23 Resource Allocation 24 Project Scheduling 24 Project Tracking and Reporting 24 Project Control 24 Project Termination 25 Project Systems Implementation Outline 25 Systems Decision Analysis 28 Step 1. Problem Statement 28 Step 2. Data and Information Requirements 29 Step 3. Performance Measure 29 Step 4. Decision Model 29 Step 5. Making the Decision 30 Step 6. Implementing the Decision 30 Group Systems Decision-Making Models 31 Brainstorming 32 Delphi Method 32 vii

3 viii Contents Nominal Group Technique 34 Interviews, Surveys, and Questionnaires 35 Multivote 35 Systems Hierarchy 36 D-E-J-I Model for Project Execution 40 Design Stage of D-E-J-1 41 State Transformation 42 Evaluation Stage of D-E-J-I 44 Half-Life Computation for Learning Curves 45 Justification Stage of D-E-J-I 47 Integration Stage of D-E-J-I 48 Computational Example.- 51 Exercises 52 References Systems-Wide Project Planning 55 Project Planning Objectives 55 Time-Cost-Performance Criteria for Planning 60 Systems Levels of Planning 60 Components of a Plan 61 Motivating the Project Team 63 Axiom of Theory X 63 Axiom of Theory Y 64 Maslow's Hierarchy of Needs 64 Hygiene Factors and Motivators 65 Management by Objective 66 Management by Exception 67 Project Feasibility Study.-; 67 Scope of Feasibility Analysis 68 Contents of Project Proposals 69 Proposal Preparation 70 Proposal Incentives 72 Budget Planning 72 Top-Down Budgeting 73 Bottom-Up Budgeting 73 Zero-Base Budgeting 74 Project Work Breakdown Structure 74 Legal Systems Considerations 75 Systems Information Flow Cost and Value of Information // Triple C Model 79 Communication 80 Complexity of Multi-Person Communication 86 Cooperation 87 Coordination 89 Resolving Project Conflicts with Triple C 90 Classical Abilene Paradox 92 Exercises 94 Reference 94

4 ix 3. Project Systems Organization 95 Environmental Factors in Project Organization 95 Issues in Social and Cognitive Domains 96 Leadership Development 96 Preparing the Project Personnel 96 Project Office 97 Organizational Breakdown Structure 97 Selecting an Organization Structure 97 Formal and Informal Structures 99 Span of Control 99 Functional Organization 100 Product Organization Matrix Organization Structure 103 Mixed Organization Structure 105 Alternate Organization Structures 106 Bubble Organization Structure 106 Market Organization Structure 106 Chronological Organization Structure 107 Sequential Organization Structure 107 Military Organization Structure 108 Political Organization Structure 108 Autocratic Organization Structure 109 Project Transfer Organization 109 Organizing Multinational Projects 112 Exercises Project Scheduling 117 Fundamentals of Network Analysis 117 Critical Path Method 121 CPM Calculation Example 123 Forward Pass 123 Backward Pass 124 Determination of Critical Activities 125 Using Forward Pass to Determine the Critical Path 128 Subcritical Paths, 128 Gantt Charts 129 Gantt Chart Variations 131 Activity Crashing and Schedule Compression 132 PERT Network Analysis 138 PERT Estimates and Formulas 139 Beta Distribution 141 Triangular Distribution 142 Uniform Distribution 143 Distribution of Project Duration 144 Central Limit Theorem 144 Probability Calculation 145 PERT Network Example 146 Precedence Diagramming Method 148 Anomalies in PDM Networks 154

5 Complexity of Project Networks 155 Example of Complexity Computation 159 Evaluation of Solution Time 160 Performance of Scheduling Heuristics 160 Formulation of Project Graph 161 Depth-First Search Method 162 Activity-On-Arc Representation 163 Exercises Systematic Resource Allocation 173 Resource Allocation and Management 173 Resource-Constrained Scheduling : 174 Resource Allocation Examples 175 Longest-Duration-First 176 Resource Allocation Heuristics 177 Activity Time 177 Activity Resource 178 Time Resources 178 GENRES 178 Resource over Time 178 Composite Allocation Factor 179 Resource Scheduling Method 180 Greatest Resource Demand 180 Greatest Resource Utilization 181 Most Possible Jobs 181 Other Scheduling Rules 181 Example of ACTIM 182 Comparison of ACTIM, ACTRES, and TIMRES 183 Quantitative Modeling of Worker Assignment 184 Takt Time for Activity Planning 188 Tips for Using Takt Time 190 Resource Work Rate 190 Work Rate Examples 192 Resource-Constrained PDM Network 193 Critical Resource Diagram 194 Resource Management Constraints 195 CRD Network Development 195 CRD Computations 196 CRD Node Classifications 196 Resource Schedule Chart 197 CRD and Work Rate Analysis 198 Resource Loading and Leveling 199 Resource Leveling 200 Resource Idleness Graph 200 Probabilistic Resource Utilization 201 Learning Curve Analysis : 203 The Log-Linear Model 204 Average Cost Model 204 Unit Cost Model 207

6 xi Graphical Analysis 209 *> Multivariate Learning Curves 211 Bivariate Example 213 Interruption of Learning 215 Learning Curves in Health-Care Projects 216 Exercises 217 References Project Control System 225 Elements of Project Control 225 Factors Affecting Time 226 Factors Affecting Performance Factors Affecting Cost 227 Control Steps 228 Formal and Informal Control 228 Schedule Control 230 Project Tracking and Reporting 230 Performance Control 234 Continuous Performance Improvement 235 Cost Control 237 Information for Project Control 238 Measurement Scales 239 Data Determination and Collection 241 Data Analysis and Presentation 243 Raw Data 243 Total Revenue 244 Average Revenue 246 Median Revenue 248 Quartiles and Percentiles 248 Mode 249 Range of Revenue 249 Average Deviation 250 Sample Variance 251 Standard Deviation 252 Control Charts Statistical Analysis for Project Control 258 Sampling Techniques 259 Sample 259 Diagnostic Tools 264 Probabilistic Decision Analysis 266 Normal Distribution 267 Decision Trees 270 Project Control through Rescheduling 277 Experimental Analysis for Project Control 278 Personnel Interactions for Experimentations 278 Need for Project Experimentation 279 Experimental Procedure 280 Types of Experimentation 282 Hypothesis Testing 282

7 xii Contents One-Tailed versus Two-Tailed Hypothesis Testing 283 Producer's Risk versus the Consumer's Risk 285 Control through Termination 285 Project Control Verification and Validation 286 What Is Verification? 286 What Is Validation? 286 What to Validate 287 How Much to Validate 287 When to Validate 287 Verification and Validation Stages 287 Factors Involved in Validation 288 How to Evaluate the System Sensitivity Analysis for Project Control 289 Exercises Project Systems Modeling and Optimization 293 Project Modeling 293 General Project Scheduling Formulation 294 Linear Programming Formulation 295 Activity Planning Example 296 Resource Combination Example 298 Resource Requirements Analysis 300 LP Formulation 301 Integer Programming Approach for Resource Scheduling 302 Time-Cost Trade-Off Model 305 Maximum Flow Procedure 306 Time-Cost Trade-Off Procedure 307 Sensitivity Analysis for Time-Cost Trade-Off 313 Knapsack Problem 314 Knapsack Formulation for Scheduling 315 Example of Knapsack Activity Scheduling 316 Transportation Problem for Project Scheduling 319 Balanced versus Unbalanced Transportation Problems 321 Initial Solution to the Transportation Problem 321 Northwest-Corner Technique 322 Transportation Algorithm 323 Example of Transportation Problem 325 Transshipment Formulation 329 Assignment Problem in Project Optimization 330 Example of Assignment Problem 331 Traveling Resource Formulation 333 Nearest Neighbor Algorithm Opt Technique 335 Shortest-Path Problem 335 Goal Programming 337 Resource Allocation Using Simulated Annealing 340 Exercises 343 References 348

8 xiii 8. Cost Systems Analysis 349. Economic Analysis Process 349 Simple and Compound Interest Rates 349 Investment Life for Multiple Returns 351 Nominal and Effective Interest Rates 353 Cash-Flow Patterns and Equivalence 355 Compound Amount Factor 356 Present Worth Factor 356 Uniform Series Present Worth Factor 357 Uniform Series Capital Recovery Factor 357 Uniform Series Compound Amount Factor 358 Uniform Series Sinking Fund Factor 359 Capitalized Cost Formula 359 Permanent Investments Formula 361 Arithmetic Gradient Series 361 Increasing Geometric Series Cash Flow 363 Decreasing Geometric Series Cash Flow 364 Internal Rate of Return 366 Benefit-Cost Ratio 366 Simple Payback Period 368 Discounted Payback Period 369 Fixed and Variable Interest Rates 371 Amortization of Capitals 372 Equity Break-Even Point 374 Analysis of Tent Cash Flows 376 Special Application of Arithmetic Gradient Series 377 Design and Analysis of Tent Cash-Flow Profiles 377 Derivation of General Tent Equation 382 Multi-Attribute Project Selection 384 Utility Models 385 Additive Utility Model 387 Multiplicative Utility Model 388 Fitting a Utility Function Polar Plots 393 Analytic Hierarchy Process 399 Cost Benchmarking 404 Exercises 406 References Advanced Topics in Project Planning and Control 409 Forecasting Techniques 409 Forecasting Based on Averages 410 Simple Average Forecast 410 Period Moving Average Forecast 410 Weighted Average Forecast 410 Weighted T-Period Moving Average Forecast 411 Exponential Smoothing Forecast 411 Regression Analysis 412 Description of Regression Relationship 412

9 xiv Contents Prediction 413 Control 413 Procedure for Regression Analysis 413 Coefficient of Determination 414 Residual Analysis 415 Time Series Analysis 416 Stationarity and Data Transformation 418 Moving Average Processes 421 Autoregressive Processes 422 Classical Inventory Management 424 Economic Order Quantity Model 425 Quantity Discount 426 Calculation of Total Relevant Cost 427 Evaluation of the Discount Option 427 Sensitivity Analysis 429 Wagner-Whitin Algorithm 430 Notations and Variables 431 Propositions for the Wagner-Whitin Algorithm 432 Computational Example of Wagner-Whitin Algorithm 432 Silver-Meal Heuristic 434 Seasonal Pattern Modeling 437 Modeling Approach 437 Standard Cyclic PDF 438 Expected Value 439 Variance 439 Cumulative Distribution Function 440 General Cyclic PDF '. 440 Application Examples.: 441 Exercises ; Advanced Techniques for Multiresource Scheduling 447 Notations Used in the Methodology 447 Analysis of Project Resources 448 Resource Modeling Background 449 Multiresource Methodology 450 Representation of Resource Interdependencies and Multifunctionality 450 Modeling of Resource Characteristics 452 Resource Mapper 454 Activity Scheduler 456 Model Implementation and Graphical Illustrations 462 Sequence-Based Scheduling and Function-Based Scheduling 465 References Case Examples and Applications 467 Case Example: Project Systems View of World Economy 467 Global Systems View of the World 469 Economic Interdependence Model 469 Hybridization of Cultures 470 Market Integration as a Factor of Deterrent 471

10 xv Pursuit of Global Awareness for the Sake of Deterrent 471 Questions for Overseas Economic Engagement 471 Questions for Assessing Local Conditions 472 Questions for Economic-Cultural Nuances 472 Questions for Geographic Awareness 472 Questions for General Assessment 473 Labor as a Vehicle of Mutual Development 473 Awareness of Overseas Workforce Constraints 474 Hierarchy of National Needs 475 Prevention Is Better than Correction 476 Empathy, Sympathy, and Compassion Instead of Apathy 476 Educate.: 477 Engage 477 Empower 477 Sustainability of Global Alliances 477 Summary of the Case Example 477 References 478 Case Application: Coordination of Multinational Projects 479 Project Setting, 479 Technical Requirements 479 Organizational Relationships 480 Safety and Environmental Considerations 481 Analysis of Project Scenario 481 Sources of Possible Problems and Solutions 481 Strategic Planning 483 Cost/Benefit Analysis 483 Technology Assessment 484 Acquisition 484 Trade Agreements 484 Different Labor Practices 484 Different Governmental and Political Ideologies 484 Information Management 484 Recommendations 485 Appendix A: Project Formulas 487 Appendix B: Project Management Acronyms 517 Appendix C: Project Terms and Definitions 527 Index 559