Project Management &

Economics
Dr Wesam Salah Alaloul
Civil & Environmental Engineering Department
Time management

▪ Defining project activities

▪ Activity scheduling

▪ Create and control the project activities

Time management
Estimates activity duration
Resource requirements: which resources are required for such activity ?
Activity duration # activity work effort
Some activities (e.g. getting authorisation, transportation time) can
require a long time without any work-effort.

Elaborates schedule of activities

Many software tools (MS Project) do the job quite well (in a
deterministic manner)
They offer many outputs (GANTT Chart, PERT … etc)
Time management

▪ Requires activity Activity duration model

definition
▪ Estimates activity
duration
▪ Includes activity
sequencing
▪ Elaborates schedule
of activities
Time management
Estimating with PERT
PERT Formula (Expected Duration)
– =(P+4M+O)/6
Standard Deviation = (P-O)/6
Variance = [(P-O)/6]2

Task O M P PERT Std Dev Variance

Optimistic Most Likely Pessimistic (Expected
Duration)

A 2 4 8 4.3 1 1
days days days days day day
Time management
Network Logic Diagram
A B E
Start
Finish
D F
C

Precedence diagram method ; A, B, C, D, E, F are activities

B
A E
Start Finish
C F
D

Arrow diagramming method ; activities are shown as arrows

Time Management
Scheduling

• Scheduling forces:
– Quantification of discrete effort
– Placement of tasks in proper relationship

• Two most common scheduling presentation forms:

– Bar Charts (Gantt Charts)
– Critical Path Method (CPM) using Precedence
Diagramming Method (PDM)
Time Management
Bar / Gantt Chart Sample

Jan07 Feb07 Mar07

Actual Progress
Apr07 May07 Jun07
Status Date: 02/Mar/2007

25 01 08 15 22 29 05 12 19 26 05 12 19 26 02 09 16 23 30 07 14 21 28 04
WBS Description

Sample Project Plan

1 Literature Search
Ahead of Schedule
2 Concepts Development
Planned Progress
3 Lab Models
Completed Task
4 Design

5 Prototype
Behind
Schedule Time Now
Time Management
Critical Path Method Advantages
▪ Identifies activities that control the project length.
▪ Determines shortest time for completion.
▪ Identifies activities that are critical (i.e. cannot be delayed)
▪ Shows available float for non-critical activities.
▪ Allows evaluation of “what-if” scenarios.
▪ Allows monitoring & control of fast-track projects.
▪ With software can be resource loaded and leveled.
Time Management
Bar/Gantt Charts Defined:

▪ Analyze and specify the basic approach in execution

▪ Segment into reasonable number of activities
▪ Estimate the time required to perform each activity
▪ Manually places activities in time order
✓ Sequential performance
✓ Parallel performance
▪ Adjust to specified completion time
Time Management
Bar / Gantt Charts Advantages:

▪ Plan, schedule and progress are all depicted graphically on a

single chart.
▪ Easily read.
▪ Provides simple way to schedule small undertaking.
▪ Provides summary display of more detailed plans and
schedules.
▪ Best used for management briefings.
Time Management
Bar / Gantt Charts Disadvantages:
• Planning and scheduling are considered simultaneously.
• Simplicity precludes sufficient detail for timely detection of
slippages.
• Activity dependencies cannot adequately be shown.
• Difficult to determine how activity progress delays affect
project completion.
• Difficult to establish and maintain for large projects.
Time Management
Critical Path Method Disadvantages

▪ Only as good as the effort put forth to properly model the

plan.
▪ Can be difficult to properly update.
▪ Can be easily misused.
▪ May lead to a false sense of security.
▪ Actual conditions may necessitate significant modifications
to model to accurately reflect reality.
Time Management
Precedence Diagramming Method (PDM)
PDM network rules:
– Activities are represented by boxes or nodes that are assigned
properties of the activity they represent.
– Precedences are shown by arrows that have both direction and
time properties.
– Precedences consist of two parts: A relationship and a lag value or
constraint.
• Finish – to – Start FS
Lag = x Days
• Finish – to – Finish FF ( a negative lag is
• Start – to – Start SS called a lead)
• Start – to – Finish SF
Time Management
PDM – Precedence Diagram

PDM activities are comprised of:

– Activity descriptions
– Nodes representing the activity
– Arrows representing relationship / dependency
– Points indicating direction of relationship / dependency
Time Management
PDM Logic Relationships

Finish to Start (FS) – Activity A must Finish before Activity B may Start.
The lag is usually zero. FS is the most common type.

Activity A Activity B

Start to Finish (SF) – Activity A must start before Activity B may Finish. The
lag is usually greater than either activity duration. SF is the least common type.
Activity A Activity B
Time Management
PDM Logic Relationships
Finish to Finish (FF) – Activity A must Finish before Activity B may Finish or finish together.
The lag value is usually greater than zero. FF is a less common type.

Activity A Activity B

Start to Start (SS) – Activity A must Start before Activity B may Start or start together.
The lag value is usually greater than zero. SS is a less common type.

Activity A Activity B
Time Management
PDM Time Calculations
Once the Network is constructed and duration of each activity
is estimated, we can determined the following four time
values:
– Earliest Start (ES) – The earliest possible time an activity can begin
– Earliest Finish (EF) – The earliest possible time an activity can finish
– Latest Start (LS) – The latest possible time an activity can start
without delaying project completion
– Latest Finish (LF) – The latest possible time an activity can start
without delaying project completion
Time Management
PDM Time Calculations

• ES and EF are determined by making a Forward Pass (left-to-

right) through the Network.

• ES of an activity is equal to the latest of early finish times of its

predecessors.

• EF is the total of the activity ES plus its duration.

Time Management
PDM Time Calculations

• LS and LF are determined by making a Backward Pass (right-

to-left) through the Network.

• LF of an activity is equal to the smallest of the LS times of the

activities exiting from the activity in question.

• LS of an activity is equal to its LF minus its duration.

Time Management
• Each activity box consists of six cells
Activity
ES 4 E 6 EF
LS 11 2 13 LF
Duration

• For the following example assume all activities:

– Begin on the morning of the scheduled start date
– End the evening of the scheduled finish date
– Using a 7-day per week (calendar), 5-day working.
Time Management
Forward Pass Example
Early Start Calculations
(F to G) 11
(E to G) 9
6 D 10 (D to G) 10
4 Largest ES

8 E 9 11 G 18
1 7

4 F 11 Early Finish Calculation

7 11 + 7 = 18
Time Management
Backward Pass Example
20 H 27
Late Start Calculation
25 7 32
24 - 4 = 20

14 K 18 18 I 22
20 4 24 24 4 28

18 J 19
Late Finish Calculations
33 1 34
(H to K) 25
(I to K) 24
(J to K) 33
Time Management
Floats and slack

Total Float: The amount of time that an activity may be delayed from its
early start without delaying the project finish date. Float is a mathematical
calculation, and can change as the project progresses and changes are made
to the project plan. Also called slack and path float.

Free Float (FF): The amount of time that an activity can be delayed
without delaying the early start of any immediately following activities.
Start Completion
Project duration = 24 days

Activity A Activity B Activity C

7 days 13 days 4 days
CASE 1: All activities are critical: total float and free floats for all activities = 0

Start Activity D Total Float = 5 Completion

8 days Free Float = 5

Activity A Activity B Activity C

7 days 13 days 4 days
CASE 2: Activity sequence in which one activity has total and free float

Total Float of D = 5 Total Float of E = 5

Free Float of D = 0 Free Float = 5
Start Activity D Activity E Completion
5 days 3 days
Activity A Activity B Activity C
7 days 13 days 4 days
CASE 3: Activity sequence illustrating total and free float
Time Management
Float Calculation Example

FT = 15
21 V 31
FF = 5
36 10 46

FT = 10 FT = 10 FT = 0
FF = 0 FF = 10 FF = 0
29 W 36 36 X 41 51 Z 61
39 7 46 46 5 51 51 10 61

FT = 0
FF = 0
44 Y 51
44 7 51
Time Management

Critical Path: The series of activities that determines the duration

of the project. In a deterministic model, the critical path is usually
defined as those activities with float less than or equal to a specified
value, often zero. It is the longest path through the project.

B
A E
A B E
Start Finish
C F Start
D Finish
D F
C
Example
Task/Duration/Predecessor
TASK Duration Predecessor
A 2 ----
ID – Task ID B 2 A
D- Duration
C 1 A
ES – Early Start
D 3 A
EF – Early Finish ES EF
LS – Late Start E 1 C,D
F ID D F 3 B
LF – Late Finish
F - Float/Slack LS LF G 2 E,F
 TASK Duration Predecessor

0 0 A 2 ----

2 4 4 7 B 2 A
C 1 A
0 B 2 0 F 3 D 3 A
2 4 4 7 E 1 C,D
F 3 B

0 A-B-F-G is the critical path. G 2 E,F

2
7 9
0 2 2 3
0 A 2 3 C 1 0 G 2
0 2 5 6 7 9

0 1 FF
ES EF
2 5 5 6
1 D 3 1 E 1 F ID DR

3 6 6 7 LS LF
 0/0 3 6 2/0 6 10 10 16 4/4
B E H
3 4 6
3 6 8 12 14 20

0/0 0/0 0/0 0/0

0 3 3 8 6 12 12 20 20 20
A C F J Fn
3 5 6 8 0
0 3 3 8 6 12 12 20 20 20
TF/FF
0/0
8 12 ES EF
1/0
3 10 G Act
D 4 Dur
7 8 12
4 11 1/1 LS LF
10 19
ES: Early Start (ES=latest EF of all IPAs) I TF/FF
EF: Early Finish (EF=ES + Dur)
LS: Late Start (LF - Dur) 9 TFi = LFi - EFi
LF: Late Finish (LF = earliest LS of all succeeding Activities) 20
11
Bar Chart
A project consist of six activities that should be done in a period of
time. Create a bar chart to ease the project planning and scheduling.
Activity A : 1 week, starting from 1 Oct 2022
Activity B : 2 week, starting from 5 Oct 2022
Activity C : 3 week, starting from 15 Oct 2022
Activity D : 2 week, starting from 25 Oct 2022
Activity E : 2 week, starting from 29 Oct 2022
Activity F : 1 week, starting from 5 Nov 2022

Start Date 1/10 End Date 12/11

= =
Project Duration = 6 weeks
Bar Chart
Data of a project consist of five activities with their duration and also amount of
people needed for this project. Create a bar chart according to the given data.

No Activity Duration Starting Human Resources Successor

(week) Date (people)

1 G 1 01 October 2021 5 H, I
2 H 2 08 October 2021 8 (4+4) J
3 I 3 10 October 2021 15 (4+5+5+1) K
4 J 2 22 October 2021 4 (2+2) K
5 K 2 05 November 2021 3 -
Bar Chart
Week
No Activity Duration People
1 2 3 4 5 6
1/10 8/10 15/1 22/1 29/1 5/11 12/1
0 0 0 1
1 G 1 5 5

2 H 2 8 4 4

3 I 3 15 4 5 5 1

4 J 2 4 2 2

5 K 1 3 3

10
Resources
(People)

0
Duration (week)
Work Breakdown Structure (WBS)

▪ Dividing complex projects to simpler and manageable tasks is the

process identified as Work Breakdown Structure (WBS).

▪ Usually, the project managers use this method for simplifying the
project execution.

▪ In WBS, much larger tasks are broken-down to manageable part of

work. These parts can be easily supervised and estimated.
Work Breakdown Structure (WBS)
▪ In project management and systems engineering, is a deliverable
oriented decomposition of a project into smaller components.

▪ A work breakdown structure element may be a product, data, a

service, or any combination.

▪ A WBS also provides the necessary framework for detailed cost

estimating and control along with providing guidance for schedule
development and control.
Work Breakdown Structure (WBS)
Work Breakdown Structure (WBS)
Sample WBS
Work Breakdown Structure (WBS)
Work Breakdown Structure (WBS)
WBS helps manager

▪ Facilitates evaluation of cost, time, and technical performance of the

organization on a project.

▪ Provides management with information appropriate to each

organizational level.

▪ Work Breakdown Structure assigns project responsibilities to

organizational units and individuals.

▪ Defines communication channels and assists in coordinating the

various project elements.
Work Breakdown Structure (WBS)
Few reasons for creating a WBS in a project

▪ Accurate and readable project organization.

▪ Accurate assignment of responsibilities to the project
team.
▪ Indicates the project milestones and control points.
▪ Helps to estimate the cost, time, and risk.
▪ Illustrate the project scope, so the stakeholders can have
a better understanding.
Work Breakdown Structure (WBS)
How to build a WBS

▪ Begin with the charter, focusing on objectives and

deliverables.
▪ Break the main product(s) down into sub-products.
▪ Set the structure to match how you’ll manage the project.
▪ Lowest level not too detailed, not too large.
Work Breakdown Structure (WBS)
How to build a WBS

▪ Identify support activities.

▪ Check for completeness - is all the effort included?
▪ Develop a coding structure if needed.
▪ Assign work package managers.
Work Breakdown Structure (WBS)
Work Packages

▪ Small project activities possibly with very short durations and definable results.

▪ In some complex projects, work packages may be at a lower level, say Level 5
or Level 6.

▪ The smallest level in a project that can be monitored, managed, and controlled
by a project manager effectively.

▪ The time frame for a work package may be 40 hours or 4 weeks depending up
on the size and complexity of the project.

▪ A work package can be used in a project in a variety of ways including in cost

estimation and scheduling.
Work Breakdown Structure (WBS)
Pitfalls
There are common pitfalls to creating a WBS. If you can
keep these few possible, you and your team will be much
more successful at creating a useful and accurate WBS.

▪ Level of Work Package Detail

▪ Deliverables Not Activities or Tasks
▪ WBS is not a Plan or Schedule
▪ WBS Updates Require Change Control
▪ WBS is not an Organizational Hierarchy
Work Breakdown Structure (WBS)
Goals For WBS

▪ Giving visibility to important work efforts.

▪ Giving visibility to risky work efforts.
▪ Illustrate the correlation between the activities and deliverables.
▪ Show clear ownership by task leaders.
Work Breakdown Structure (WBS)
Good WBS Design Principles

• The 100% Rule

– The WBS defines 100% of the work in the project.
– Anything that isn’t defined in the WBS is outside the scope of the project.
– The work content on any item is the sum of what is included under that work item.

• Upper Levels are Planned outcomes (deliverables), not planned actions.

• Ends of WBS include the activities

• Mutually-exclusive elements. Work should only appear in one place in the WBS.

• Must be easy to update.

Work Breakdown Structure (WBS)
Other methods of using WBS

▪ Using guidelines: Some organizations provide guidelines for preparing WBS.

▪ The analogy approach: Review WBSs of similar projects and tailor to your
project.

▪ The top-down approach: Start with the largest items of the project and
break them down.

▪ The bottom-up approach: Start with the specific tasks and roll them up.
Work Breakdown Structure (WBS)
WBS Dictionary
▪ A WBS dictionary is a document that describes detailed information
about each WBS item.

▪ Should be consulted before commencing any activity in order to

ensure that proper standards, procedures, and quality control
measures are being followed.

▪ Many WBS tasks are vague and must be explained more so people
know what to do and can estimate how long it will take and what it
will cost to do the work.
Work Breakdown Structure (WBS)
Sample WBS – Product Type Project
Work Breakdown Structure (WBS)
Sample WBS
Work Breakdown Structure (WBS)
WBS is the link to project design and the first project planning activity.
Work Breakdown Structure (WBS)
Activity Planning Steps
Activity Planning typically three steps that allow the project schedule to be created.
Work Breakdown Structure (WBS)
Organization Breakdown Structure OBS
BOARD OF DIRECTORS

PRESIDENT
B. Blank
Responsibility Chart Executive

SECRETARY - TREASURER SECRETARY - TREASURER

S.Smith K.Lee
Insurance Surety Bonds Owner Relations Labor
Collections Tax Returns Relations
Contract Negotiations Safety

ACCOUNTANT PURCHASING AGENT CHIEF ESTIMATOR OPERATIONS MANAGER

J. Johnson B. Brown K. King W. Williams
Board of Accounts Purchase Orders Bid Bonds Project Coordination
Disbursements Subcontractors Proposals Equipment Scheduling

PAYMASTER ASSISTANT PURCHASE COST ESTIMATOR PROJECT MANAGER

J. Jones AGENT D. Davis M. Millar
M. Millar
Payroll Costing Time and Cost Control
Personnel Records Invoices Price Quotations Project Pay Requests
Stores and Inventory
COST CLERK TAKEOFF EQUIPMENT SUPT
M. Moore EXPEDITOR S. Strong G. Green
Project Costs W. White Quantity Takeoff Repair Shop
Cost Records Shop Bid Invitations Parts Inventory
Drawings Delivers
WAREHOUSE
W. Wright
Material Inventory
Small Tools
How WBS Helps the Project Manager
 Facilitates evaluation of cost, time, and technical performance of the
organization on a project.

 Provides management with information appropriate

to each organizational level.

 Helps in the development of the organization breakdown structure

(OBS), which assigns project responsibilities to organizational units
and individuals

 Helps manage plan, schedule, and budget.

 Defines communication channels and assists in coordinating the

various project elements.
Attributes of Project Manager
 A PM must understand the mission and vision of the organization.

 The first skills a PM needs are people skills.

 One of the biggest traps for PM is to perform technical work in

addition to managing the job.
 Instead of asking for authority, make decisions yourself.

 The PM job is to ensure that everyone in the project team has what he
needs to do the job well.
 A PM must exercise both leadership and management skills.
Attributes of
Project Manager
7 Essential Characteristics of
Project Managers
Project Managers
Scorecards
7 Essential Scorecards of
Project Managers
Project Managers
Scorecards
7 Essential Scorecards of
Project Managers
Project Managers
Scorecards
7 Essential Scorecards of
Project Managers
Types of Project Organizations (OBS)
 There are two fundamentally different ways of organizing
projects within the parent organization
 The project as part of the Functional Organization
 The project as a free-standing part of the parent organization (pure
project organization)
 A third type, called a Matrix Organization is a hybrid of the
two main types
 Each has advantages and disadvantages
Types of Project Organizations (OBS)
1-The Project as Part of the Functional Organization
Types of Project Organizations (OBS)
2-Pure Project Organization
Types of Project Organizations (OBS)
1-The Project as Part of the Functional Organization

 Advantages of using the functional elements of the parent

organization as the administrative home for a project include:
 Maximum flexibility in the use of staff
 Individual experts can be utilized by many different projects
 Specialists in the division can be grouped to share knowledge and experience
 The functional division also serves as a base of technological continuity when
individuals choose to leave the project
 The functional division contains the normal path of advancement for individuals
whose expertise is in the functional area
Types of Project Organizations (OBS)
1-The Project as Part of the Functional Organization

 There are also disadvantages to housing the project in a functional

area:
 The client is not the focus of activity and concern
 The functional division tends to be oriented toward the activities particular to its
function
 Occasionally, no individual is given full responsibility for the project
 There are often several layers of management between the project and the client
 There is a tendency to suboptimize the project
Types of Project Organizations (OBS)
2-Pure Project Organization

 Advantages of a pure project organization:

 The project manager has full line authority over the project
 All members of the project work force are directly responsible to the project manager
 When the project is removed from the functional division, the lines of
communication are shortened
 When there are several successive projects of a similar kind, the pure project
organization can maintain a permanent cadre of experts who develop skills in
specific technologies
Types of Project Organizations (OBS)
2-Pure Project Organization

 Advantages of a pure project organization (cont.)

 A project team that has a strong and separate identity and develops a high level
of commitment from its members
 Because the authority is centralized, the ability to make a swift decision is
enhanced
 Unity of command exists
 Pure project organizations are structurally simple and flexible, which makes
them relatively easy to understand and implement
 The organizational structure tends to support a holistic approach to the project
Types of Project Organizations (OBS)
2-Pure Project Organization

 Disadvantages of a pure project organization:

 Each project tends to be fully staffed which can lead to a duplication of
effort in every area from clerical staff to technological support
 There is a need to ensure access to technological knowledge and skills that
results in an attempt by project managers to stockpile equipment and
technical assistance
 The functional division is a repository of technical lore, but it is not readily
accessible to team members of the pure project team
Types of Project Organizations (OBS)
2-Pure Project Organization

 Disadvantages of a pure project organization (cont.)

 Pure project groups seem to foster inconsistency in the way in
which policies and procedures are carried out
 In a pure project organization, the project takes on a life of its own
 There tends to be concern among team members about “life after
the project ends”
Types of Project Organizations (OBS)

 Reasons for the rapid growth; grouped in four general areas:

 Speed and market responsiveness have become absolute requirements for
successful competition
 The development of new products, processes, or services regularly requires
input from diverse areas of specialized knowledge
 Rapid expansion of technological possibilities in almost every area of
enterprise tends to destabilize the structure of organizations
 A majority of senior managers rarely feel much confidence in their
understanding and control of the activities in their areas
Types of Project Organizations (OBS)
3-The Matrix Organization

 The matrix organization is a combination of functional and

pure project
 A matrix organization can take on a wide variety of specific forms
 “Project” or “strong” matrix organization most resembles the pure
project organization
 The “coordination” or “functional” or “weak” matrix most resembles
the functional form
 The “balanced” matrix lies in between the others
Types of Project Organizations (OBS)
3-The Matrix Organization
 Rather than being a stand-alone organization, like the pure project,
the matrix project is not separated from the parent organization:
Types of Project Organizations (OBS)
3-The Matrix Organization
Types of Project Organizations (OBS)
3-The Matrix Organization

 As with other organizational forms, the matrix organization

has its own unique advantages:
 The project is the point of emphasis
 Because the project is overlaid on the functional divisions, the project has
reasonable access to the reservoir of technology in all areas
 There is less anxiety about what happens when the project is completed
Types of Project Organizations (OBS)
3-The Matrix Organization

 Advantages of a Matrix (cont.)

 Response to client’s needs is as rapid as in the pure project
organization
 Matrix management gives the project access to representatives
from the administrative units of the parent firm
 The matrix organization allows a better company-wide balance
of resources to achieve goals
 There is a great deal of flexibility in precisely how the project is
organized within the matrix
Types of Project Organizations (OBS)
3-The Matrix Organization

 There are also disadvantages to using the matrix organization; most

involve conflict between the functional and project managers:
 The balance of power between the project and functional areas is very delicate
 The movement of resources from project to project may foster political infighting
 Problems associated with shutting down projects can be as severe as in a pure
project organization
Types of Project Organizations (OBS)
3-The Matrix Organization

 Disadvantages of a Matrix (cont.)

 The division of authority and responsibility in a matrix organization is
complex, and uncomfortable for the project manager.
 Matrix management violates the management principle of unity of
command. Project workers have at least two bosses, their functional
heads and the project manager.
Types of Project Organizations (OBS)
4. Mixed Organizational Systems

 Divisionalization is a means of dividing a large

organization into smaller more flexible units
 This enables the parent organization to capture some
of the advantages of small, specialized organizational
units while retaining some of the advantages that
come with larger size units
Types of Project Organizations (OBS)
4. Mixed Organizational Systems

 Pure functional and pure project organizations may coexist in a firm

Types of Project Organizations (OBS)
4. Mixed Organizational Systems

 Advantages of a mixed organization:

 The hybridization of the mixed form leads to flexibility
 The firm is able to meet special problems by appropriate adaptation of
its organizational structure
 Disadvantages include:
 Dissimilar groupings within the same accountability center tend to
encourage overlap, duplication, and friction because of incompatibility
of interests
 Conditions still exist that result in conflict between functional and
project managers
Types of Project Organizations (OBS)
Choosing an Organizational Form

 Selecting the organizational interface between the project

and the firm is a difficult task
 The choice is determined by the situation, but is also partly intuitive
 Must consider the nature of the potential project, the characteristics
of the various organization options, the advantages and
disadvantages of each, the cultural preferences of the parent
organization, and then make the best compromise that can be made
Types of Project Organizations (OBS)
Choosing an Organizational Form

 Criteria for the selection of a project organization:

1. Define the project with a statement of the objective(s) that identifies the major
outcomes desired
2. Determine the key tasks associated with each objective and locate the units in
the parent organization that serve as functional “homes” for these types of tasks
3. Arrange the key tasks by sequence and decompose them into work packages
4. Determine which organizational units are required to carry out the work
packages and which units will work particularly closely with which others
5. List any special characteristics or assumptions associated with the project
6. In light of items 1-5, and with full cognizance of the pros and cons associated
with each structural form, choose a structure
Thank You
Any Question?