3QC3-CH9.docx

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11 Apr 2012
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Operations Management
Chapter 9: Project Management
Activity: Individual job or work effort requiring labor, resource and time, and is subject to
management control
Project: A unique, one-time operational activity or effort
Elements of a Project Plan
- Objectives
- Project scope
- Contract requirements
- Schedules
- Resources
- Personnel
- Control
- Risk and problem analysis
Project Return
ROI=(Gain from project-cost of project)/Cost of project
The Project Team
- Project teams are made up of individuals from various areas and departments within a company
Matrix organization: A team structure with members from functional areas, depending on the
skills required
- The project manager is often under greater pressure
Scope statement: A document that provides an understanding, justification, and expected result
of a project
Statement of work: A written description of the objectives of a project
Work breakdown structure: Breaks down a project into components, subcomponents, activities,
and tasks
Responsibility Assignment Matrix
- Shows who is responsible for the work in a project
Organizational breakdown structure (OBS): A chart that shows which organizational units are
responsible for work items
The Gantt chart
- A graph or bar chart with a bar for each project activity that shows the passage of time
Precedence relationship: The sequential relationship of project activities to each other
Slack: The amount of time an activity can be delayed without delaying the project
Project Control: The process of making sure the project progresses toward a successful
completion
Time management: The process of making sure the project schedule does not slip and it is on
time
Cost management: Often closely tied to time management because of the time-cost tradeoff
occurrences
Quality management: Requires that work be monitored for quality and that improvements be
made as the project progresses just the same as in normal production or manufacturing operation
Performance Management: The process of monitoring a project and developing timed status
reports to make sure that goals are being met and the plan is being followed
Earned value analysis: A standard procedure for numerically measuring a project’s progress,
forecasting its completion date and cost and measuring schedule and budget variation
Enterprise project management: Refers to the management and control of a company-wide
portfolio of projects
- CPM/PERT uses a network to depict the precedence relationships among activities
The Project Network
Activity on node (AON): Nodes represent activities, and arrows show precedence relationships
Activity on arrow (AOA): Arrows represent activities and nodes are events for points in time
Events: Completion or beginning of an activity
Dummy: Two or more activities cannot share the same start and end nodes
Critical path: The longest path through a network; it is the minimum project completion time
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