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Final

GMS 450 Final: GMS 450- Final Exam Crib Sheet

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Department
Global Management Studies
Course Code
GMS 450
Professor
Mohammad Nikoofal

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Week 5Scheduling the Project Schedule: Listing of a projects milestones, activities, and deliverables, usually with intended start and finish dates. PERT (Program Evaluation and Review Technique): statistical tool that gives probalistic activity duration s. CPM (Critical Path Method): includes both time and cost estimates to allow timecost trade offs and gives deterministic activity durations. Activity: A task or set of tasks Uses resources and time. Event: An identifiable state resulting from completio n of one or more activities, consumes no resources or time, and predecessor activities must be completed. Milestones : Identifiable and noteworthy events that mark significant progress e.g. deliverables, usage of time or resources. Network: A diagram of nodes (activities or events) and arrows (directional arcs) that illustrate the technological relationships of activities Path: A series of connected activities between two events Critical path : The set of activities on a path that, if delaye d, will delay completion date of project Critical Time : time required to complete all activities on the critical path Activities on ar rows (AOA) network (associated with PERT): The activities are shown as arrows and events as nodes Generally more difficult to draw but depicts the technical relationships of the activities well. Activities on nodes (AON) network (associated with CPM): Ea ch task is shown as a node and the technological relationship is shown by the arrows. Precedence Relationships : Determining the sequence for undertaking activities. S T U (in this e.g. S precedes T, T precedes U) Predecessor: comes before. Think how p re means before. Earliest Start Time (ES ): The earliest finish time of the immediately preceding activities. Earliest Finish Time (EF ): The earliest start time plus its estimated duration. Latest Finish Time (LF ): The latest start time of the activity that immediately follows. Latest Start Time (LS ): The latest finish time minus its estimated duration . Activity Slack : maximum length of time an activity can be delayed without delaying the entire proje ct (LF EF or LSES). Remember for earliest work from st art and for latest work from the finish. The GANTT Chart : Displays project activities as bars measured against a horizontal time scale. Easier to draw. Can contain consid erable amount of info. E xcellent communication device about state of a project. Prob lems arise when several tasks begin at the same time and have the same duration. Technical dependencies harder to see on Gantt vs. PERT CPM and can make it hard to find a cri tical path. PERTCPM methods often used as complements to Gantt charts. Shortcoming of PERTCPM: Does not allow for leads and lags between 2 activities (e.g. paint may have to dry). Finish to Start F to S : finish of activity A to start of activity B. Start to Start S to S : start of activity A to start of activity B. Finish to FinishF to F: Finish of activity A to finish of activity b. Start to Finish S to F: start of activity A to finish of activity B. Week 6 Budgeting the Project Project Cost Management Process : costs are estimated using resource planning, estimated costs are bud geted by an organization and the project manager controls the budget; ( 1) Resource Planning: planning of resources used to execute project > (list required resource, quantify required resource, construct resource schedule, level resources. (2) Cost Estim ating, (3) Budgeting, (4) Cost Control List Resource: List all required resources based on WBS: Each task listed in WBS demands particular skillsknowledge, Labor: Identify all roles involved in undertaking the project, including full time, part time co ntracting roles Equipment: identify all equip involved in undertaking project (phones, computers) Materials : identify all nonconsumable materials to complete the project activities such as office materials, materials requires for construction like lumbersteel. Quantify Resources: Labor: List skillsexperiences required by all roles and quantify how many of such resources are needed. Equip: list specification of all equip, total needed dates when needed Materials : List the specification of all requ ired materials total Resource Levelling : technique when start finish dates are adjusted based on resource constraints w goal of balancing demand for resources w available supply. Project Costs : Cost: resource expended to achieve a specific object ive in our case, a project. Cost Management : is the process by which companies control plan the costs of implementing projects. Direct Cost: Direct Material and labor costs used solely for a project Indirect Costs: Any materiallabor costs that arent us ed in a single project, Fixed Costs: Remain constant regardless of changes, Variable Costs : Vary in direct proportion to changes in the level of project activities. Overhead Costs : primarily those indirect costs associated with project implementation General Administrative Costs : costs primarily associated w general management admin of project. Cost Estimation: estimating is the process of finding cost (1) have accurate estimate on of ppl needed and (2) accurate estimated of time to complete the task s Work Element Costing : Determine resource requirements costs for each task; Fix costs, labor time rate, equip time rate, OH, general, sales, admin. Project Budget : budget is a plan for allocating organizational resources to the project activities, forecasting what resources the project needs and how much, when theyre needed how much they cost . Acts as a tool for upper management to monitor and guide the project Budgeting Problems : Project are unique activities, projects may be multi year with cost escalations, organization tradition impacts project building, project managers see costs differently than accountants. Method of Budgeting Top Down : Based on collective judgements and experiences of top and middle managers from similar past project s. Managers estimate overall project cost by estimating costs of major tasks, lower level managers split up the budget among the tasks under their control, continue until all work is budgeted. (Advantages: overall costs can be estimated accurately, errors in funding small tasks dont have to be individually identified) (Disadvantage: decision made by upper manager might not be a ccurate bc of limited knowledge, order of magnitude: 25 + 75.) Bottom Up Budgeting: WBS identifies elemental tasks, those responsible for executing these tasks estimate resource requirements (Advantage; cleardetail info, get employees involved . higher level or morale and motivation ) (disadvantage: top management has little influence, time consuming costly, order of magnitude: 5 +10) Parametric Estimating : Project broken d own to major elements, Estimate= quantity x rate (Advantage; more accuratefast) (disadvantage; missing costs, order of magnitude 10 +25) Impact of Budget Cuts: top down lower than bottom up (job looks ea sier faster, cheaper managers optimistic, subordinates pessimistic)Improving Estimates and Forecasts : number of ways for improving the process of cost estimating and a way of measuring its accuracy; forms, learning curves, tracking signals. Improving Estimates and Forecasts Forms: need info about ppl, material, special services, Learning Curves: humans learn when they repeat task . Unit performance improves by a fixed each time total production doubles, worker hours per unit decrease by a fixed of their previous value Tracking Signals Random Error: roughly equal chance that estimates are abovebelow the true value, Bias: if overunder chances arent equal or ou errors arent same size . Tracking signal can reveal if theres a systematic bias in co st and other estimates and whether the bias is (+ ) By observing their own errors, PMs can learn to make unbiased estimates Earned Vale Management : industry standard method of measuring a projects progress at any given point in time, forecasting its c ompletion date final cost, analyzing variances in schedule budget as project proceeds, used to measure and tra ck costsschedules in a project. EVM is a snapshot in time, can be used as mgmt. tool as early warning system to detect a deficient process Earned Value Definitions: Planned Value (PV ): Budgeted amount of cost for work scheduled to be accomplished on a given activity for a given period of time, Earned Value (EV) Budgeted amt of cost for completed work of a given activity for a given period of time. Actual Cost (AC) Actual Amount spent in completing the work accomplished within a given time period. Cost Variance (CV) Cost variance compares deviations only from the budget doesnt include schedule into account. Schedule Variance (SV ) schedule variance compares deviations only from the schedule doesnt include cost into account. Cost Performance Index (CPI): Ratio of earned value to actual cost, if CPI >1 project under budget Schedule Performance Index (SPI) : ratio of earned value to planned value; if SPI >1 then project ahead of schedule Estimate of duration ti ( t stands for time) Estim ate cost ri ( r stands for resources) Best scenario if ri = rI but usually ri < rI ti < tI Learning Rate: Tn = T1nr where Tn = time required to complete the nth unit T1 = time required to complete the first unit and r = exponent of learning curve; log(learning rate) log 2 Week 8 Resource Allocation Project Crashing: shorteningexpediting some activities within a project to reduce overall project completi on time Project Costs: Direct costs (labor, materials, any other costs directly related to activities) Indirect Costs (Admin, financial, other overh ead costs that can be avoided by reducing total project time) Penalty Costs (if project extends beyond speci fic date) Costs to Crash : Normal Time (NT ): time necessary to complete an acitivity under normal conditions Normal Cost (NC): activity cost associated with the normal time Crash Time (CT) : shortest possible time to complete an activity Crash Cost (CC ): activity cost associated with the crash time Cost to Crash Per Period Calculation : cost to crash per period= CC NC NTCT What Activities to Crash and How Long to Crash ?: 1. Determine critical path and crash tasks on cp 2. Find activities on critical path(s) with lowest cost of crashing per unit of time 3. Reduce time for this activity until a it cannot be further reduced, b until another path becomes critical, c increase in direct costs exceeds savings that result from shortening project 4. Repeat the proc edure until the increase in direct costs is larger than the savings generated by shortening the project Resource Levelling : When the project is large and contains many resource over allocations, resource leveling must be accomplished. A technique in which start and finish dates are adjusted based on resource constraints with the goal of balancing demand for resources with the av ailable supply. Purpose is to create a smoother distribution of resource usage. Resource leveling aims to minimize the period byperiod variations in resource loading by shifting tasks within their slack allowances. Leveling is done by delaying or splitting tasks until the resources assigned to them are no longer over allocated S= LF EF or LS ES Allocating Scarce Resources to Projects: Leveling resources using slack is often not possible what if the delay time of activity exceeds the slack. The key problem i s deciding which activities gets the scarce resource and in what order. When demand exceeds supply, software assigns a re source according to some priority rule selected by project manager. Some Priority Rules : As soon as possible: based on their earliest start time (ES) As late as possible: based on activities latest start time (LS) Shortest task duration first: shorter tasks are given priority over longer tasks Minimum slack first (BEST) Most critical followers: activities with a higher number of critical successors have priority Most successors: all successors are counted to identify priority Most resources fir st: the greater the use of a specific resource on a task, the higher the tasks priority for the resource. Allocating Resources to Several Projects: when several projects are carried out concurrently, size and complexity of the problem increases. With seve ral projects we can link them together with pseudoactivities. Pseudoactivities : have duration but require no resources. The use of pseudo activities allows a set of projects to be linked and dealt with a s though it were a single project. The individual pr ojects are interrelated by specifying predecessorsuccessor relationships. They appear to be parts of one project. Multiple Projects Connected with Pseudoactivities : Project manager faces the problem of choosing between different outcomes that result from different priority rules. Must also deal with different arrangements and durations of pseudoactivities (e.g. leveling rule) Criteria of Priority Rules 1. Schedule slippage amount project or set of projects delayed by application of leveling rule. The PM must trade off penalty costs or displeasure of clients against the cost of adding resources 2. Resource Utilization extent to which resources are over or underworked 3. In Process Inventory amount of unfinished work in the system Overall The minimum sla ck rule is probably the best overall priority rule according to research. It gives the best combination of minimum project sl ippage, minimum resource idle time, and minimum in process inventory Problems with Traditional Project Management To increase the p robability and highconfidence that the task completing on time we consider additional safety time beyond the work content time required to be em bedded within the task duration. The more safety in a task the more there is a tendency to behave in the follow ing ways: not starting the task until the last moment (Student Syndrome), delaying (or pacing) completion of the task (Parkinsons Law). As a result, the safety which was included at the p lanning stage is wasted and tasks over run Goldratts Critical Chain developed in response to many projects being dogged by poor performance manifested in: longer than expected durations, frequently misse d deadlines, increased costs in excess of budget, substantially less deliverables than originally promised . Goldratts f ocus in the Critical Chain is on a single project with multiple demands on a scarce resource . The logic extends to the multi project case without alteration . Multitasking : assigning team members to multiple projects and having them allocate their time across these projects. There is typically a penaltycost associated with switching from working on one project to another. Resolving These Problems : key to resolving this is to schedule the start of new projects based on the availability of bottleneck resource s. Suggested for time buffers to be created between the bottleneck resource and the resources that feed it. Also suggested to reduce the amount of safety time added to individual tasks and then adding some fra ction of the safety time reduced back into the system as a safety buffer for the entire project. Project Buffer : A project buffer is inserted at the end of the project network between the last task and the completion date. Any delays on the longest chain of dependent tasks will consume some of the buff er but will leave the completion date unchanged and so protect the project. Feeding Buffers: Delays on path of tasks feeding into the longest chain can impact the project by delaying a subsequent task on the Critical Chain. Feeder buffers are inserted betw een the last task on a feeding path and the Critical Chain. Typically recommended to be half the size of the safety time taken out of the feedi ng path Week 9 Risk Management Project Risk: an uncertain event or condition that, if it occurs, has a positive or negative effect on at least one project objective. Risk Management: the processes of identifying, analyzing, monitoring, and responding to project risk in order to maximize probability and consequences of positive events and, minimize probability and consequences of adverse events. Source of Risk: External (outside PMs control) unpredictable, predictable. Internal (within PMs control) non technical, technical, legal. Risk Categories Examples : Technicalfailure to meet customer performance requirement s. Schedule vendor delay in delivery of critical requirement. Cost material cost escalates more than anticipated. Human Resources may not have people available when required to staff the project. External inclement weather, changes in government regula tion. Sponsorcustomer delays in approval, change in customer preferences. Other encountering more than expected rock formations when excavating, labor strike may occur during the peak of a construction project. Risk Management Breakdown into Sub Processes: 1. Risk management planning 2. Risk identification 3. Qualitative risk analysis 4. Quantitative risk analysis 5. Risk response planning finding ways of reducing negative impacts on the project as well as enhancing positive impacts 6. Risk monitoring a nd control maintaining records of and evaluating the sub processes above in order to improve risk management. Risk Mgmt Planning : method for carrying out steps 2 5. Many firms create risk mgmt group responsible for steps 2 5. Risk Identification Scenario Analysis: Wellknown method for identifying risk . Involves envisioning likely scenarios and resulting outcomes . The following data should be obtained: probability of each risk event occurring , range of possible outcomes , probability of each outcome , expected timing of each outcome . Failure Mode and Effect Analysis (FMEA): Structured approach to help identify, prioritize, and better manage risk . FMEA can be applied to projects using the following 6 steps: 1. List ways project might fail 2. List consequence s and evaluate its severity (S: Severity) 3. List cause and likelihood (L: Likelihood) 4. Estimate the ability to detect each failure (D: Detectability) 5. Calculate the Risk Priority Number (RPN) 6. Sort the potential failures by their risk priority numbe r. Interviewing: is a factfinding technique for collecting information in face toface, phone, email, or instant messaging discussions. Interviewing people with similar project experience is an important tool for identifying potential ris ks. Brainstorming: A process for teams to generate ideas and to findsolutions on project issuesproblems. Can be accomplished either in a structured or unstru ctured way. Delphi Technique : a group decision process about the likelihood that certain events will occur. Goal i s to obtain a reliable response to a problem from a group of experts. Series of questionnaires are sent to a preselected group of experts. Each round of questionnaires results in a median answer. Risk Identification Outputs: Triggers (or risk symptoms): they are indications that a risk has occurred or is about to occur. Qualitative Risk Analysis is the process of assessing the impact and likelihood of occurrence of identified risks. Used to prioritize risks according to their potential effect on project o bjectives (scope, time, cost, quality). Enhance performance by focusing on and managing high priority risks. Risk Probability and Impact : Risk probability and risk consequences may be described in qualitative terms such as very high, high, moderate, low, a nd very low. Risk probability : is the likelihood that a risk will occur . Risk consequences : is the effect on project objectives if the risk occurs. ProbabilityImpact Risk Rating Matrix : A matrix may be constructed that assigns ratings (very low, low, mo derate, high, and very high) to risks . Impact: Reflects the severity of risks effect on the project objective, ordinal (qualitative ) or cardinal (quantitative). Rating Likelihood Matrix: Onetoone correspondence of ordinal and cardinal impact Rating Impact Matrix: Evaluating impact of a risk on major objectives. Impacts assessed on scale from very low to very high or on numerical scale ( cardinal and nonlinear) ProbabilityImpact (PI) Matrix: Determining whether a risk is considered low, moderate, or high Outputs from Qualitative Risk Analysis : 1. Overall risk ranking for the project: Risk ranking may indicate the overall risk position of a project relative to other p rojects by comparing the risk scores. 2. List of prioritized risks: Risks can be priorit ized by a number of criteria including: Rank (high, moderate, and low), WBS level. 3. List of risks for additional analysis: Risks classified as high or moderate would be prime candidates for more analysis. Quantitative Risk Analysis : State outcomes as pro bability distribution and use distributions to evaluate the desirability of certain decisions. Objective is to illustrate the risk profile of the outcomes on investing in some projects. Techniques for analysis include: expected value, simulation. Expected Value: When probability information is available or can be estimated, many risk analysis techniques use the concept of expected valu e of an outcome Simulation: Evaluating the desirability of certain managerial decisions by iteration and estimating probabil ity distributions of outcomes and key parameters. Decision Trees : A decision support tool that uses a tree like graph or model of decisions and their possible consequences, including chance event outcomes, resource costs, and utilit y. Three types of nodes : decision nodes represented by squares, chance nodes represented by circles, terminal nodes represented by triangle (optional). Solving the trees involving pruning all but the best decisions at decision nodes, and finding expecte d values of all possib le states of nature at chance nodes. Monte Carlo analysis : simulates a models outcome many times to provide a statistical distribution of the calculated results . The model is run repeatedly based on random choices of values from the probability distributi ons of the input variables . Outputs of the model are used to construct statistical distributions of items of interest such as costs, profits, and complet ion dates. Oracle Cristal Ball : widely used Excel Add In to improve the PMs understanding of the risks associated with budget uncertainty . Assumption Cells: contain variables or parameters that we can make assumptions about, Inflows are variables, Inflation is parameter Forecast Cells: contain the outcomes (or results) we are interested in forecasting. Typ ically contains a formula that is dependent on one or more of the assumption cells. Risk Response Planning : process of developing options and determining actions to enhance opportunities and reduce threats to the projects objectives. It includes the ident ification and assignment of individuals or parties to take responsibility for each agreed risk response. It must be appropria te to: severity of the risk, cost effective in meeting the challenge, timely to be successful, realistic within the project context , agreed upon by all parties involved, owned by a responsible person. Techniques for Risk Response Planning : The strategy that is most likely to be effective should be selected for each risk followed by specific actions to implement t he selected strategy. 4 Main Risk Response Strategies: 1. Avoidance 2. Transference 3. Mitigation 4. Acceptance. Risk Response Strategies Threats: Avoid eliminate a specific threat . May involve changing project plan. Transfer transfer the impact of a risk and ownership of it s response to a third party (insurance, performance bonds, warranties, guarantees, contract). Mitigate reduce the consequences of a risk event by reducing its probability andor its impact to an acceptable threshold. Accept do nothing due to below thresh old or cost of response. Risk Response Strategies Opportunities : Exploit eliminate uncertainty that may hinder an opportunity to be realized . Accept do nothing due to below threshold or cost of response . Share team up with a third party who is best abl e to realize the opportunity and reap the benefit . Enhance increase the probability andor impact by identifying and maximizing key drivers of the risk to ensure it occurs . Risk Assessment Matrix or Risk Register : tool for assessing and managing risks . Includes potential risks, their potential impact, likelihood of occurrence, and response plan. Helps to: list the impact of the risk , evaluate the likelihood of occurrence , determine the degree of impact , identify the action trigger, name a person responsibl e, create a response plan to avoid, mitigate, transfer, or accept risk. Risk Control: includes implementing risk response plans and monitoring risks. Risk response plans should be implemented as appropriate when their trigger point is reached Risk Monitoring involves: regularly viewing the risk mgmt. matrix during project, regularly reviewing and evaluating all risks to determine i f there are any changes to the likelihood of occurrence or the potential impact to any of the risks, seeking to identify new risks, tracking and documenting which risks actually occurred the impact of those risks. Week 10 Project Quality Management Project Scope : defines what needs to be done. Contains: customer requirements (the functional, operational, and performance specs or capabilities that must be met for project deliverables), deliverables, and acceptance criteria. Quality: Two Ways of Defining Quality : 1. Conformance to requirements projects processes and projects meet specs 2. Fitness for use product can be used as in tended. Note: do not confuse quality with luxury, and customer always defines what quality is . 8 Dimensions of Product Quality 1. Performance products primary operating characteristics, involves measurable attributes (cars fuel economy, acceleration rate ) 2. Features additional characteristics that enhance appeal of productservice (heated steering, AC, power brakes 3. Reliability likelihood that a product will not fail within a specific time period. 4. Conformance precision with which the product or se rvice meets the specified standards (emission control) 5. Durability length of a products life (how many km tires are good for) 6. Serviceability speed the product can be put into service when it breaks down (accessibility of parts) 7. Aesthetics subjective dimension indicating the kind of response a user has to a product. represents the individuals personal preference (style, image) 8. Perceived Quality quality attributed based on indirect measures (opinion that cars Germany auto is higher quality). Reliability: Average time that a unit or a piece of equipment performs its intended function under specific conditions. Specified as Mean Time Between Failure (MTBF). Determined in 2 ways: predicted MTBF based on a mathematical computation of sequential fa ilure of parts, actual MTBF based on field collected data . Maintainability : Average time to restore malfunctioning unit to working condition, meeting standards, under prevailing conditions. Defined a s the Mean Time To Repair (MTTR). Types of repairs: op erator repairs: less than 1 hr, shop repairs: 1 3 hrs, major overhaul: 3 60 hrs. Availability of a Machine : time when it is available for use (when not being repaired or maintained). Quality Concepts : 1.Zero Defects 2.Quality Throughout 3.The Quality Cycl e 4.Continuous Improvement Process (CIP) 5.Specification Practices. Zero Defects: management tool aimed at the reduction of defects through prevention. Directed at motivating people to prevent mistakes. Do their job right the first time. Zero Defects = No tolerance for errors within the system or its processes. Before quality movement 1970s, 2 3 defects were tolerated. Today six sigma quality standards specify 3.4 defects per million units. Six Sigma: is a datadriven approach and methodology for eliminati ng defects in any process. Quality Throughout: quality has impact in multiple areas: product, process, organization. Quality Cycle: four step model for carrying out change 1. Plan (plan the quality program) decide what your Client wishes to accomplish and what you need to do 2. Do (carry out to quality program) carry out the commission through its stages 3. Check (check outcome of quality program) review what you are doing on a continuous basis, identify problems, take corrective action where necessary 4 . Act (act to improve quality) identify opportunities for improvement, implement measures to improve the reliability of the process. Continuous Improvement Process (CIP ): recognizes that innovation in technology and business practices is continuously driv ing change. Any process that is satisfactory today is unlikely to remain so for long. Specification Practices: Two main types of specification: 1. Detailed or Prescriptive Specification: gives full details of the material to be used and the method of insta llation. Written for more complex projects 2. Functional or Performance Specification: describes the end result required but not the method of achieving that end result. Written on proj ects that are straight forward . Project Quality Management Processes : composed of; Quality Planning Identifies quality standards relevant to project and determines how to use standards in planning, Quality Assurance Periodically evaluating overall project performance to ensure project will satisfy relevant quality standards , Quality Control Monitoring specific project results to ensure they comply with relevant quality standards, and identifying ways to eliminate causes of unsatisfactory results. Plan Quality Management : identifying quality reqsstandards for the project and product, and documenting how project will demonstrate compliance with rele vant quality requirementsstandards Quality Planning : process for identifying quality standards a nd requirements for overall project and for trackin g, monitoring, and managing expectations of planned quality . Inputs for quality planning include the : scope
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