Chapter
7 Project Management
DISCUSSION QUESTIONS
1. Software is an essential element for successful management of complex projects. It
can provide information on completion performance of critical activities, highlight
activities that need additional resources, and suggest the project duration that will
minimize costs. However, whether projects are large or small, the people who
manage them or perform the activities will ultimately determine the outcome of the
project. The project manager must have the ability to coalesce a diverse group of
people into an effective team. The organization of the firm must also be conducive
to cross-functional inputs.
2. Slack in a project is determined by calculating the early start time (ES) and the
latest start time (LS) for each activity. The ES time for an activity is found by
moving forward through the project network from the Start activity along the
longest time path to that activity. Using the project’s targeted completion date, the
LS time is found by moving backward through the project network from the Finish
node along the longest path to that activity. The difference LS – ES determines the
slack for that activity. Slack can also be calculated by taking the difference
between the latest finish time (LF) and the earliest finish time (EF) for an activity.
Managers need to know the slack for each activity because slack indicates how
much the schedule for that activity can slip before the entire project is delayed.
Activities with little or no slack need to be closely monitored. In addition, managers
can move resources from activities enjoying sizeable slack to activities that have no
slack or are falling behind schedule.
3 Risk is a measure of the probability and consequence of not reaching a project goal.
There are four major sources of risk in a project: (1) Strategic fit, which reflects the
synergy of the project to the firm’s operations strategy. A lack of fit may cause myriad
problems of resource allocation and managerial motivation. (2) If the project involves
the introduction of a new service or product, competitor reactions, technological
developments after the project has been initiated, and legal challenges brought on by
unforeseen design consequences can all have a role in defining the success of the
project. (3) The capability of the project team to tackle the specifications of the project
play a major role in the success of the project. (4) There may be an operations risk
introduced by poor information communication, poor design of the project network, or
bad estimates for activity times.
7-1
Copyright © 2016 Pearson Education, Inc.
,7-2 Part I Managing Processes
PROBLEMS
Developing the Project Schedule
1. Northland Pines High School
a. AON network diagram
D
2
B E G
4 1 3
Start A F H J Finish
2 8 5 7
C I
5 4
b. The critical path is A–C–F–H–J with a completion time of 27 days.
c.
Earliest Latest Earliest Latest On Critical
Activity Duration Start Start Finish Finish Slack Path?
A 2 0 0 2 2 0 Yes
B 4 2 3 6 7 1 No
C 5 2 2 7 7 0 Yes
D 2 6 15 8 17 9 No
E 1 6 16 7 17 10 No
F 8 7 7 15 15 0 Yes
G 3 8 17 11 20 9 No
H 5 15 15 20 20 0 Yes
I 4 15 16 19 20 1 No
J 7 20 20 27 27 0 Yes
2. Kids and Tots Apparel
a. AON diagram
B F
2 3
Start A D E Finish
7 4 4
C G
4 5
Copyright © 2016 Pearson Education, Inc.
, Project Management l CHAPTER 7 l 7-3
b. The critical path is A–C–D–E–G with a completion time of 24 days.
Earliest Latest Earliest Latest On Critical
Activity Duration Start Start Finish Finish Slack Path?
A 7 0 0 7 7 0 Yes
B 2 7 9 9 11 2 No
C 4 7 7 11 11 0 Yes
D 4 11 11 15 15 0 Yes
E 4 15 15 19 19 0 Yes
F 3 19 21 22 24 2 No
G 5 19 19 24 24 0 Yes
c. Activities B and F are the only ones to have slack.
3. Billing process.
a. AON diagram
A C
3 7
Start D F H Finish
13 6 8
B E G
11 10 5
b. The critical path is B-D-F-H with a completion time of 38 weeks. The
computation of slack is provided in the following output from Project
Management Solver of OM Explorer.
Copyright © 2016 Pearson Education, Inc.
, 7-4 Part I Managing Processes
4. Nathan Hale High School
a. AON diagram
I
A E 4
3 7
G J
B 4 3
4
Start F Finish
2
C
5
H K
6 3
D
4
b. The critical path is A–E–G–I with a completion time of 18 days.
Earliest Latest Earliest Latest On Critical
Activity Duration Start Start Finish Finish Slack Path?
A 3 0 0 3 3 0 Yes
B 4 0 3 4 7 3 No
C 5 0 2 5 7 2 No
D 4 0 3 4 7 3 No
E 7 3 3 10 10 0 Yes
F 2 5 7 7 9 2 No
G 4 10 10 14 14 0 Yes
H 6 7 9 13 15 2 No
I 4 14 14 18 18 0 Yes
J 3 14 15 17 18 1 No
K 3 13 15 16 18 2 No
5. Diamond Manufacturing Inc.
a. The AON network is:
ES ID EF
11 C 20 LS DUR LF
11 9 20
0 A 4 4 B 11 20 F 30 30 G 41
Start 0 4 4 4 7 11 20 10 30 30 11 Finish
41
11 D 14 14 E 28
13 3 16 16 14 30
Copyright © 2016 Pearson Education, Inc.
7 Project Management
DISCUSSION QUESTIONS
1. Software is an essential element for successful management of complex projects. It
can provide information on completion performance of critical activities, highlight
activities that need additional resources, and suggest the project duration that will
minimize costs. However, whether projects are large or small, the people who
manage them or perform the activities will ultimately determine the outcome of the
project. The project manager must have the ability to coalesce a diverse group of
people into an effective team. The organization of the firm must also be conducive
to cross-functional inputs.
2. Slack in a project is determined by calculating the early start time (ES) and the
latest start time (LS) for each activity. The ES time for an activity is found by
moving forward through the project network from the Start activity along the
longest time path to that activity. Using the project’s targeted completion date, the
LS time is found by moving backward through the project network from the Finish
node along the longest path to that activity. The difference LS – ES determines the
slack for that activity. Slack can also be calculated by taking the difference
between the latest finish time (LF) and the earliest finish time (EF) for an activity.
Managers need to know the slack for each activity because slack indicates how
much the schedule for that activity can slip before the entire project is delayed.
Activities with little or no slack need to be closely monitored. In addition, managers
can move resources from activities enjoying sizeable slack to activities that have no
slack or are falling behind schedule.
3 Risk is a measure of the probability and consequence of not reaching a project goal.
There are four major sources of risk in a project: (1) Strategic fit, which reflects the
synergy of the project to the firm’s operations strategy. A lack of fit may cause myriad
problems of resource allocation and managerial motivation. (2) If the project involves
the introduction of a new service or product, competitor reactions, technological
developments after the project has been initiated, and legal challenges brought on by
unforeseen design consequences can all have a role in defining the success of the
project. (3) The capability of the project team to tackle the specifications of the project
play a major role in the success of the project. (4) There may be an operations risk
introduced by poor information communication, poor design of the project network, or
bad estimates for activity times.
7-1
Copyright © 2016 Pearson Education, Inc.
,7-2 Part I Managing Processes
PROBLEMS
Developing the Project Schedule
1. Northland Pines High School
a. AON network diagram
D
2
B E G
4 1 3
Start A F H J Finish
2 8 5 7
C I
5 4
b. The critical path is A–C–F–H–J with a completion time of 27 days.
c.
Earliest Latest Earliest Latest On Critical
Activity Duration Start Start Finish Finish Slack Path?
A 2 0 0 2 2 0 Yes
B 4 2 3 6 7 1 No
C 5 2 2 7 7 0 Yes
D 2 6 15 8 17 9 No
E 1 6 16 7 17 10 No
F 8 7 7 15 15 0 Yes
G 3 8 17 11 20 9 No
H 5 15 15 20 20 0 Yes
I 4 15 16 19 20 1 No
J 7 20 20 27 27 0 Yes
2. Kids and Tots Apparel
a. AON diagram
B F
2 3
Start A D E Finish
7 4 4
C G
4 5
Copyright © 2016 Pearson Education, Inc.
, Project Management l CHAPTER 7 l 7-3
b. The critical path is A–C–D–E–G with a completion time of 24 days.
Earliest Latest Earliest Latest On Critical
Activity Duration Start Start Finish Finish Slack Path?
A 7 0 0 7 7 0 Yes
B 2 7 9 9 11 2 No
C 4 7 7 11 11 0 Yes
D 4 11 11 15 15 0 Yes
E 4 15 15 19 19 0 Yes
F 3 19 21 22 24 2 No
G 5 19 19 24 24 0 Yes
c. Activities B and F are the only ones to have slack.
3. Billing process.
a. AON diagram
A C
3 7
Start D F H Finish
13 6 8
B E G
11 10 5
b. The critical path is B-D-F-H with a completion time of 38 weeks. The
computation of slack is provided in the following output from Project
Management Solver of OM Explorer.
Copyright © 2016 Pearson Education, Inc.
, 7-4 Part I Managing Processes
4. Nathan Hale High School
a. AON diagram
I
A E 4
3 7
G J
B 4 3
4
Start F Finish
2
C
5
H K
6 3
D
4
b. The critical path is A–E–G–I with a completion time of 18 days.
Earliest Latest Earliest Latest On Critical
Activity Duration Start Start Finish Finish Slack Path?
A 3 0 0 3 3 0 Yes
B 4 0 3 4 7 3 No
C 5 0 2 5 7 2 No
D 4 0 3 4 7 3 No
E 7 3 3 10 10 0 Yes
F 2 5 7 7 9 2 No
G 4 10 10 14 14 0 Yes
H 6 7 9 13 15 2 No
I 4 14 14 18 18 0 Yes
J 3 14 15 17 18 1 No
K 3 13 15 16 18 2 No
5. Diamond Manufacturing Inc.
a. The AON network is:
ES ID EF
11 C 20 LS DUR LF
11 9 20
0 A 4 4 B 11 20 F 30 30 G 41
Start 0 4 4 4 7 11 20 10 30 30 11 Finish
41
11 D 14 14 E 28
13 3 16 16 14 30
Copyright © 2016 Pearson Education, Inc.
