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MGMT 430 test 2
Terms in this set (148)
A document issued by the project initiator or sponsor that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities.
A person or group who provides resources and support for the project, program, or portfolio and is accountable for enabling success.(internal or external customer)
Developing Project charter elements
o Purpose, Objectives, Overview,
o Schedules, Resources, Personnel,
o Risk Management Plans, and Evaluation Method
Short summary for senior managers and anyone unfamiliar with the project. Entails a statement of general
goals and their relationship to firm's objectives
Contains a detailed statement of the general goals, what constitutes success, and how the project will be terminated (e.g., aims of BC and goals based on SOW)
This section describes both the managerial and the technical approaches to the work (e.g., deviation from routine procedure and available technologies)
Outlines the various schedules and lists all the milestone events and/or phase-gates. Summary tasks are listed with estimated times (projected baseline schedule)
The three main aspects of this section include the budget, a complete list and description of contractual items, and the cost monitoring and control procedure
This section identifies the expected personnel requirements of the project, particularly the PM and the sponsor/approver of the project (also their special skill)
Risk Management Plans
This covers potential problems
and potential lucky breaks that could affect the project as well as plans to deal with the un/favorable contingencies
This section ought to incorporate a brief description of the procedures to be followed in the monitoring, collecting, storing, auditing, and evaluating the project, as well as in the post-project (i.e., "lessons learned") evaluation that follows project termination.
Project Launch Meeting
The project has officially begun. The charter has been published and distributed, the PM has been appointed, and the next step is to host the project launch meeting.
The success of a project launch meeting largely depends on established, well-defined objectives. All parties must know
precisely what the project is expected to deliver
At the launch meeting, the project is discussed in sufficient detail _
so that the potential contributors develop a general understanding of what is needed. It is also used to inspire(bring everyone up 2 speed)
Project Launch Meetings Expectations
- Technical scope is established (not "cast in concrete").
- participants accept areas of performance responsibility.
- Any tentative delivery dates or budgets are clearly noted.
- A risk management group is created
Work breakdown structure is a tool __
for developing the project plan - it reflects the way a project has been planned, cost estimated, and will be manage
A hierarchical decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables.
WBS is the basis for:
-Costing and risk analysis
-Coordination of objectives
-Control (including contracts)
Continue to break down work packages for the next planning horizon until it has no less than 8 hours of effort and not more than 80 hours of effort (2 weeks)
Matrix based chart
A responsibility assignment matrix (RAM) is a grid that
shows the project resources that are assigned to each
work package - used to illustrate connections between
work packages or activities and project team members
A common type of responsibility matrix that uses responsible, accountable, consult, and inform statuses to define involvement of stakeholders in project activities
Responsible (1 Person): Who is assigned to work on this task?
Accountable (Approve): Who has decision-making authority?
Consult: Any stakeholder that can provide insight into the task.
Inform: Anyone that has to be kept updated on the progress
Why us a RACI Matrix useful?
•It lets the PM know if any team member is assigned with too many/few responsibilities.
•It keeps everyone on the same page on who is accountable for a specific activity or task.
•It allows for all necessary people to be kept in the loop and reduces miscommunication
The process of analyzing activity sequences, durations, resource requirements, and schedule constraints to create the project schedule model.
Precedence Diagramming Method (PDM)
A technique used for constructing a schedule model in which activities are represented by nodes and are graphically linked by one or more logical relationships to show the sequence in which the activities are to be performed.
activity that logically comes before a dependent activity in a schedule
dependent activity that logically comes after another activity in a schedule
-It may have a successor(s) but no predecessor(s). (START)
-It may have a predecessor(s) but no successor(s). (END)
-It may have both predecessor(s) and successor(s). (MIDDLE)
A logical relationship in which a successor activity cannot start until a predecessor activity has finished.
A logical relationship in which a successor activity cannot finish until a predecessor activity has finished.
A logical relationship in which a successor activity cannot start until a predecessor activity has started.
A logical relationship in which a successor activity cannot finish until a predecessor activity has started.
Program Evaluation and Review Technique (PERT)
A technique for estimating that applies a weighted average of optimistic, pessimistic, and most likely estimates when there is uncertainty with the individual activity estimates.
e best estimate of the "resource" required to accomplish a task, accounting for the fact that projects do not always proceed as normal. Formula: RE=(O+4M+P)÷6
The minimum possible "resource" required to accomplish a task, assuming everything proceeds better than is
The maximum possible "resource" required to accomplish a task, assuming everything goes wrong (excluding
Most Likely (M)
The best estimate of the "resource" required to accomplish a task, assuming everything proceeds as normal.
Critical Path Method
The method used to estimate the
minimum project duration and determine the amount of scheduling flexibility on the logical network paths within
the schedule model."
The sequence of activities that represents the longest path through the project, which determines the shortest possible duration
The earliest possible point in time when the uncompleted portions of a scheduled activity can start (ES). Upper left of each node in the AON network.
The earliest possible point in time when the uncompleted portions of a scheduled activity can finish (EF). Upper right of each node in the AON network
Measured by the amount of time a schedule activity can be delayed or extended without negatively affecting other scheduling constraints (Slack)
.The latest possible point in time in which the uncompleted portions of a schedule activity can start (LS). Lower left of each node in the AON network
the latest time an activity can finish and not delay the project
Slack (Free Float)
The amount of time a scheduled activity can be delayed without delaying the early start date of a successor. (LS-ES=0)
A method used to estimate the minimum project duration and determine the amount of scheduling flexibility on the logical network paths within the schedule model
Schedule Compression Techniques
to shorten the schedule duration without reducing the project scope, in order to meet the schedule constraints or imposed dates
A technique used to shorten the schedule duration for the least incremental cost by adding resources.
Crashing only works for
for activities on the critical path, in
which additional resources will shorten activity duration. Not always a viable alternative; may increase costs/risk.(ex approving overtime, additional employees, outsourcing)
(1) Focus on critical path activities (noncritical path activities do not influence project duration); and (2) Select the least expensive way (e.g., man-hours versus machinery rental/operation
A technique in which activities or phases that are normally done in sequence are performed in parallel for at least a portion of their duration (Lead or Lag approaches)
The amount of time whereby a successor activity can be advanced with respect to a predecessor activity
The amount of time whereby a successor activity can be delayed with respect to a predecessor activity
Gantt Chart show
planned and actual progress for tasks displayed as bars against a horizontal time scale, an easy-to-
read method to compare actual status to planned progress
A bar chart of schedule information where activities are listed on the vertical axis, dates are shown on the horizontal axis, and the activity durations are shown as horizontal bars placed according to start and finish dates (planned/actual progress)
Advantages of Gantt Charts
-Particularly effective and easy-to-read method of indicating the actual current status for each of a set of tasks compared to the planned progress for each item of the set.
-Helpful in expediting, sequencing, and reallocating resources among tasks, as well as in the valuable but mundane job of keeping track of how things are going.
-Contain a number of special symbols to designate or highlight items of special concern to the situation being charted.
-Requires frequent updating, but they are easy to maintain as long as task requirements are not changed (or the schedule).
"skilled human resources
(specific disciplines either individually or teams), services,
equipment, supplies, commodities, material, budgets, or
funds." Time is deemed as a constraint (not a resource)
Time is critical
constraint in PM, it's also unique
because it cannot be inventory
Human resources are classified by the skills they bring to the project (e.g., programmer, engineer, welder)
Includes a large spectrum (chemicals for science, concrete for a road, survey data for marketing)
usually presented by type, size, and quantity (earthmover tractor, laboratory, computer software)
Project resource usage is generally
nonlinear, most PM software doesn't catch it.
The project must be finished by a certain
time, using as few resources as possible. It is time, not resource usage that is most critical
The project must be finished as soon as
possible, but not exceeding some specific level of resource usage or some general resource constraint
Time-Constrained Project (Yes)
Resources are added to ensure project is completed on time (resource allocation)
Resource-Constrained Project (No)
Restricted resources cause project delays (labor, equipment, resources) (minimize the delays via heuristic)
Defines the amounts of the individual resources a schedule requires during specific time periods. It gives a general understanding of the resource demands.
Identifies the working days and shifts on which each specific resource is available. Specifies when and how long the identified project resources will be available
A technique in which start and finish dates are adjusted based on resource constraints with the goal of balancing demand for resources with the available supply.
-purpose create smoother distribution of resource usage
-downside has a negative effect on critical path (delays)
A technique that adjusts the activities of a schedule model such that the requirements for resources on the project do not exceed certain predefined resource limits.
-critical path is not changed the competition date may not be delayed
any approach to problem solving, learning, or discovery that employs a practical method not guaranteed to be optimal or perfect, but sufficient for the immediate goals
minimum slack first
(works the best) heuristic orders activities by the amount of slack, least slack going first. It is common, when using this rule, to break ties by using the shortest-task-first rule.
Work packages with the least amount of slack are
the ones on the critical path(slack of zero)
meeting the time, cost, and scope objectives
Meeting the technical and operational specifications as well as loyalty/repurchase
relates to commercial success and market share or internal operational performance
Future opportunities and real options
secondary purpose of evaluation
to help translate the achievement of a project's goals into a contribution
to the parent organization's goals
During the planning phase of a project __
and audit is conducted
An examination designed to determine the true status of
work performed on a project and its conformance with
the project statement of work, including the constraint
Normally most constrained by resources and time and is usually a brief review of a project(6 factors)
A typical detailed audit is conducted when a follow-up to the general audit is required. This occurs due to unacceptable level of risk or performance in project area
Typically performed by a qualified technician under the direct guidance of a project auditor. Although not
always the case, the technical audit is often the most detail
Often a legal necessity because the client specified in the contract. It is a major part of the post-project report, which is a main source of managerial feedback. It is needed to account for all project property and expenditure
contains a description of the
project (provides framework for reader to understand)
Should be reported as of the time of the
audit and include performance for Cost, Schedule, Scope, and Quality (identifying problems and make projections)
Auditor's conclusions regarding progress together with recommendations for changes in technical approach, schedule, and budget that should be made in
the remaining project tasks
Critical Management Issues
Entails a brief discussion of
time/cost/scope trade-offs for senior managers to make decisions about the future of the project
This section should contain a review
of the major risks associated with the project and their projected impact on project time/cost/scope.
Limitations and Assumptions
Auditors will often include
statements covering limitations on accuracy or validity of the report (assumptions/limitations that may affect data)
Termination by Addition
-If the project is a major success, it may be terminated by institutionalizing it
as a formal part of the parent firm (new division/dept).
-When a project success results in termination by addition, the transition often involves assigning project personnel, equipment, and property to the new division/department
Termination by Integration
The most common and complex way to terminate successful projects - output of the project becomes a standard part of the operating systems of the parent firm or the client. (difference from termination by addition and integration was the plan from the start was to add the project to the parent organization)
Termination by Extinction
The project is stopped because it is unsuccessful or has been superseded (e.g., the new drug failed its efficacy tests; there is a superior alternative; or over budget/schedule)
-Termination by murder- no signs of stoping the project.(new boss comes in and ends a project)
Termination by starvation
'slow starvation by budget decrement.' Budget cuts during recessions are
common - sometimes used to mask project termination. (most inefficient way)
Project termination has 2 distinct parts
decision process and implementation process
Implementing close down includes the below:
-Creating a final report.
-Reassigning project team members.
-Delivering the project to the customer.
-Closing accounts and seeing all bills are paid.
-Getting delivery acceptance from the customer.
-Shutting down resources and releasing to new use
A key element of the final report is a comparison of what the project achieved (terminal evaluation) with what the project tried to achieve (project proposal)
Administrative practices should be reviewed, and those that worked well or poorly should be highlighted - also
report reasons why specific practices were in/effective
Each of the organizational forms used for projects has its own set of advantages and disadvantages. A final report should include comments on ways the structure aided or impeded the progress of the project.
Project and Administrative Team
Occasionally, competent and likeable individuals do not perform well as members of a team when high levels of
interpersonal communication/cooperation are require
Techniques of Project Management
The methods and techniques used for project forecasting, planning, budgeting, scheduling, resource allocation, risk management, and control, influence a project's outcome.
The report should address how the tasks were conducted
Project Portfolio Process (PPP)
"An eight-step procedure
for selecting, implementing, and reviewing projects that will help an organization achieve it's strategic goal."
Process of evaluating proposed projects or groups of projects and then choosing to implement them so that the objectives of the parent company will be achieved
Decision Making Model
Process for concluding which decisions
need to be made and how to find alternatives for each decision (six criteria for project selection models and two basic types)
Modeling the Problem
Process of excluding the unwanted
reality from a problem, leaving only relevant aspects of the 'real' situation (i.e., reality is far too complex in its entirety)
model should reflect the reality of a company's
decision situation, especially the multiple objectives of both
the firm and its managers (as well as account for limitation
The model should be sophisticated enough to deal with the relevant factors (e.g., internal and external situations
that affect projects - strikes and rates; multiple time periods
model should give valid results within a range of conditions that the firm may experience. It should be easy to modify in response to changes in the firm's environment
Ease of Use
The model should be reasonably convenient, not taking a long time to execute, and be easy to use/understand
(e.g., data access and no specialized analysis or equipment)
The data-gathering and modeling costs should be low relative to the cost of the project and less than the potential
benefits of the project (all expenses should be considered)
It should also be easy and convenient
to gather and store the information in a database, as well as to manipulate data in the model through standard software
Nonnumeric: Sacred Cow
A project that is undeservedly safe from elimination or criticism, often because it is the pet project of a senior executive (idiom: immune to criticism or questioning
Nonnumeric: Operating Necessity
A project that is required in order to protect property or to keep the company in operation. Due to the nature of the project, it does not require much formal evaluation(having a website for retail stores)
-Net Present Value
-Unweighted Factor Scoring
-Weighted Factor Scoring
Profitability: Payback Period
Length of time a project takes to return the investment or cost incurred to deliver it. The shorter the payback period, the more preferred the project, according to this model(important to small mid-size firms)
Profitability: Net Present Value
Net present value (NPV) is equal to the present value of future net cash flows, discounted at the cost of capital
Scoring: Unweighted Factor
In attempt to overcome some of the disadvantages of the profit models, particularly their focus on a single-decision criterion, different scoring models have been developed
Scoring: Weighted Factor
This model incorporates numeric weights that reflect the relative importance of each individual factor (criteria). If used for selection, it may also be used for improvements.
Monitoring and Controlling
The integrative nature of project management requires the monitoring and controlling process group to interact with other process groups (i.e., Deming Cycle)
Collect project performance data with respect to a plan, produce performance measures, and report and disseminate performance information.
Responsibilities entail collecting, measuring, and distributing performance information, and assessing the measurements and trends for process improvements
Three important constraints to be monitored are cost(budget), time (schedule), and scope (performance) -
encompass the fundamental objectives of the project
Comparing actual performance with planned performance, analyzing variances, assessing trends for
process improvements, evaluating possible alternatives, and recommending proper corrective action as needed
Assuring reality meets expectations or plans. Often involves the process of keeping actions within limits
to assure that certain outcomes will happen (as planned)
Why did they separate monitoring and controlling?
monitoring is collecting data and sharing it. Controlling is more managing. They both are to big of a responsibility to be combined as one.
Cost control and time control
The manager compares budgets to the actual cash flows, purchase orders, labor hour charges, amount of overtime,
absenteeism, accounting variance reports, cost exception reports, accounting projections, and income report
The later changes are made, the more difficult and costly they are to complete. Without control, the accumulation of little changes negatively impacts the schedule and cost
Bench marking and critical ratio
Monitor Tool: Reports
All project stakeholders should be appropriately tied to project reporting system, but the reports need not be of
the same depth or frequency for each managerial level
Reports issued on a regular basis (not necessarily on
calendar basis). Distribution can be periodic, at milestones or
critical events, occasionally on a weekly or even a daily basis
Reports distributed to the team members who are responsible for PM decision-making and distributed to inform other managers of the decision (have a clear 'need to know')
Reports used to disseminate the results of special problems that arise during a project. Generally cover matters that are of interest to other PM (analytic methods)
-Mutual understanding of the project goals as well as early warning signals of potential problems and delays.
-Awareness of the progress of parallel activities and of the problems associated with coordination among activities.
-Understanding the relationships of individual tasks to one another and to the overall project.
-Minimizing confusion associated with change by reducing delays in communicating the change.
-Keeping the client and senior management up-to-date on project status, costs, milestones, deliverables, and needs.
There is often too much detail, both in the reports (not being read or not able to find information) and input being solicited from workers (careless preparation of data - doubts validity)
"The comparison of actual or planned practices, such as processes and operations, to those of comparable firms
to identify best practices, generate ideas for improvement, and provide a basis for measuring performance"
A graphic display of process data over time and against established control limits, which has a centerline that assists in detecting a trend of plotted values toward either control limit.
Control Tool: Critical Ratio Chart
Critical ratio charts can be used to monitor and control the project (below). Note that a PM will ignore critical
ratios in some ranges, these ranges are not necessarily symmetric around 1.0 (depends on the control limits)
Earned Value Management
Earned Value Management (EVM) is a methodology that combines scope, schedule, and resource measurements
to assess project performance and progress (common)
Planned Value (PV)
The authorized budget assigned to scheduled work.
the total cost incurred for the work to
be accomplished for an activity or for a WBS component. It is the actual amount spent to date to complete work
Earned Value (EV)
The measure of work performed expressed in terms of the budget authorized for that work.
Variances from the approved baseline are also monitored the variances are useful for determining project status
Schedule Variance (SV)
measures the amount by which a
project is ahead or behind the planned delivery date, at a given point in time (measure the schedule performance)
expressed as the amount of budget
deficit or surplus at a given point in time. It is a measure
of cost performance on a projec
Schedule Variance (SV) and Cost Variance (CV) values can be converted into efficiency indicators to reflect the cost and schedule performance of any project for comparison against all other projects or within a portfolio of projects
Schedule Performance Index (SPI)
measures the schedule efficiency (how efficiently the project team is using time), it compares the actual progress to the planned progress
Cost Performance Index (CPI)
Cost Performance Index (CPI) measures cost efficiency of budgeted resources (cost efficiency for work completed).
It is considered by some as the most critical EVM metric
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