Course: Project Engineering & Management

Deadline: 10/11/2010

ASSIGNMENT 3
PROJECT PLANNING & SCHEDULING (PROBABILISTIC)/ PROJECT
MONITORING & CONTROL/ PROJECT IMPLEMENTATION

1. A Beta distribution is assumed for activity times in PERT. For this distribution
(a) Estimate the value of the constant K in terms of the shape and location
parameters.
(b) Derive the mean and variance of this distribution
(c) For what values of the shape parameters do you get the formulas for the
mean and variance that are typically assumed in PERT.

2. For the following probability distributions calculate the mean and variance

(a) Uniform distribution with minimum and maximum times of a and b.

(b) Triangular distribution with minimum, modal and maximum values of a,
m, and b.
(c) An exponential distribution with mean m.
(d) A discrete distribution with times t1, t2…..tn and corresponding
probabilities p1, p2…..pn.

3. For the project with data given in Table A

TABLE A
Job Predecessors Duration
A -- 10
B -- 4
C A 66
D A 8
E A 8
F B,C 6
G D,F 15
H D,F 4
I E,H 7

(a) Develop the A-O-A network

(b) Under stand PERT assumptions determine the critical path
(c) Compute probabilities that the project is completed within 50%, 75%, 90%,
110%, 125% and 150% of the critical path duration.
(d) For the non-critical node in the project, determine the probability of a positive
slack.

1
4. Perform the computations of 3 under the following situation

(a) Each activity has a Beta distribution with a,c,b, value of 4,8,12
(b) Each activity has a Uniform distribution with a,b values of 4,12
(c) Each activity has a Triangular distribution with a,m,b values of 4,8,12.
(d) Each activity has an Exponential distribution with mean of 8
(e) Each activity has a Normal distribution with mean 8 and variance 1.44…
(f) Each activity has a discrete distribution 6,7,8,9,10 with equal
probabilities.
5. For the network in Table A with triangular distribution for all activities assumed as in
Question 4 (c) use chance constrained programming to determine all the node times such that
for all jobs the probability of completion is
(a) 90%
(b) 95%
(c) 99%

Compare these results with the corresponding values under standard PERT assumptions showing
how optimistic PERT is under these circumstances.

6. The jobs of the following network have the indicated time estimates

Job Optimistic Most likely Pessimistic

(1,2) 3 6 15
(1,6) 2 5 14
(2,3) 6 12 30
(2,4) 2 5 8
(3,5) 5 11 17
(4,5) 3 6 15
(6,7) 3 9 27
(5,8) 1 4 7
(7,8) 4 19 28

(a) Draw the project network

(b) Calculate the length and variance of the critical path
(c) What is the probability that the jobs on the critical path will be completed by the
due date of 41 days?
(d) What is the probability that the jobs on the next critical path will be completed by
due date?
(e) What is your estimate that the entire project will be completed by due date?
Under standard PERT assumptions, what is the probability of completing the
project - before 30 days?, between 15 and 35 days?, After 38 days?

2
7. For the small network given below

3 5

1 4 6

(a) If all activities have a triangular distribution with a=5, m=a, b=20 what are the
node times such that each activity duration is accommodated with 95%
confidence?
(b) What are the corresponding times under standard PERT assumptions?

8. For the small project shown below

Job Predecessors Normal Duration Crash Duration

Duration Cost(Rs.) Duration Cost(Rs.)

A Remove and - 8 80 6 94
Disassemble motor
B Clear and paint frame A 7 40
C Rewind Armature A 12 100 4 94
D Replace bearings A 9 70 5 184
E Assemble and install B,C,D 6 50 6 102
motor

Assume that the jobs can be done at either normal or fail pass, but not at any pace in between.
Plot the relationship between project completion time and minimum total project cost. (Solve by
path enumeration and heuristic reasoning).

9. The project with the following data has to be implemented.

Activity Duration (months) Cost (Thousand Rs)

A (1,2) 4 8
B (1,3) 3 9
C (2,3) 2 10
D (2,4) 4 12
E (3,4) 5 15
F (3,5) 6 12
G (4,5) 1 10

A. Compare the pattern of expenditure for both an early start and a late start schedule.
B. If the rate of interest is 10% compute the NPV for both the early and the late start
schedules.
C. Time and phasing of expenditure from now onwards?

3
 D. The late start schedule is chosen for implementation and the progress is monitored after 6
months. The following status is observed:

Activity A: 50% complete

Activity B: completed

Other activities: not yet started

Total spending to date: Rs 18, 000/-
a) What is time and cost overrun?
b) Compute the Cost and Schedule Performance Indices and show the performance
of the project on a consolidated front.
E. Assuming that the durations and costs of the project remain unaltered what is your
projection of the project completion
F. If you feel that the original estimates of time and cost for activities were optimistic and
that the remaining durations of all activities would have to be scaled up by 25% as
compared to the original estimates, whilst the estimates of cost would go up by 50% what
would be your projection of the project completion time and the phasing of expenditure?
From now onwards

10. You are exposed to following situations. As an experienced project manager, justify
your decisions in each case.

Situation 1: Below are several factors that can result in project delays and cost overruns. Explain
how these problems can be overcome.
A. Poorly defined milestones
B. Poor estimating techniques
C. A missing PERT/CPM chart
D. Functional managers not having a clear understanding of what has to be done
E. Poor programming procedures and techniques
F. Changes constantly being made deep in the project's life cycle

Situation 2: Alpha Company has implemented a plan whereby functional managers will be held
totally responsible for all cost overruns against their (the functional managers') original estimates.
Furthermore, all cost overruns must come out of the functional managers' budgets, whether they
be overhead or otherwise, not the project budget. What are the advantages and disadvantages of
this approach?

Situation 3: Karl has decided to retain a management reserve on a $400,000 project that includes
a $60,000 profit. At the completion of the project, Karl finds that the management reserve fund
contains $40,000. Should Karl book the management reserve as excess profits (i.e., $100,000), or
should he just book the target profit of $60,000 and let the functional managers "sandbag" on the
slush fund until it is depleted?

Situation 4: The successful implementation of project management requires overcoming several

difficulties and problems. For each of the items listed below, state whether overcoming the
obstacles would be easier for U.S. corporations, or developing countries (like India), assuming
both are interested in implementing project management:
A. Good forward-planning capability
B. Understanding the importance of project management
C. Availability of computers
D. Understanding of project management principles by remote-site personnel and
subcontractors

4
 E. Ability to update status as events are completed
F. Understanding the reasons for the need of trade-offs
G. Centralization of decision making
H. Short-term resource control
I. Ability to assimilate large amounts of data
J. Variety and frequency of political changes
K. Variety and frequency of economic changes
L. Governmental supporting-policy measures
M. Inadequacies of subcontractors
N. Lack of accurate information

11. Speciality Services, Inc., is a field computer repair operation serving the small commercial
industry in seven states. Speciality Services has one operation in each state, and they vary in
size from 50 to 240 employees. A disturbing trend has been developing for the last couple of
years that Speciality Service management wishes to stop. The incidence of tardiness and
absenteeism is on the increase. Both are extremely disruptive in a custom packing operation.
Speciality Service is nonunion in all seven locations, and since management wants to keep
this situation, it wants a careful, low-key approach to the problem. Jason Horn, assistant
personnel manager, has been appointed project manager to recommend a solution. All seven
operations managers have been assigned to work with him on this problem. Jason has had no
problem interfacing with the operations mangers. They have very quickly agreed that three
steps must be taken to solve the problem:
A. Institute a uniform daily attendance report that is summarized weekly and
forwarded to the main office. (Current practice varies from location to location, but
comments on attendance are normally included in monthly operations reports)
B. Institute a uniform disciplinary policy, enforced in a uniform manner
C. Initiate an intensive employee education program to emphasize the importance of
good attendance.
The team has further decided that the three-point program should be tested before a final
recommendation is presented. They have decided to test the program at one location for two
months. Jason wishes to control and evaluate the test by having the daily attendance report
transmitted to him directly at headquarters, from which he will make the final decision on
whether to present the program in its current format or not.

Questions:
a) Does this monitoring and control method appear adequate?
b) What are the potential problems?