Addis Ababa Science & Technology

University
College of Engineering

BSc Program in Electrical Engineering

Course Title: Industrial Management and

Engineering Economy

By: Ephrem Gidey (Dr.)

Address: B-64, R-207
E-mail: [email protected], Mob. 0911002935

May, 2024
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 Chapter Five
Project Management and Resource
Allocation
• Work breakdown structure
• Project organization
• Network scheduling
• Project crashing
• Resource allocation & labeling
• Project risks
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 Definition of Project
• “A project is a unique process consisting of a
set of co-ordinated and controlled activities
with start and finish dates, undertaken to
achieve an objective conforming to specific
requirements including the constraints of time,
cost and resources”
The International Organisation for Standards (ISO)

• Thus, a project management is a specialized

technique to plan and control available
resources for the successful completion of a
project.
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 Fundamentals of Project

• Has a specific purpose;

• Has not been done before;
• Has starting & ending time;
• Using new teams;
• Tight time constraints;
• Works across existing organizational
boundaries;
• Measured for whether objectives are met or not;

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The World Bank Model of Project Lifecycle

Identification

Evaluation Preparation

Implementation Appraisal/
Financing
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 Project Organization
• Every project, in some sense, is unique;
• Project organization affects project mgt;
• What is the difference between a project and a
process/organization;
• A process is a continuous activity, in which key
operations are repeated periodically;
• A project has definite start and end points, and
are set up to achieve a specific purpose;

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7
 WBS Vs. OBS
• A breakdown of the total project
(organization) task into components to
coordinate the work and to integrate resources;
i.e.,
 How the work will be done?
 How people will be organized?
 How resources will be allocated?
 How progress will be monitored?

• The difference emanates only from the basic

structure (projectized vs. process-focused)
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• WBS is a methodology for converting a large-
scale project into activities for planning,
scheduling, and control purposes;
• Helps to “roll up” elemental costs to get total
costs;

• WBS has elements clustered by level identifiers.

• Each WBS element is assigned a code;
• Alphanumeric codes may be used;

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 Network Diagrams
• A network is a flow diagram consisting of
activities and events, connected logically and
sequentially.

• In ND, usually an activity is represented by

arrow while an event is represented by circle.
 Project Scheduling

Types of Task Dependency

 FS: When A finishes, B may start,

A B

 FF: When A finishes, B may finish,

A
B
 SS: When A starts, B may start,
A
B

 SF: When A starts, B may finish,

A
B
 Gant Charts, Milestone Charts

• Help to show percentage complete and

remaining duration;

• Henry Gantt designed bar-chart as a visual aid

for planning and controlling his projects;

• Beginning & Ending of the Bar to represent the

start & finish times of activities;

• But, it didn’t show the logical relationship

between activities;

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 Gant Charts, Milestone Charts

Bar chart for a building Project

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 Sample Gant Chart of Feasibility Study on Cold Rolled
Mill Complex (MS Project)

ID Task Name Duration Start Finish Predecessors

Jan 24, '16 Jan 31, '16 Feb 7, '16 Feb 14, '16 Feb 21, '16 Feb 28, '16 Mar 6, '16
S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T
1 Feasibility Study on C.R Milll Complex 66 days? Mon 1/25/16Fri 4/15/16
2 Agreement on the contents of ToR 1 day?Mon 1/25/16
Mon 1/25/16
3 Modified ToR 1 day?Tue 1/26/16
Tue 1/26/16 2
4 Inception report preparation 1 day?
Wed 1/27/16
Wed 1/27/16 3 IE
5 Contract agreement signed up 1 day?Mon 1/25/16
Mon 1/25/16
6 Designing study methodology 4 days?Mon 1/25/16
Thu 1/28/16 IE
7 Modified inception report submission 1 day?Fri 1/29/16Fri 1/29/16 6
8 First round data collection 22 days?Mon 2/8/16Sat 3/5/16 7
9 Current producers of C.R.P in Ethiopia 17 days?Mon 2/8/16 Sat 2/27/16
10 Detailed Literatre review 15 days?Mon 2/8/16 Thu 2/25/16 IE
11 Interviewing officials-Industry bureau 5 days?Tue 2/16/16 Sat 2/20/16 IE
12 Industry survey 1 day?Sat 2/27/16
Sat 2/27/16 11 IE
13 Current demand of C.R.P 17 days?Mon 2/8/16 Sat 2/27/16
14 Current product varieties of C.R.P in ANRS's
11 days?Mon
market 2/8/16
Sat 2/20/16 MfE
15 Sales of C.R.P for the past two years 12 days?Mon 2/15/16 Sat 2/27/16 Market
16 Secondary data from government offices 12 days?Mon 2/15/16 Sat 2/27/16 IE
17 Survey recent mfg techno. of C.R.P 22 days?Mon 2/8/16Sat 3/5/16
18 Collect sec. data regarding exisitng techno11ofdays?Mon
C.R mfg2/8/16
Sat 2/20/16 MfE
19 Identification of machinery required 12 days?Mon 2/15/16 Sat 2/27/16 MfE
20 Identification of equipments & fixtures 1 day?Sat 3/5/16Sat 3/5/16 18 IE
21 Identification of suppliers 12 days?Sat 2/20/16Sat 3/5/16 MfE
22 Collect market prices 18 days?Fri 2/12/16Sat 3/5/16 ME
23 Custom issues 18 days?Fri 2/12/16Sat 3/5/16 Market
24 Identification of skill requirement 12 days?Sat 2/20/16Sat 3/5/16 IE
25 Products’ description & application 17 days? Mon 2/15/16Sat 3/5/16
26 Preliminary survey 12 days? Mon 2/15/16
Sat 2/27/16
IE
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27 Visiting similar industries 6 days?Mon 2/15/16
Sat 2/20/16
28 Surveying C.R products in the market 6 days?Mon 2/15/16 Sat 2/20/16 IE
• Different Categories of Activities
– Predecessor activity: an activity which must
be completed before another activity starts.
– Successor activity: an activity waits for other
activities to be completed;
– Concurrent activities: activities which can be
accomplished simultaneously;
– Dummy activity: an activity which does not
consume any resource but just depicts the
technical or technological dependence;
• Dummy activity is inserted in a network
to clarify the activity pattern; i.e.,
• To make activities with common starting
and finishing points distinguishable, and

• To identify and maintain the proper

precedence relationship between activities
that are not connected with arrows;

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• Ex-1: Consider a situation where A and B
are concurrent activities, C is dependent
on A, and D is dependent on A and B
both.
• Ex-2: Consider a case where B and C can
be started independently on completion
of A. But, D could be started only on
completion of B and C.
• Dummy activities are also useful in
establishing logical relationship in the arrow
diagram which otherwise cannot be
represented correctly.

• Ex. Suppose jobs a and b in a certain project

must precede job c; on the other hand, job e
is preceded by job b only.

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 Project Crashing
• Crashing is a compression technique applied
to CPM, to shorten the project duration, along
with least additional cost.

• It is a method for shortening the project

duration by reducing the time of one (or
more) of the critical project activities;

• The activity to be crashed may be:

• A larger activity that can support more resources
• A fairly common activity that doesn’t require high
specialization
• A task that can be completed modularly

• Focus on doing one at a time

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 Project Risks
• However small the percentage may be, there
is always uncertainty in any project;

• There is direct relation between the project

risk and expectation of return;

• Types of project risks

– General (or country) Risks;
– Special Project Risks
i) General (or country) Risks:
• It refers the ones that affect the overall sectors
of the country

• It includes factors such as a country’s economic

growth, its political environment, the tax code,
the legal system and the prevailing currency
exchange rate

• The general risks may be divided into three

major divisions:
– Political risks
– Country commercial risks
– Country legal risks
ii) Special Project Risks:
• Development risks: risks associated with the
bidding competition that occurs in the initial
stage of the process, losses caused by delays in
planning and approval;

• Construction/completion risks: the actual cost of

construction may be higher than forecasted
(cost overrun); completion may take longer
than projected (completion delays); or the
construction of the project may not be
completed at all.
• Operating risks: result from insufficiency in
performance, revenue income, material
supply etc; these may include: poor HR, poor
finance, poor quality of RM, etc
• Infrastructure risks: associated with facilities
outside the project, such as approach roads
and transmission lines;
• Technical risks
• Demand risks
• Supply risks
• Management risks
 Resource allocation & resource leveling
a) Resource Allocation
• Also called resource loading;
• It is deploying certain resources to project
plan activities;
• More than one resource and type of
resource can be allocated to each activity;
• Some project phases and activities require
fewer resources than others, and these
requirements can vary during the length on
the work; i.e.,
(Beginning (10-40), Intermediate (80-20), Ending (10-40))
b) Resource Leveling
• After using the resource allocation process to
define project resource requirements, resource
leveling is used to relate the requirements to
available resources;

• The leveling process ensures that resource

demand does not exceed available resources
during a particular time frame, and in light of
individual activity interdependencies.