Chapter 8

Question 1

What causes project trade-offs?

Answer 1

Shifts in the relative importance of criterions related to cost, time, and performance parameters
• Budget-Cost
• Schedule-Time
• Performance-Scope

Question 2

Managing the Priorities of Project Trade-offs

Answer 2

1. Constrain
a parameter is a fixed requirement
2. Enhance
optimising a parameter over others
3. Accept
reducing (or not meeting) a parameter requirement

Question 3

Performance, cost and time relationships

Answer 3

• can only fix performance, cost and time simultaneously, if full and complete information on the project is available
  IF NOT AVAILABLE:
• fix 2 simultaneously, all risks are then automatically transferred to the third
• fix 1, , the other 2 are then traded other off against each other
• thus performance, time and cost must be managed integrally

Question 4

How to shorten a project that is too long?

Answer 4

1. Reduce the work

2. Add more resources among critical path activities

Question 5

To reduce duration, to which activity on the critical path do we add resources?

Answer 5

the activity with the SMALLEST scope

Question 6

How far can an activity be reduced?

Answer 6

• reduced to its crash time
• reduced until a parallel non-critical path becomes critical
• whichever happens first

Question 7

How to reduce cost?

Answer 7

Non-critical activities can be “relaxed” (stretched)

• either to use up their slack times, or
• until they reach their normal time
• whichever happens first.

Question 8

To reduce cost, which activity on the critical path do we relax first?

Answer 8

non-critical activity with the highest cost

Question 9

Variability of Activity Duration

Answer 9

the range of possible activity durations can be presented as a distribution curve

Question 10

PERT Technique

what does it stand for?

Answer 10

Program
Evaluation
and Review
Technique

Question 11

what is the PERT technique?

Answer 11

• address variability of the duration of activities on the critical path
• treats completion times as probabilistic (stochastic) events
• deals with uncertainty in projects, and to estimate project duration when activity times are hard to estimate

Question 12

PERT Technique: Durations is based upon three estimates for each activity

Answer 12

a = optimistic
m = most likely
b = pessimistic

Question 13

pessimistic duration (b)

Answer 13

exclude highly unlikely events

• earthquakes
• labor strikes

Question 14

PERT Technique: Compute Expected Time (te) of an activity

Answer 14

te = (a + 4m + b)/6

Question 15

PERT Technique: Compute Mean Project duration

Answer 15

Sum of te values of activities on the critical path = Te

Question 16

PERT Technique: compute the standard deviation for every activity

Answer 16

o = (b-a)/6
V=o^2
V = [(b-a)/6]^2

Question 17

Shortcomings of PERT

Answer 17

• assumes successor will start immediately when predecessors completed, also when an activity is completed earlier than indicated on the schedule
• PERT technique can provide false confidence
• PERT does not take behavioural aspects in account

Question 18

Managing Multi-project Scheduling

Answer 18

• Create project offices or departments to oversee
  the scheduling of resources across projects
• Use a project priority queuing system: first come, first served for resources
• Centralize project management: treat all projects as part of a “mega project”
• Apply Critical Chain Methods to all project scheduling
• Outsource projects/project sections to reduce the number of projects handled internally

Question 19

Multi-project Scheduling Problems

Answer 19

• Overall project slippage
- delay on one project create delays for other projects
• Inefficient resource application
- the peaks and valleys of resource demands create scheduling problems and delays for projects
• Resource bottlenecks
- shortages of critical resources required for multiple projects cause delays and schedule extensions

Question 20

Critical Chain Method

Answer 20

• claims to offer a solution to managing contingency reserves
• it is a Theory of Constraints (ToC) application to projects
• project duration is considered the constraint

Question 21

How do contingency reserves get wasted?

Answer 21

1. Student syndrome
2. Multi-tasking
3. Delays accumulate, but gains (working faster) don’t