Chapter 7 The Project Schedule and Budget Copyright 2012 John Wiley & Sons, Inc. 7-1

Chapter 7

The Project Schedule and Budget

Copyright 2012 John Wiley & Sons, Inc.7-1

Precedence Diagramming Method - PDM

Based on 4 fundamental relationships Finish-To-Start (FS) Start-To-Start (SS) Finish-To-Finish (FF) Start-To-Finish (SF)

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If people build safety into their estimates, then …

Why are projects still late?

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Be Aware of Resource Loading

Resource loading

Over allocation

4

Resource Leveling

5

Benefits of Resource Leveling

6

Critical Chain Project Management (CCPM)

Introduced in 1997 in a book called Critical Chain by Eliyahu Goldratt

Based on his previous work called the Theory of Constraints

CCPM is based on the idea that people often inflate or add cushioning to their estimates to create a form of “safety” to compensate for uncertainty or risk because … Your work is dependent upon the work of someone else,

and you believe that starting your work will be delayed Your pessimism from previous experience where things

did not go as planned Your belief that the project sponsor or customer will cut

your project schedule or budget so you inflate your estimates to guard against this cut

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CCPM Assumptions

Begins by asking each person or team working on a task to provide an estimate that would have a 50% chance of being completed as planned

Instead of adding safety to each task, put that safety in the form of buffers where it is needed most

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A B C

D

E

10 Days 10 Days 10 Days 10 Days

10 Days

A B C E

D

5 Days 5 Days 5 Days 5 Days

5 Days

10

Project Schedule with Safety in Each Task

Critical Chain Project Schedule

2.5 Days

Buffers

The Critical Chain Project Schedule

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Critical Chain Project Management

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Developing the Project Budget

1.

2.

3.

4.

5.

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Types of Costs and Benefits

Other Costs

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Planning Cost Management

The project team uses expert judgment, analytical techniques, and meetings to develop the cost management plan

A cost management plan includes: Level of accuracy and units of measure Organizational procedure links Control thresholds Rules of performance measurement Reporting formats Process descriptions

Determining the Budget

Cost budgeting involves allocating the project cost estimate to individual work items over time

The WBS is a required input to the cost budgeting process since it defines the work items

Reserve analysis must occur

Figure 7-4. Surveyor Pro Project Cost Baseline

Project Management Software Tools

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Finalizing the Project Schedule and Budget

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