IS4100 - Revision PDF

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QUICK REFERENCE GUIDE

Project TIME Management: Critical Path Method PERT%weighted%average =

optimistic%time + 4 × most%likely%time + pessimistic%time 6

Algorithm ES EF 1) Draw the Network Diagram Slack ID Duration a. Fill in Activity ID and Duration LS LF b. Set ES>?@A? = 0 2) Forward Pass: Compute Early Start/Early Finish for all activities from start to finish a. EFD = ESD + DurationD if x+1 has multiple predecessors b. ESDHI = Max(EFD)( +𝐿𝑎𝑔%𝑂𝑅 − 𝐿𝑒𝑎𝑑 ) c. Repeat for all tasks from start to finish 3) Backward Pass: Compute LS/LF for all activities from finish to start a. Set LFW@>? = EFW@>? b. LSD = LFD − DurationX (−𝐿𝑎𝑔%𝑂𝑅 + 𝐿𝑒𝑎𝑑) c. LFDYI = Min(LSD )%𝑖𝑓%𝑥 − 1ℎ𝑎𝑠%𝑚𝑢𝑙𝑡𝑖𝑝𝑙𝑒%𝑠𝑢𝑐𝑒𝑠𝑠𝑜𝑟𝑠 d. Repeat for all tasks from finish to start 4) Calculate Slack for all activities a. SlackD = LSD − ESD = LFD − EFD 5) Critical Path: Sequence of activities with Slack = 0 Note: In Prof’s solutions, the ES is inclusive and ESx+1 is ++ to reflect the next working day Stick to one convention and write as assumption

Dependencies Start-to-Start (SS) Forward%Pass:%ES@ + [Lag] = ESk % Backward%Pass:%LSk − [Lag] = LS@ Note: There is no ++ since you’re supposedly resting for day 7, 8

Finish-to-Finish (FF) Forward%Pass:%ES@ + [Dur − 1] = EFm % 𝐸𝐹@ + [Lag] = EFk % EFk − [Dur − 1] = ESk

Backward%Pass:%LFk − [Dur − 1] = LSp % 𝐿𝐹k − [Lag] = LF@ % LF@ − [Dur − 1] = LS@

Note: FF link connects end-of-day to end-of-day, so there’s no need to ++/--

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Start-to-Finish (SF) Forward%Pass:%ES@ + [Lag − 1] = EFp % Backward%Pass:%LFk − [Lag − 1] = LSm

Finish-to-Start (FS) aka the normal one Forward%Pass:%ES@ + [Dur − 1] = EFm % 𝐸𝐹@ + [Lag + 1] = ESk % ESk + [Dur − 1] = EFk

Backward%Pass:%LFk − [Dur − 1] = LSp % 𝐿𝑆k − [Lag + 1] = LF@ % LF@ − [Dur − 1] = LS@

Free Slack VS Total Slack: (Total Slack/Free Slack) Total Slack Time an activity can be delayed without delaying the overall schedule completion Total%Float%for%A = LF − EF

Float%for%A = 20 − 15% =5

Free Slack Time an activity can be delayed without delaying the earliest start of any succeeding activity Free%Float%for%V = (Successor min(ES) − [Lag + 1] − EFx

𝐹𝑟𝑒𝑒%𝐹𝑙𝑜𝑎𝑡m = 19 − [2 + 1] − 16% =0

Overlapping Activities & Ladders Forward Pass Based on SS link from M: 𝐸𝑆z = 6 + 5 = 11 Based on FF link from M: 𝐸𝐹z = 15 + 3 = 18 ð 𝐸𝑆z = 18 − [5 − 1] = 14 ∴ 𝐸𝑆z = 14 is the worst case scenario Backward Pass Based on FS link: 𝐿𝐹z = 22 − [0 + 1] = 21 Based on FF link: 𝐿𝐹z = 30 − [3] = 27 Based on SS link: 𝐿𝑆z = 24 − [5] = 19 ð 𝐿𝑆z = 19 + [5 − 1] = 23 ∴ % 𝐿𝐹z = 21 is the worst case scenario

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Project Selection Evaluation: Financial Analysis Net Economic Benefits (/yr): Initial One-time Development Cost: Recurring Cost (/yr): System Time Horizon: Discount Rate: Discount Factor

NEB DC

If more than one discount rate is introduced E(X)

0

1

2

3

4

5

Discount Factor at t

1

Discount Factor at t

1

0.90909

0.82645

0.75131

0.68301

0.62092

0

1

2

3

4

5

Benefits

E(X)

Totals

Net Economic Benefit

-

Net Economic Benefit

-

Net Economic Benefit

-

Populate values here, e.g.,

Net Economic Benefits, i.e., before PV-ed Additional rows in case delays cause benefits to be postponed

Expected Net Economic Benefits

Find the E(Net Economic Benefits) for each year

PV Benefits

Apply PV to each year

ç If necessary, i.e., another scenario where i/r changes

PV Benefits Expected PV of Benefits

E(PV Benefits) of each year ∑𝑃𝑉p‚ƒ‚„…†‡

NPV of all Benefits

Costs

E(X)

0

1

Costs

DC

Costs

DC

Expected Costs

-

PV of Total Costs PV of Total Costs

-

E(PV Costs) of each year ∑𝑃𝑉ˆ‰‡†‡ 0 ∑𝑁𝑃𝑉

1

2

3

4

5

Overall NPV per year is the sum of NPV benefits and NPV costs The amount from previous plus amount gain (loss) this year

𝑅𝑂𝐼 =

𝑂𝑣𝑒𝑟𝑎𝑙𝑙%𝑁𝑃𝑉 𝑡𝑜𝑡𝑎𝑙%𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑%𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠 − 𝑡𝑜𝑡𝑎𝑙%𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑%𝑐𝑜𝑠𝑡𝑠 = 𝑡𝑜𝑡𝑎𝑙%𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑%𝑐𝑜𝑠𝑡𝑠 𝑁𝑃𝑉%𝐶𝑜𝑠𝑡 0

Payback Analysis Cumulative Benefits

1

2

3

4

5

Carry-over benefits plus PV benefits reaped this year

Cumulative Costs Payback

5

Find E(Cost) for each year Apply PV to each year

NPV Cashflow Overall ROI

4

ç If necessary, i.e., another scenario where i/r changes

Overall NPV Overall NPV

3

Similar to Benefits. Compute Costs under different scenario

Expected PV of Costs NPV of all Costs

2

Carry-over costs plus PV costs incurred this year 𝑥%years

When cumulative%benefits = cumulative%costs

Internal Rate of Returns: The max i/r I can take for project to breakeven è higher IRR, more resilient to changes

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Project COST Management: Earned Value Method Planned Value (PV) Actual Cost (AC) Use monetary terms Earned Value (EV)

AKA Budgeted Cost of Work Scheduled (BCWS) Approved total cost estimate planned to be spent on an activity during a given period AKA Actual Cost of work performed (ACWP) Total direct and indirect costs incurred in accomplishing work on an activity during a given period EV = PV%to%date × RP

AKA Budgeted Cost of Work Performed (BCWP) The value of the physical work actually completed Based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date Rate of Performance (RP)

RP =

Actual%Work%Done %%of%PV%to%be%done

The ratio of actual work completed to the percentage of work planned to have been completed at any given point of time Cost Variance (CV) Use monetary terms Cost Performance Index (CPI) Schedule Variance (SV)

CV = EV − AC

The difference how work the project or activity actually costs and how much it was planned for EV CPI = AC

If the project stays on this trajectory, the project will be over-/under-budget SV = EV − PV

The difference between planned value and earned value. The amount of task completed at the point of time Schedule Performance Index (SPI) Budget at Completion (BAC) Use monetary terms Estimate at Completion (EAC) Use monetary terms Estimated time to Complete (ETC)

SPI =

EV PV

If the project stays on this trajectory, the project will be ahead/behind schedule Sum of all planned costs of all assigned resources plus any fixed costs. ð Reflects BCWS EAC =

BAC CPI

The expected total cost of a task at completion. If CPI is BAC Original%Time%for%completion SPI

The expected duration required to complete project at current trajectory To-CompletePerformance Index (TCPI)

TCPI•@– =

BAC − EV EAC − AC

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