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“Project Planning and Control Techniques” Chapter-1 Introduction Objectives of Project Management

• 123-

Project Phases: Pre-investment phases (studies phase) Investment phase (introduction phase) Operational phase.

Project goals (Objectives) in the construction phase

Cost

Time

Quality Figure-1 Cost: actual cost=planned cost Time: actual time=planned time. Quality: full conformance to the identified specifications the first time. • 123-

Project parties: Owner(project team) Contractor(project team) Consultant(Engineer)

*Estimated time=planned time=target time *estimated cost=budget cost=planned cost=targeted. 1

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“Project Objectives are achieved through” “Management of Project Resources” Project Resources: 12345-

Money Material ( purchasing , warehousing) Manpower Machine Method

Objectives of resources management are to save the resource with: 5 Rights: 12345-

Right Quantity Right Quality Right Price Right Time Right source

Right Quality= Acceptable Quality Level AQL=5% means up to 5% defective work is acceptable If actual percent defective exceeds the acceptable, we must apply quality improvement program Waste: 1- Unavoidable 2- Avoidable Right Quantity: is the quantity that minimizes total cost:

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Taking into account additional quantity to compensate for defective work (AQL) and unavoidable waste. Inventory cost: 1- Holding cost. 2- Carrying cost 3- Shortage cost Right price:

purchaser Fair price Seller

Right Time: the best time is “just in time JIT” Right source: is the source that is continuously capable of supplying the material with the first four rights. 5th M Method How to work with the right way that gives the required specification the first time at minimum time and cost. The “Methods” are included in the project “Quality Manual” that explains the “Quality Plan” in the form of 2 types of documents: - Procedures - Work instructions Management functions: 1234-

Planning Control Organization Supervision 3

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5- Coordination Top Management Middle Management Operationl Management

Figure 2 • Top Management Strategic Middle Management • Tactical Level (Cooperate Level) • Operational Level Operational Management 1-Planning: 6 Questions are to be answered in the planning process Ishikawas 5 WIS &1 H Technique: 123456-

What? Why? How? Who? When? Where?

Objectives Benefits of achieving objectives Method Who is held responsible for doing the work. The right time to do the job The right place to do the job

Objectives should be: SMART objectives: S: specific M: measurable A: Achievable. 4

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R: Reliable T: Timely 2-Control: 12345-

What to control? What is the standard? Questions to be answered How to measure the actual level? Comparison between the actual level and the standard level. Detection of variance

+ve

-ve

Variance

variance

6- Investigation to identify the cause of variance 7- Investigation to identify the corrective action. 8- Follow up. -The relationship between planning and control. Objective

Planning

Execution

Actual Results

Control

Monitoring

Control We should be proactive not reactive Planning and control cycle Figure-3 5

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3-Organization Means: 12-

Work breakdown based on: Fair work load. (according to the standard performance) Specialization. Identification of Responsibilities & Authorities (According to job description) 3- Delegation: For Authorities only. Delegation of “Responsibilities” is not allowed.

Look at page 216 Figure 1, 2, 3 Forms of project organization 1-function organization: Figure -4 No project team is assigned for the project company organizational functions are responsible for saving project resources. 2-project organization: Figure -5 A project team is formed with fixed size and faces mostly externally. 3-matrix organization: Figure -6 A project tem is formed with variable size and faces internally. Advantages and Disadvantages of project organization forms: Figure -7

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Figure (4) Functional Organization

Figure (5) Program Organization

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Figure (6)

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Figure (7) Organizational advantage matrix 4- Supervision: The main objective is to remove obstacles and to solve the technical and administrative problems. Supervision should keep human relations, loyalty and team spirit. 5- Coordination: Internally between team members and externally between the project team and other teams inside and outside the organization.

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Chapter .2 Project Planning Techniques Steps of Project Planning (For Example Power Plant Projec 1- Work Breakdown structure (WBS)

project sub project A Phase A (Studies Phase) Or Mile stone A

sub project B

C

Phase B (Civil Works) Mile stone B

Activity 1

Activity 2

Site preparation

Excavation

Supply & Installation of Equipment (Phase C) Mile Stone C

Bills of Materials

Material Procurement

Tender document

Task 1

Task 2

Task element 1

Phase D Commissioning & startup Phase Mile Stone D

3

Sub Act. B

Sub act. A

D

4

Concrete Pouring

Sub act C

Advertisements Task 3

Task element 2

Figure .8 10

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2- Time and cost estimation a- Network Planning Techniques:

Node number A 2 14days Node 1 B 3 3days

C 4 7days

D 4days

E 3days

5

F 10days

6

Figure 9-a Activity –on- Arrow Network Diagram Precedence relationship is expressed as follows: A precedes C A is a predecessor of C A is a prerequisite of C C is a successor of A AA Project duration = project completion time =35 days. (Critical Activities) A-C-D-F =35 days Critical path) longest Path) B-E-F=16 days. B&E

Non Critical Activities

If A &B Crash Duration Normal Cost < Crash Cost Crashing maybe required by

Owner *Cost slope=Extra Cost\Until Time reduction Cost

Direct - Direct Material Cost - Direct Labor Cost - Direct Equipment Cost *Direct cost Inversely Related to Time *Indirect cost Directly Related to Time

Contractor

Indirect - Site cost

crashing ‫ﺣﺩﻭﺩ ﻋﻣﻝ ﺍﻝ‬ Duration Normal Duration (Maximum Duration) 50 days 40 days (full Crash duration) 30 days Min. Duration

Cost 200,000 LE 380,000 LE 520,000 LE

Example of project crashing: Figures-23 &24& 25&26 Table 4&Table 5 &Table 6 32

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Page, 51 How to calculate min direct cost. If the project is to be crashed from normal duration 22 days to fall crash duration 17 days. 1

8

4

6

4.3 0

5

4

4

3

7 4 2 3 Figure-25 Critical Activities Arranged According to cost slope Activity 1-2 0-1 2-4 4-5

Cost slope $50\ Day 70 90 150

Table – 6 (steps of crashing) Activity Crash ( Days) 1-2 2 0-1 1 0-2( ‫ ﻣﺿﻁﺭ ﺍﺧﻔﺽ ﻫﺫﺍ ﺍﻟﻧﺷﺎﻁ‬1

Cost slope $ days 50 70 80

Cost increase 2× 50=100 1× 70=70 1 × 80=80

90 30 150

1× 90=90 1× 30=30 1× 150=150 520

non cr. ac

2-4 1-4 4-5

1 1 1

If indirect cost is taken into account, the total cost will be as shown in Figure-26 Example of total cost calculation see Table-7 and Figure -26

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Table 4

Figure 23

Table 5

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Figure 24

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Figure 26 36

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Assuming that the indirect cost/day= $130 The total cost will be as shown in Table-7.

Table 7

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Chapter 5 *Precedence Diagramming A C 2 14 7 1 B 3 3 E 14

4

D 4 5

F

6

A

0 21 c 25 D

35 F

Figure 27 no overlapping between activities

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Example: find the project duration for the project Activity-on-Node network show in Fig.-28

Figure 28 The Bar Chart for the project is given in Fig.29 0 12 A

7

17 B

19 D

19

28 E

24

35 F

32

42 G

Fig.-29 Example: Find the early start, early finish, late start and late finish for the activities of the project shown in fig.-30

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Figure 30 Forward Pass Computations-No splitting allowed The following two steps are applied to each project activity, in topological sequence. The term called INTIAL TIME is set equal to zero, or to an arbitrarily specified project scheduled start time. STEP1. Compute ESj , the early start time of the activity (j) in question. It is the maximum (latest) of the set of start times which includes the INTIAL TIME, and one start time computed from each constraint going to the activity (j) from predecessor activities indexed by (i).

INTIAL TIME EFi+FSij ESi=MAX𝑎𝑙𝑙𝑖

ESi+SSij EFi+FFij-Di ESi+SFij-Dj

STEP 2. EFj+=ESj +Dj+

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PRMG 010 ON-LINE DELIVERY 3.17.3. Backward Pass Computations-No Splitting Allowed The following two steps are applied to each project activity in the reverse order of the forward pass computations. The term called TERMINAL TIME is set equal to the project duration, or to an arbitrarily specified project scheduled completion time. STEP1. Compute LFi the late finish time of the activity (i) in question. It is the minimum ( earliest )of the set of finish times which include the TERMINAL TIME , and one finish time computed from each constraint going from activity (i), to successor activities indexed by (j). TERMINAL TIME LSj-FSIJ LFi = MIN𝑎𝑙𝑙𝑗

LFj-FFij LSj-SSij+Dj LFj-SFij +Dj

STEP 2. LSi=LFi-Di 3.17.4 Example Problem To illustrate the application of the above algorithm, a small network consisting of 9 activities with a variety of constraints, is shown in Figure 3.12. The forward pass calculations are as follows, based on the assumption that the project starts at time zero, i.e., INTIAL TIME=0. Activity A ESA= {INTIAL TIME=0} =0 EFA=ESA+DA=0+12=12 Activity B INTIAL TIME =0 ESB=

MAX𝐴

ESA+SSAB=0+3=3

=7

EFA+FFAB-DB=12+5-10=7 EFB=ESB+DB=7+10=17

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=7

MAX𝐵 ESB+SFBD-DD=7+ (2+10)-12=7

EFD=ESD+DD=7+12=19 Activity C INTIAL TIME =0 ESC=

ESA+SSAC=0+3=3

MAX𝐴,𝐷

=10

ESD+SFDC-DC=7+ (7+14)-18=10 EFC=ESC+DC=10+18=28

etc.

The backward pass calculations are as follows, wherein the TERMINAL TIME is set equal to the project duration, determined from the following pass calculations to be 42, i.e., the EF time for the last critical path activity G. Activity G LFG= {TERMINAL TIME=42} =42 LSG=LFG-DG=42-10=32 Activity I LFI= {TERMINAL TIME=42} =42 LSI=LFI-DI=42-7=35 Activity H TERMINAL TIME=42 LFH=MIN𝐼

=39 LFI-FFHI=42-3=39

LSH=LFH-DH=39-11=28

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LSG-SSFG+DF=32-8=35

=35

LSI-SSFI+DF=35-8+11=38 LSF=LFF-DF=35-11=24 etc.

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Chapter 6 Project Control Techniques Project Manager should exercise control on the three main project objectives: Quality, Time and cost. Needless to say that the actual time and actual cost of any job in the project will not be known unless the full conformance to the identified specifications is achieved. The project Manager Control is preformed through “Progress evaluation” including Time and cost: According to time schedule zero variance Time Behind schedule - ve variance A head schedule +ve variance a- According to time schedule means that the actual time taken to do the job equals or differs by an acceptable tolerance the planned (estimated time). It means also that the size of work actually done from the start of the project up to the time of progress evaluation is equal to the planned (estimated size of work) b- Behind schedule means that the actual time taken to do the job is greater than the planned (estimated time). If also means that cumulatively the total amount of work done for the short up to the time of progress evaluation is less that the planned amount. In that case the estimated time should firstly be reviewed may be it is underestimated which means that the contractor will not be able to handover the project in the contracted time without crashing. If the estimated time is correct this means that there should be a cause or more for the extra time taken. Investigation should be started to find out the cause or causes of this negative variance, accordingly the corrective action should be identified and the performance is followed up to make sure that the problem is solved.

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Beyond control like bad weather or disasters (no action) Cause of –ve variance Within control: i.e because of bad resources management (Corrective action should be taken) Actual time is less than planned time A head schedule Actual amount of work is cumulatively greater than planned amount - Time is overestimated means that the project can be handed over before contracted time. - Time is estimated correctly. There should be some causes to be identified and corrective actions to be taken. The cause cannot be originated. (Nothing to do) Cause of +ve variance The cause can be originated eg. Followed method is better than the standard method action should be taken to transform the actually followed method to be the standard method. According to cost schedule (actual cost=Budgeted cost) Cost Cost overrun (actual cost is greater than budgeted cost) Cost under run (actual cost is less than budgeted cost) Zero variance nothing to do -ve variance (Cost overrun)

zero variance - ve variance +ve variance

The cost is underestimated (the actual profit will be less than profit forecast) The cost is correctly estimated: there should be some causes for exceeding the estimated cost) identify the causes and the corrective actions. 45

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+ve variance (cost under run)

Cause of cost under run

The cost is overestimated (the actual profit will be greater than the profit forecast) The cost is correctly estimated. There should be some causes for under runidentify causes and try to originate the causes. The cause cannot be originated (eg. unexpected decrease in material price)nothing to do The cause can be originated eg. Actually followed method costs less than the standard method. Action should be taken to replace the standard method with the followed one.

Project Budgeting: For the example project shown in Fig.-31, Table -8 gives the calculated Early start and Late start schedules for the project activities. Fig.32 shows the same project network on a time scale. The monthly cost schedule and the cumulative cost schedule are given one time if all the activities are started at the early start and the other time if all the activities are started at the late started schedule. Fig. 33 give the S curves showing the relation between the time and the cumulative cost in cases of early start and late start schedules. Any curve inside the range of feasible budgets represents the cumulative budgeted cost of the project at any time.

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Figure 31 project Network with activity Costs

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Figure 32 Early and Late start Schedule Graphs.

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Table 8

Figure 33 cumulative Costs for Early and Late starts

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Time and Cost Progress Evaluation For the example Project shown in Fig.34, the curve A represents the cumulative budgeted cost according to the start of the non. Critical activity selected by the project manager any time between the early start and late start of each activity. It is obvious from curve that the project planned duration is 15 months and project total budgeted cost is $ 6 million. Curve B represents the cumulative actual cost and curve C represents the cumulative value of work completed (earned value) If the project progress is evaluated at end of October (Fig.34), it is obvious that the project is behind schedule by 2 months and one third and that there is a cost overrun of $2.3 million The evaluation method is explained in Fig.35.

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Figure 34Schedule of Budgeted versus Actual costs and Work

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B $4.7X106 A C $ 2.4X106

Cost variance =C-B =2.4X10c -4.7X106 =-$ 2.3X106 over run Over run %= 4.7𝑋106 −2.4𝑋106 2.4𝑋16

behind schedule

=100% over run

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Fig. 35 The progress evaluation indicates the following: a- The project is behind schedule and suffers cost overrun starting from month no.1 up to month no.10. b- The project will end by a total cost overrun of $2.3 × 106 at least which means that the profit forecast is negative. 1

c- The project will be handed over 2 3 months late at least unless some of the remainder activities are crashed which will increase the cost overrun

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After evaluation, the two main project parties the owner and the contractor should be informed: - For the owner: The project will not be handed over at the end of march as contracted. The owner needs to know the new handover date once and for all. - For the contractor: He will not be able to hand the project over at the end of March which means the he will not receive the total project value from the owner. The will cause uncertainty in cash flow plans. In addition there will be uncertainly about the time at which he can take new projects according the available capacity.. - For the contractor the six million dollars allocated for the project will not be enough to complete it. There is uncertainty about the extra budget to be allocated. For more elaboration Table-9 gives an example for the method of evaluating the time and cost progress.

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Table 9

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Example: If the project is concrete pouring only and at a certain progress evaluation date the situation is as shown in Table-10 Table-10 Quality of Cost\m 3 (LE) Cumulative c...