Project management : processes, methodologies, and economics

Centering on theory and practice, this book presents tools and techniques most suited for modern project management. From budgeting to scheduling and control, the authors show the relationship between project planning and implementation. Expands analytic techniques using the latest standard software. Contains fundamental concepts in project management. Builds case studies with continuing compounded information. For those interested in learning more about project management and as a reference for managers, engineers and technology experts.

Author Notes

Avraham Shtub is the Sharon and Stephen Seiden Professor of Project Management in the School of Industrial Engineering and Management at the Technion Israel Institute of Technology. He received the Ph.D. degree in management science and industrial engineering from the University of Washington, the M.B.A. degree from Tel Aviv University, and the B.Sc. degree in electrical engineering from the Technion. He is a senior member of the Institute of Industrial Engineers and is certified as a Project Management Professional by the Project Management Institute. Professor Shtub's research focuses on the design and management of manufacturing systems, project management, and learning and forgetting. He is on the editorial boards of IIE Transactions and the International Journal of Production Research, and has previously served on the editorial boards of the Project Management Journal and the International Journal of Project Management.

Jonathan F. Bard is a professor of operations research and industrial engineering in the Mechanical Engineering Department at the University of Texas at Austin. He holds the Industrial Properties Corporation Endowed Faculty Fellowship, and serves as the Associate Director of the Center for the Management of Operations and Logistics. He received the D.Sc. degree in operations research from the George Washington University, the M.S. degree in aeronautics and astronautics from Stanford University, and the B.S. degree in aeronautical engineering from Rensselaer Polytechnic Institute. Professor Bard's research interests are in the design and analysis of manufacturing systems, personnel scheduling, R&D project management, and vehicle routing. Prior to beginning his academic career, he worked as a program manager for the Aerospace Corporation and as a systems engineer for Booz, Allen & Hamilton. He is currently the editor of IIE Transactions on Operations Engineering and serves on the editorial board of several other journals. He is a Fellow of IIE and a Senior Member of IEEE and INFORMS.

Shlomo Globerson is a professor in the School of Business Administration at Tel Aviv University. He received the Ph.D. degree in industrial engineering from the University of California, Berkeley, the M.S. degree in industrial engineering from the Faculty of Industrial Engineering and Management at the Technion Israel Institute of Technology, and the B.Sc. degree in mechanical engineering from the Technion. His primary research and teaching activities center on project management and operations management. He has published seven books and over 80 articles. Professor Globerson is the former President of the Israeli chapter of the Project Management Institute and currently serves on the advisory board for the Industrial Engineering Handbook. He is also on the editorial boards of the Journal of Operations Management and the International Journal of Project Management.

Nomenclature	p. xv
Preface	p. xvii
About the Authors	p. xx
1 Introduction	p. 1
1.1 Nature of Project Management	p. 1
1.2 Relationship Between Projects and Other Production Systems	p. 2
1.3 Characteristics of Projects	p. 4
1.4 Project Manager	p. 14
1.5 Components, Concepts, and Terminology	p. 17
1.6 Movement to Project-Based Work	p. 24
1.7 Life Cycle of a Project: Strategic and Tactical Issues	p. 25
1.8 Factors that Affect the Success of a Project	p. 28
1.9 About the Book: Purpose and Structure	p. 30
Team Project	p. 34
Discussion Questions	p. 37
Exercises	p. 38
Bibliography	p. 40
Appendix 1A Engineering Versus Management	p. 41
References	p. 44
2 Process Approach to Project Management	p. 45
2.1 Introduction	p. 45
2.2 Project Management Processes	p. 51
2.3 Project Integration Management	p. 52
2.4 Project Scope Management	p. 56
2.5 Project Time Management	p. 58
2.6 Project Cost Management	p. 60
2.7 Project Quality Management	p. 61
2.8 Project Human Resource Management	p. 62
2.9 Project Communications Management	p. 63
2.10 Project Risk Management	p. 65
2.11 Project Procurement Management	p. 67
2.12 The Learning Organization and Continuous Improvement	p. 70
2.13 Organizational Project Management Maturity Model	p. 72
Team Project	p. 72
Discussion Questions	p. 73
Exercises	p. 73
Bibliography	p. 74
3 Engineering Economic Analysis	p. 75
3.1 Introduction	p. 75
3.2 Compound Interest Formulas	p. 78
3.3 Comparison of Alternatives	p. 87
3.4 Equivalent Worth Methods	p. 91
3.5 Sensitivity and Breakeven Analysis	p. 105
3.6 Effect of Tax and Depreciation on Investment Decisions	p. 108
3.7 Utility Theory	p. 119
Team Project	p. 131
Discussion Questions	p. 135
Exercises	p. 136
Bibliography	p. 146
4 Life-Cycle Costing	p. 147
4.1 Need for Life-Cycle Cost Analysis	p. 147
4.2 Uncertainties in Life-Cycle Cost Models	p. 150
4.3 Classification of Cost Components	p. 153
4.4 Developing the LCC Model	p. 160
4.5 Using the Life-Cycle Cost Model	p. 167
Team Project	p. 168
Discussion Questions	p. 168
Exercises	p. 169
Bibliography	p. 171
5 Project Screening and Selection	p. 173
5.1 Components of the Evaluation Process	p. 173
5.2 Dynamics of Project Selection	p. 175
5.3 Checklists and Scoring Models	p. 177
5.4 Benefit-Cost Analysis	p. 180
5.5 Cost-Effectiveness Analysis	p. 188
5.6 Issues Related to Risk	p. 191
5.7 Decision Trees	p. 203
5.8 Real Options	p. 216
Team Project	p. 218
Discussion Questions	p. 220
Exercises	p. 221
References	p. 229
Appendix 5A Bayes' Theorem for Discrete Outcomes	p. 231
6 Multiple Criteria Methods for Evaluation	p. 233
6.1 Introduction	p. 233
6.2 Framework for Evaluation and Selection	p. 233
6.3 Multiattribute Utility Theory	p. 236
6.4 Analytic Hierarchy Process	p. 242
6.5 Group Decision Making	p. 250
Team Project	p. 254
Discussion Questions	p. 254
Exercises	p. 255
Bibliography	p. 258
Appendix 6A Comparison of Multiattribute Utility Theory with the Analytic Hierarchy Process: Case Study	p. 261
References	p. 278
7 Scope and Organizational Structure of a Project	p. 279
7.1 Introduction	p. 279
7.2 Organizational Structures	p. 280
7.3 Organizational Breakdown Structure of Projects	p. 289
7.4 Project Scope	p. 298
7.5 Combining the Organizational and Work Breakdown Structures	p. 308
7.6 Management of Human Resources	p. 311
Team Project	p. 323
Discussion Questions	p. 324
Exercises	p. 324
Bibliography	p. 326
8 Management of Product, Process, and Support Design	p. 329
8.1 Design of Products, Services, and Systems	p. 329
8.2 Role of the Project Manager	p. 333
8.3 Importance of Time and the Use of Teams	p. 334
8.4 Supporting Tools	p. 344
8.5 Quality Management	p. 360
Team Project	p. 371
Discussion Questions	p. 372
Exercises	p. 373
Bibliography	p. 373
9 Project Scheduling	p. 377
9.1 Introduction	p. 377
9.2 Estimating the Duration of Project Activities	p. 383
9.3 Effect of Learning	p. 393
9.4 Precedence Relations Among Activities	p. 395
9.5 Gantt Chart	p. 397
9.6 Activity-on-Arrow Network Approach for Critical Path Method Analysis	p. 401
9.7 Activity-on-Node Network Approach for Critical Path Method Analysis	p. 413
9.8 Precedence Diagramming with Lead-Lag Relationships	p. 416
9.9 Linear Programming Approach for Critical Path Method Analysis	p. 422
9.10 Aggregating Activities in the Network	p. 424
9.11 Dealing with Uncertainty	p. 425
9.12 Critique of PERT and CPM Assumptions	p. 434
9.13 Critical Chain Process	p. 436
9.14 Scheduling Conflicts	p. 437
Team Project	p. 438
Discussion Questions	p. 439
Exercises	p. 440
Bibliography	p. 447
Appendix 9A Least-Squares Regression Analysis	p. 450
Appendix 9B Learning Curve Tables	p. 452
Appendix 9C Normal Distribution Function	p. 455
10 Resource Management	p. 457
10.1 Effect of Resources on Project Planning	p. 457
10.2 Classification of Resources Used in Projects	p. 458
10.3 Resource Leveling Subject to Project Due-Date Constraints	p. 461
10.4 Resource Allocation Subject to Resource Availability Constraints	p. 465
10.5 Priority Rules for Resource Allocation	p. 469
10.6 Critical Chain: Project Management by Constraints	p. 472
10.7 Mathematical Models for Resource Allocation	p. 472
10.8 Projects Performed in Parallel	p. 475
Team Project	p. 476
Discussion Questions	p. 476
Exercises	p. 477
Bibliography	p. 482
Appendix 10A Estimating Peak Resource Requirements	p. 484
11 Project Budget	p. 487
11.1 Introduction	p. 487
11.2 Project Budget and Organizational Goals	p. 489
11.3 Preparing the Budget	p. 491
11.4 Techniques for Managing the Budget	p. 494
11.5 Presenting the Budget	p. 505
11.6 Project Execution: Consuming the Budget	p. 507
11.7 Important Points in the Budgeting Process	p. 508
Team Project	p. 509
Discussion Questions	p. 509
Exercises	p. 510
Bibliography	p. 515
12 Project Control	p. 517
12.1 Introduction	p. 517
12.2 Common Forms of Project Control	p. 520
12.3 Integrating the OBS and WBS with Cost and Schedule Control	p. 523
12.4 Reporting Progress	p. 537
12.5 Updating Cost and Schedule Estimates	p. 538
12.6 Technological Control: Quality and Configuration	p. 541
12.7 Line of Balance	p. 541
12.8 Overhead Control	p. 546
Team Project	p. 549
Discussion Questions	p. 549
Exercises	p. 550
Bibliography	p. 552
Appendix 12A Example of a Work Breakdown Structure	p. 554
Appendix 12B Department of Energy Cost/Schedule Control Systems Criteria	p. 556
13 Research and Development Projects	p. 561
13.1 Introduction	p. 561
13.2 Risk Factors	p. 563
13.3 Managing Technology	p. 567
13.4 Strategic R&D Planning	p. 572
13.5 Parallel Funding: Dealing with Uncertainty	p. 576
13.6 Managing the R&D Portfolio	p. 580
Team Project	p. 590
Discussion Questions	p. 590
Exercises	p. 591
Bibliography	p. 592
Appendix 13A Portfolio Management Case Study	p. 595
14 Computer Support for Project Management	p. 601
14.1 Introduction	p. 601
14.2 Use of Computers in Project Management	p. 602
14.3 Criteria for Software Selection	p. 617
14.4 Software Selection Process	p. 622
14.5 Software Implementation	p. 628
14.6 Project Management Software Vendors	p. 630
Team Project	p. 630
Discussion Questions	p. 630
Exercises	p. 631
Bibliography	p. 632
Appendix 14A PMI Software Evaluation Checklist	p. 634
15 Project Termination	p. 645
15.1 Introduction	p. 645
15.2 When to Terminate a Project	p. 646
15.3 Planning for Project Termination	p. 650
15.4 Implementing Project Termination	p. 655
15.5 Final Report	p. 655
Team Project	p. 656
Discussion Questions	p. 657
Exercises	p. 657
Bibliography	p. 658
Index	p. 661

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