An Introduction to Project Modeling and Planning

Description

This textbook teaches the basic concepts and methods of project management, but also explains how to convert it to useful results in practice. Project management offers a promising working area for theoretical and practical applications, and developing software and decision support systems (DSS). This book specifically focuses on project planning and control, with an emphasis on mathematical modeling. Models and algorithms establish a good starting point for students to study the relevant literature and support pursuing academic work in related fields. The book provides an introduction to theoretical concepts, and it also provides detailed explanations, application examples and case studies that deal with real life problems. The chapter topics include questions that underlie critical thinking, interpretation, analytics, and making comparisons. Learning outcomes are defined and the content of the book is structured in accordance with these goals. Chapter 1 begins by introducing the basic concepts, methods and processes of project management. Chapter 2 explores the fundamentals of organizing and managing projects from an organization’s perspective. Issues related to project team formation, role of project managers, and matrix organization are discussed. Chapter 3 is devoted to project modeling and planning. It explains how to collect proper data in order to perform an analysis and develop mathematical models. Chapter 4 introduces deterministic scheduling models, which can be used in constructing the time schedules. Models employing time-based and finance-based objectives are introduced. Chapter 5 focuses on the time/cost trade-off problem, explaining how to reduce the duration of some of the activities and therefore accelerate the project duration at the expense of additional costs.  Chapter 6 introduces different resource management policies including resource portfolio management.  Chapter 7 discusses models and methods of scheduling in case of uncertainty models and methods of scheduling in case of uncertainty. Chapter 8 highlights contract types and payment schedules. It explores identification and allocation of risk in contracts, project control issues, disputes and resolution management. Different models and decision support systems are presented in Chapter 9 in order to investigate client-contractor negotiations and the bidding process from different aspects. Chapter 10 covers monitoring and control, mainly the processes and methods behind them. Chapter 11 brings together qualitative and quantitative techniques with simulation and software applications. The design of a risk management process is introduced in detail and at the hand of a case study. Chapter 12 examines several models and approaches of uncertainty in project scheduling, dealing with various aspects of stochastic nature of the decision environment and robustness. Chapter 13 explains the mathematical formulation and solution procedures for resource constrained project scheduling. The project selection problem is inherently a multi-objective problem and is treated as such in Chapter 14. Several models and solution techniques including robust selection methods are introduced. Finally Chapter 15 evaluates recent approaches and promising research areas in project management including strategic project management, agile approaches, and data management in project modeling in the big data era. Preface Acknowledgement Contents 1: Introduction to Project Modeling and Planning 1.1 What Is a Project? 1.2 Project Management in Today´s World 1.3 Challenges in Keeping to Scope, Cost, and Schedule Targets 1.4 A Life Cycle Concept for Projects 1.4.1 Conceptual Design and Project Definition 1.4.2 Planning 1.4.3 Implementation, Monitoring, and Control 1.4.4 Evaluation and Termination 1.5 Post-Project Analysis 1.6 Uncertainty and Risks in Projects 1.7 Project Modeling and Planning Tools 1.8 Resource Constrained Modeling 1.9 Agile Project Management Exercises References 2: Organizing and Managing Projects 2.1 Projects and Organizational Structure 2.1.1 Functional Organizations 2.1.2 Project Organizations 2.1.3 Matrix Organizations 2.2 How to Choose the Project Management Structure? 2.3 Stakeholder Management 2.4 Project Management Culture 2.5 Organizing Projects 2.5.1 Steering Committee 2.5.2 Project Sponsor 2.5.3 Project Manager 2.5.4 Project Team and Team Members 2.5.4.1 Desirable Skills and Characteristics of Team Members 2.5.4.2 Geographically Distributed Project Teams 2.5.5 Project Meetings 2.6 Project Management Office 2.7 Program Management 2.8 Project Portfolio Management 2.9 Agile Project Management 2.10 Conclusions, Recent Developments, and Some Future Research Directions Exercises References 3: Planning and Network Modeling of Projects 3.1 Project Scope 3.1.1 Project Charter 3.2 Work Breakdown Structure 3.2.1 Decomposition of WBS into Work Packages 3.2.2 Types of WBS Representation 3.2.3 Gantt Chart Representation of Work Packages 3.2.4 Organizational Breakdown Structure 3.2.5 Cost Breakdown Structure 3.2.5.1 Bottom-Up Costing - Cost Aggregation 3.2.5.2 Cost Accounts 3.3 Network Modeling of Projects 3.3.1 Types of Models 3.3.2 Network Modeling of Projects 3.3.2.1 Hammock Activities 3.3.3 Activity on Arc Type Representation 3.3.3.1 Network Construction Rules 3.3.3.2 Checking for Cyclic Project Networks 3.3.4 Activity on Node Type Representation 3.3.5 Generalized Precedence Relationships 3.3.6 Level of Aggregation in Project Networks 3.3.6.1 Milestones 3.3.6.2 Summary Activities 3.3.7 Network Modeling of Multiple Projects 3.4 Estimating Activity Durations 3.4.1 Tools for Estimating Activity Durations 3.5 Cost Management 3.5.1 Tools for Estimating Activity Cost 3.5.2 Types of Project Costs 3.5.3 Activity-Based Costing 3.6 Data, Information, and Knowledge Management 3.6.1 Which Data to Collect? 3.6.2 With Which Frequency to Collect Data? 3.6.3 With Which Tools to Collect and Integrate Data? 3.6.4 With Which Tools and How to Analyze Data? 3.7 Conclusions, Recent Developments, and Some Future Research Directions Exercises References 4: Deterministic Project Scheduling with No Resource Constraints 4.1 Introduction 4.2 Critical Path and Its Determination 4.2.1 Critical Path Method 4.2.1.1 Critical Path Method on Activity-on-Arc Type Project Networks 4.2.1.2 Critical Path Method on Activity-on-Node Type Project Networks 4.2.1.3 Criticality and Slacks for the Case of Generalized Precedence Relationships 4.2.1.4 Sensitivity Analysis 4.3 Linear Programming Formulation 4.4 Maximizing the Net Present Value of a Project Under No Resource Constraints 4.4.1 A Zero-One Mathematical Programming Formulation 4.4.2 Time Dependent Cash Flows 4.5 Keeping the Project Plan Current 4.6 Conclusions, Recent Developments, and Some Future Research Directions 4.7 Case Study: Installation of a Plant Biotechnology Lab Exercises References 5: The Time/Cost Trade-off Problems 5.1 Problem Definition 5.2 Time/Cost Trade-Off in Projects 5.2.1 Project Crashing 5.2.2 An Algorithm for Project Crashing 5.2.2.1 Determining the Minimum Total Project Cost 5.2.2.2 Generalized Precedence Relationships 5.3 Continuous Time/Cost Trade-off Problems 5.3.1 Activity-on-Arc Representation 5.3.2 Activity-on-Node Representation 5.3.2.1 Model Solution 5.4 Discrete Time-Cost Trade-off Problems 5.4.1 The Deadline Problem 5.4.2 The Budget Problem 5.5 Conclusions, Recent Developments, and Some Future Research Directions Exercises References 6: Stochastic Project Scheduling with No Resource Constraints 6.1 Introduction 6.2 Representation of the Randomness of Activity Durations 6.3 Determining the Critical Path 6.4 Shortcomings of the PERT Method 6.5 A Model for Managing Uncertainty in Activity Costs 6.6 Monte Carlo Simulation Approach to Handle Uncertainty 6.7 Conclusions, Recent Developments, and Some Future Research Directions 6.8 Case Study: Constructing an Earthquake Resistant Residential House Exercises Appendix 6A: Area Under the Normal Curve References 7: Resource Constrained Project Scheduling 7.1 Introduction 7.1.1 Categories of Resources 7.1.2 Resource Parameters 7.2 Objective Functions 7.2.1 Regular and Non-regular Objective Functions 7.2.2 Time-Based Objectives 7.2.2.1 The Case of Multiple Projects 7.2.3 Financial Objectives 7.2.4 Quality Based Objectives 7.2.5 Resource Based Objectives 7.3 A Mathematical Programming Formulation of the Resource Constrained Project Scheduling Problem 7.4 Exact Solution Procedures Using Branch and Bound 7.5 Heuristic Solution Procedures 7.5.1 Types of Schedules 7.5.2 Priority Rules 7.5.2.1 A Representative List of Priority Rules 7.5.3 Serial Schedule Generation 7.5.4 Parallel Schedule Generation Scheme 7.5.5 A Brief Assessment of Serial and Parallel Schedule Generation Schemes 7.6 A Mathematical Programming Formulation with Multiple Modes 7.7 A Mathematical Programming Formulation for Maximizing the Net Present Value of a Project Under No Budgetary Constraint 7.8 Conclusions, Recent Developments, and Some Future Research Directions Exercises Appendixes Appendix 7A: Computational Complexity Appendix 7B: Branch and Bound References 8: Resource Leveling and Other Resource Management Problems 8.1 Introduction 8.2 Resource Leveling 8.2.1 The Burgess and Killebrew Algorithm 8.2.2 Other Solution Approaches 8.2.3 The Total Adjustment Cost Problem 8.3 Resource Availability Cost Problem 8.4 Resource Management Policies 8.5 The Resource Portfolio Management Problem 8.6 Conclusions, Recent Developments, and Some Future Research Directions 8.7 Case Study: Conducting Annual Audit for Celik Company Exercises References 9: Project Contract Types and Payment Schedules 9.1 Introduction 9.2 Contract Types 9.2.1 Fixed Price Contracts 9.2.2 Variable Price Contracts 9.2.3 Cost of Managing Contracts 9.3 Payment Scheduling Models 9.4 Change and Control Issues in Contracts 9.4.1 Managing Change Issues in Contracts 9.4.2 Control Issues in Contracts 9.5 Identification and Allocation of Risk in Contracts 9.6 Bidding 9.6.1 Estimating the Total Cost of the Project 9.6.2 Front-loaded Bidding Strategy 9.6.3 A Bidding Model for Determining the Bidding Price 9.7 Mathematical Models for Negotiation in Project Management 9.7.1 Preparation for a Bid 9.7.2 Client-Contractor Bargaining Problem 9.7.3 Equitable Payment Schedule Problem 9.8 Conclusions, Recent Developments, and Some Future Research Directions Exercises References 10: Progress and Cost Control 10.1 Introduction 10.2 Cost/Schedule Control System Measures 10.3 Estimating the Percent Complete 10.4 Cost/Schedule Control Performance Indicators 10.4.1 The Impact of Inflation 10.5 Time and Cost Predictions Using EVM 10.6 Limitations of Earned Value Management 10.7 Conclusions, Recent Developments, and Some Future Research Directions Exercises References 11: Project Risk Management 11.1 Introduction 11.2 Processes in Project Risk Management 11.2.1 Risk Identification 11.2.2 Risk Analysis 11.2.2.1 Qualitative Methods 11.2.2.2 Quantitative Methods 11.2.3 Risk Response Planning 11.2.4 Risk Monitoring and Control 11.3 Project Risk Analysis: A Team Discussion Case 11.4 Conclusions, Recent Developments, and Some Future Research Directions Exercises References 12: Project Scheduling Under Uncertainty 12.1 Introduction 12.2 Robust Scheduling 12.2.1 Critical Chain Project Management 12.2.2 A Robust Optimization Model for Project Scheduling 12.2.3 Robustness Measures and Project Scheduling 12.3 Stochastic Scheduling 12.4 Sensitivity, Scenario, and Simulation Analysis 12.4.1 Sensitivity Analysis 12.4.2 Scenario Analysis 12.4.3 Monte Carlo Simulation 12.5 Conclusions, Recent Developments, and Some Future Research Directions Exercises References 13: Planning and Scheduling of Repetitive Projects 13.1 Introduction 13.1.1 An Analogy to Serial Production Lines 13.1.2 Duration - Resource Relation for WPs 13.2 A Mathematical Programming Model for the Repetitive Projects 13.2.1 The Objective Function 13.2.2 The Constraints 13.2.3 The Mathematical Programming Model 13.3 A Model with an Alternative Total Cost Function 13.4 Conclusions, Recent Developments, and Some Future Research Directions 13.5 Case Study: 50 Km Gebze-Orhangazi Section of Gebze-Izmir Motorway Project Exercises References 14: Project and Portfolio Selection 14.1 Introduction 14.2 A Multi-criteria Scoring Model 14.3 The Analytic Hierarchy Process 14.3.1 Sensitivity Analysis 14.4 Mathematical Programming Models 14.4.1 A Single Objective Mathematical Programming Model 14.4.2 Multi-objective Mathematical Programming Models 14.4.3 Multi-objective Linear Programming Approach 14.4.4 Goal Programming Model 14.4.5 Multi-objective, Multi-period Project Portfolio Selection and Scheduling Model 14.5 Conclusions, Recent Developments, and Some Future Research Directions 14.6 Case Study: Project Portfolio Selection for the Construction of a Series of Dams Exercises References 15: Recent Developments and Some Promising Research Areas 15.1 Sustainability and Project Management 15.2 Project Management in the Era of Big Data 15.2.1 Meaning and Techniques of Big Data Analytics 15.2.2 Application Areas and Opportunities in Project Management 15.3 Fourth Industrial Revolution and the New Age Project Management 15.3.1 Evolution of the Project Environments 15.3.2 Transformation of the Project Management Practices References References for Section Sustainability and Project Management References for Section Project Management in the Era of Big Data References for Section Fourth Industrial Revolution and the New Age Project Management Abbreviations Mathematical Notations Index