Project Management Processes, Methodologies, and Economics

by ; ;
Edition: 2nd
Format: Paperback
Pub. Date: 2004-10-20
Publisher(s): Pearson
List Price: $203.39

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Summary

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 Biography

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.

 

Table of Contents

Nomenclature xv
Preface xvii
About the Authors xx
Introduction
1(44)
Nature of Project Management
1(1)
Relationship Between Projects and Other Production Systems
2(2)
Characteristics of Projects
4(10)
Definitions and Issues
5(2)
Risk and Uncertainty
7(1)
Phases of a Project
8(2)
Organizing for a Project
10(4)
Project Manager
14(3)
Basic Functions
14(1)
Characteristics of Effective Project Managers
15(2)
Components, Concepts, and Terminology
17(7)
Movement to Project-Based Work
24(1)
Life Cycle of a Project: Strategic and Tactical Issues
25(3)
Factors that Affect the Success of a Project
28(2)
About the Book: Purpose and Structure
30(11)
Team Project
34(3)
Discussion Questions
37(1)
Exercises
38(2)
Bibliography
40(1)
Engineering Versus Management
41(4)
Nature of Management
41(1)
Differences between Engineering and Management
42(1)
Transition from Engineer to Manager
43(1)
References
44(1)
Process Approach to Project Management
45(30)
Introduction
45(6)
Life-Cycle Models
46(3)
Example of a Project Life Cycle
49(1)
Application of the Waterfall Model for Software Development
49(2)
Project Management Processes
51(1)
Process Design
51(1)
PMBOK and Processes in the Project Life Cycle
52(1)
Project Integration Management
52(4)
Accompanying Processes
52(1)
Description
53(3)
Project Scope Management
56(2)
Accompanying Processes
56(1)
Description
57(1)
Project Time Management
58(2)
Accompanying Processes
58(1)
Description
59(1)
Project Cost Management
60(1)
Accompanying Processes
60(1)
Description
60(1)
Project Quality Management
61(1)
Accompanying Processes
61(1)
Description
62(1)
Project Human Resource Management
62(1)
Accompanying Processes
62(1)
Description
63(1)
Project Communications Management
63(2)
Accompanying Processes
63(1)
Description
64(1)
Project Risk Management
65(2)
Accompanying Processes
65(1)
Description
66(1)
Project Procurement Management
67(3)
Accompanying Processes
67(1)
Description
68(2)
The Learning Organization and Continuous Improvement
70(2)
Individual and Organizational Learning
70(1)
Workflow and Process Design as the Basis of Learning
71(1)
Organizational Project Management Maturity Model
72(3)
Team Project
72(1)
Discussion Questions
73(1)
Exercises
73(1)
Bibliography
74(1)
Engineering Economic Analysis
75(72)
Introduction
75(3)
Need for Economic Analysis
76(1)
Time Value of Money
77(1)
Discount Rate, Interest Rate, and Minimum Acceptable Rate of Return
77(1)
Compound Interest Formulas
78(9)
Present Worth, Future Worth, Uniform Series, and Gradient Series
80(3)
Nominal and Effective Interest Rates
83(1)
Inflation
84(3)
Treatment of Risk
87(1)
Comparison of Alternatives
87(4)
Defining Investment Alternatives
88(2)
Steps in the Analysis
90(1)
Equivalent Worth Methods
91(14)
Present Worth Method
91(1)
Annual Worth Method
92(2)
Future Worth Method
94(1)
Discussion of Present Worth, Annual Worth, and Future Worth Methods
95(2)
Internal Rate of Return Method
97(6)
Payback Period Method
103(2)
Sensitivity and Breakeven Analysis
105(3)
Effect of Tax and Depreciation on Investment Decisions
108(11)
Capital Expansion Decision
110(2)
Replacement Decision
112(5)
Make-or-Buy Decision
117(1)
Lease-or-Buy Decision
118(1)
Utility Theory
119(28)
Expected Utility Maximization
120(2)
Bernoulli's Principle
122(1)
Constructing the Utility Function
123(4)
Evaluating Alternatives
127(2)
Characteristics of the Utility Function
129(2)
Team Project
131(4)
Discussion Questions
135(1)
Exercises
136(10)
Bibliography
146(1)
Life-Cycle Costing
147(26)
Need for Life-Cycle Cost Analysis
147(3)
Uncertainties in Life-Cycle Cost Models
150(3)
Classification of Cost Components
153(7)
Developing the LCC Model
160(7)
Using the Life-Cycle Cost Model
167(6)
Team Project
168(1)
Discussion Questions
168(1)
Exercises
169(2)
Bibliography
171(2)
Project Screening and Selection
173(60)
Components of the Evaluation Process
173(2)
Dynamics of Project Selection
175(2)
Checklists and Scoring Models
177(3)
Benefit-Cost Analysis
180(8)
Step-by-Step Approach
185(1)
Using the Methodology
185(1)
Classes of Benefits and Costs
186(1)
Shortcomings of the Benefit-Cost Methodology
187(1)
Cost-Effectiveness Analysis
188(3)
Issues Related to Risk
191(12)
Accepting and Managing Risk
194(1)
Coping with Uncertainty
194(1)
Nonprobabilistic Evaluation Methods When Uncertainty Is Present
195(5)
Risk-Benefit Analysis
200(3)
Limits of Risk Analysis
203(1)
Decision Trees
203(13)
Decision Tree Steps
210(1)
Basic Principles of Diagramming
211(1)
Use of Statistics to Determine the Value of More Information
212(2)
Discussion and Assessment
214(2)
Real Options
216(15)
Drivers of Value
216(1)
Relationship to R&D Projects
217(1)
Team Project
218(2)
Discussion Questions
220(1)
Exercises
221(8)
References
229(2)
Bayes' Theorem for Discrete Outcomes
231(2)
Multiple Criteria Methods for Evaluation
233(46)
Introduction
233(1)
Framework for Evaluation and Selection
233(3)
Objectives and Attributes
234(2)
Aggregating Objectives into a Value Model
236(1)
Multiattribute Utility Theory
236(6)
Analytic Hierarchy Process
242(8)
Determining Local Priorities
243(4)
Checking for Consistency
247(1)
Determining Global Priorities
248(2)
Group Decision Making
250(11)
Group Composition
250(1)
Running the Decision Making Session
251(1)
Implementing the Results
252(1)
Group Decision Support Systems
252(2)
Team Project
254(1)
Discussion Questions
254(1)
Exercises
255(3)
Bibliography
258(3)
Comparison of Multiattribute Utility Theory with the Analytic Hierarchy Process: Case Study
261(18)
Introduction and Background
262(1)
The Cargo-Handling Problem
262(1)
System Objectives
262(1)
Possibility of Commercial Procurement
263(1)
Alternative Approaches
263(1)
Analytic Hierarchy Process
264(2)
Definition of Attributes
266(2)
Analytic Hierarchy Process Computations
268(1)
Data Collection and Results for AHP
269(1)
Discussion of the Analytic Hierarchy Process and Results
270(3)
Multiattribute Utility Theory
273(1)
Data Collection and Results for Multiattribute Utility Theory
273(2)
Discussion of the Multiattribute Theory and Results
275(2)
Additional Observations
277(1)
Conclusions for the Case Study
277(1)
References
278(1)
Scope and Organizational Structure of a Project
279(50)
Introduction
279(1)
Organizational Structures
280(9)
Functional Organization
281(2)
Project Organization
283(1)
Product Organization
284(1)
Customer Organization
284(1)
Territorial Organization
285(1)
The Matrix Organization
285(3)
Criteria for Selecting an Organizational Structure
288(1)
Organizational Breakdown Structure of Projects
289(9)
Factors in Selecting a Structure
290(1)
The Project Manager
291(4)
Project Office
295(3)
Project Scope
298(10)
Work Breakdown Structure
299(7)
Work Package Design
306(2)
Combining the Organizational and Work Breakdown Structures
308(3)
Linear Responsibility Chart
309(2)
Management of Human Resources
311(18)
Developing and Managing the Team
311(4)
Encouraging Creativity and Innovation
315(2)
Leadership, Authority, and Responsibility
317(3)
Ethical and Legal Aspects of Project Management
320(3)
Team Project
323(1)
Discussion Questions
324(1)
Exercises
324(2)
Bibliography
326(3)
Management of Product, Process, and Support Design
329(48)
Design of Products, Services, and Systems
329(4)
Principles of Good Design
330(2)
Management of Technology and Design in Projects
332(1)
Role of the Project Manager
333(1)
Importance of Time and the Use of Teams
334(10)
Concurrent Engineering and Time-Based Competition
335(3)
Time Management
338(3)
Guideposts for Success
341(1)
Industrial Experience
342(1)
Unresolved Issues
343(1)
Supporting Tools
344(16)
Quality Function Deployment
344(3)
Configuration Selection
347(3)
Configuration Management
350(5)
Risk Management
355(5)
Quality Management
360(17)
Philosophy and Methods
360(6)
Importance of Quality in Design
366(1)
Quality Planning
367(1)
Quality Assurance
367(2)
Quality Control
369(1)
Cost of Quality
369(2)
Team Project
371(1)
Discussion Questions
372(1)
Exercises
373(1)
Bibliography
373(4)
Project Scheduling
377(80)
Introduction
377(6)
Key Milestones
380(1)
Network Techniques
381(2)
Estimating the Duration of Project Activities
383(10)
Stochastic Approach
384(3)
Deterministic Approach
387(1)
Modular Technique
388(1)
Benchmark Job Technique
388(1)
Parametric Technique
388(5)
Effect of Learning
393(2)
Precedence Relations Among Activities
395(2)
Gantt Chart
397(4)
Activity-on-Arrow Network Approach for Critical Path Method Analysis
401(12)
Calculating Event Times and Critical Path
409(2)
Calculating Activity Start and Finish Times
411(1)
Calculating Slacks
412(1)
Activity-on-Node Network Approach for Critical Path Method Analysis
413(3)
Calculating Early Start and Early Finish Times of Activities
414(1)
Calculating Late Start and Finish Times of Activities
415(1)
Precedence Diagramming with Lead--Lag Relationships
416(6)
Linear Programming Approach for Critical Path Method Analysis
422(2)
Aggregating Activities in the Network
424(1)
Hammock Activities
424(1)
Milestones
425(1)
Dealing with Uncertainty
425(9)
Simulation Approach
425(3)
PERT and Extensions
428(6)
Critique of PERT and CPM Assumptions
434(2)
Critical Chain Process
436(1)
Scheduling Conflicts
437(13)
Team Project
438(1)
Discussion Questions
439(1)
Exercises
440(7)
Bibliography
447(3)
Least-Squares Regression Analysis
450(2)
Learning Curve Tables
452(3)
Normal Distribution Function
455(2)
Resource Management
457(30)
Effect of Resources on Project Planning
457(1)
Classification of Resources Used in Projects
458(3)
Resource Leveling Subject to Project Due-Date Constraints
461(4)
Resource Allocation Subject to Resource Availability Constraints
465(4)
Priority Rules for Resource Allocation
469(3)
Critical Chain: Project Management by Constraints
472(1)
Mathematical Models for Resource Allocation
472(3)
Projects Performed in Parallel
475(9)
Team Project
476(1)
Discussion Questions
476(1)
Exercises
477(5)
Bibliography
482(2)
Estimating Peak Resource Requirements
484(3)
Project Budget
487(30)
Introduction
487(2)
Project Budget and Organizational Goals
489(2)
Preparing the Budget
491(3)
Top-Down Budgeting
492(1)
Bottom-up Budgeting
492(2)
Iterative Budgeting
494(1)
Techniques for Managing the Budget
494(11)
Slack Management
494(4)
Crashing
498(7)
PERT/Cost
505(1)
Presenting the Budget
505(2)
Project Execution: Consuming the Budget
507(1)
Important Points in the Budgeting Process
508(9)
Team Project
509(1)
Discussion Questions
509(1)
Exercises
510(5)
Bibliography
515(2)
Project Control
517(44)
Introduction
517(3)
Common Forms of Project Control
520(3)
Integrating the OBS and WBS with Cost and Schedule Control
523(14)
Hierarchical Structures
524(4)
Earned Value Approach
528(9)
Reporting Progress
537(1)
Updating Cost and Schedule Estimates
538(3)
Technological Control: Quality and Configuration
541(1)
Line of Balance
541(5)
Overhead Control
546(8)
Team Project
549(1)
Discussion Questions
549(1)
Exercises
550(2)
Bibliography
552(2)
Example of a Work Breakdown Structure
554(2)
Department of Energy Cost/Schedule Control Systems Criteria
556(5)
Research and Development Projects
561(40)
Introduction
561(2)
Risk Factors
563(4)
Technical Success Versus Commercial Success
563(1)
Changing Expectations
564(1)
Technology Leapfrogging
564(1)
Standards
565(1)
Cost and Time Overruns
566(1)
Lack of Infrastructure
567(1)
Managing Technology
567(5)
Classification of Technologies
569(1)
Exploiting Mature Technologies
570(1)
Relationship between Technology and Projects
571(1)
Strategic R&D Planning
572(4)
Role of R&D Manager
572(1)
Planning Team
573(3)
Parallel Funding: Dealing with Uncertainty
576(4)
Categorizing Strategies
576(2)
Analytic Framework
578(1)
Q-GERT
578(2)
Managing the R&D Portfolio
580(15)
Evaluating an Ongoing Project
582(3)
Analytic Methodology
585(5)
Team Project
590(1)
Discussion Questions
590(1)
Exercises
591(1)
Bibliography
592(3)
Portfolio Management Case Study
595(6)
Computer Support for Project Management
601(44)
Introduction
601(1)
Use of Computers in Project Management
602(15)
Supporting the Project Management Process Approach
603(1)
Tools and Techniques for Project Management
603(14)
Criteria for Software Selection
617(5)
Software Selection Process
622(6)
Software Implementation
628(2)
Project Management Software Vendors
630(4)
Team Project
630(1)
Discussion Questions
630(1)
Exercises
631(1)
Bibliography
632(2)
PMI Software Evaluation Checklist
634(11)
Category 1: Suites
634(1)
Category 2: Process Management
634(1)
Category 3: Schedule Management
635(1)
Category 4: Cost Management
635(1)
Category 5: Resource Management
635(1)
Category 6: Communications Management
635(1)
Category 7: Risk Management
636(1)
General (Common) Criteria
636(1)
(Category-Specific Criteria) Category 1: Suites
637(1)
Category 2: Process Management
637(1)
Category 3: Schedule Management
638(1)
Category 4: Cost Management
639(1)
Category 5: Resource Management
640(1)
Category 6: Communications Management
640(2)
Category 7: Risk Management
642(3)
Project Termination
645(16)
Introduction
645(1)
When to Terminate a Project
646(4)
Planning for Project Termination
650(5)
Implementing Project Termination
655(1)
Final Report
655(6)
Team Project
656(1)
Discussion Questions
657(1)
Exercises
657(1)
Bibliography
658(3)
Index 661

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